Finextra Research: Latest fintech news, analysis, interviews, features and opinion by industry experts

Report

Five Business Benefits for Analysing and Combatting Fraud

A Finextra Research Impact Study in association with Aerospike. With increased financing options at point-of-sale, card-not-present transactions, and contactless payments, comes a resultant surge in fraudulent transactions and financial crime. This increase in digital fraud has been catalysed by the recent Covid-19 pandemic-induced shift to online banking and commerce. Now more than ever, financial institutions must implement payments authentication processes to prevent the long-term risks associated with fraud, including slimming margins and reputational damage. One way financial players can stay ahead is to analyse all available historical and real-time data, and apply artificial intelligence (AI) and machine learning (ML) tools – which encompass a range of algorithmic approaches that derive from statistical methods such as regressions and neural networks – to decipher legitimate transactions from the illegitimate. There are, however, five further business benefits to understanding customer risk profiles. Actionable insights derived from fraud profile analysis can help banks visualise each customer, not as a collection of disassociated data points, but as a mosaic, made up of different characteristics that merge to provide a comprehensive view. This can lead to complex, holistic, and predictive analysis of customers’ behaviour – generating consistent and tailored services. Download your copy of the paper below to learn more.

20 May 2021 218 downloads

Report

Payments Modernisation: The Cloud Imperative

This survey, conducted in early 2021, was global in scope and based on a sample of 150 banks and payment service providers. It was aimed to quantify trends in payments modernisation, cloud and ‘as-a-service’ delivery models for account-to-account payments (corporate and retail/consumer payments). We were also interested in gauging the impact of the COVID-19 pandemic on financial institutions’ own operations, and on the needs and expectations of their customers, and the adoption rate of various domestic and cross-border payment networks. The movement of money can be a complicated business. Payments modernisation has always been an imperative for banks since the inception of the modern banking system – from the introduction of cheques to the telegraphic transfer by radio or cable through to the networks of today. The trend is always towards greater speed, security and interoperability – but with that, complexity. The proliferation of payment networks covering various models for moving money domestically and internationally means financial organisations have to deal with many gateways, messaging standards, processing and settlement rules and regulations. This proliferation has led to much fragmentation and duplication of payment systems within organisations. It has also limited reachability and interoperability. Delivering on these requirements can involve system replacement, but just as often the challenge is to work around and integrate legacy systems that can’t easily be replaced, and bring them into a more modern architecture. Download your copy of this Finextra Survey Report, produced in association with Volante Technologies, to learn more.

18 May 2021 573 downloads

Report

The Cloud-native journey - Why Hybrid Cloud and Open Source go hand-in-hand

The financial services industry has been turning to cloud services and technology in droves to accommodate the pressures, security demands and cost savings of digital transformation projects, as well as regulatory compliance priorities. To become and remain agile, financial organisations must move beyond legacy practices, particularly when the speed of change in the industry is at such an all-time high and accelerating. Variants in cloud technology have quickly emerged leaving financial services organisations with choices far beyond mere public cloud solutions. Security and availability demands have led many institutions to continue to rely on private cloud deployments- those within the organisation’s security perimeter or firewall. While at the same time, managed cloud services and Software-as-a-Service options have increased the number of public clouds organisations are using. Other factors such as regulatory requirements mean financial services firms need to not only keep certain data within a certain geographical location but also should review the risk associated with relying on only a single cloud provider. Compounding the regulatory challenges, the advancements and innovations around 5G and IoT are leading to new levels of edge computing, with corresponding cloud requirements. As a result of this proliferation and the arising complexity from multiple clouds, as well as the need to have enterprise-wide management thereof, banks and FIs have needed to move away from a single cloud strategy and utilise a hybrid cloud and platform approach and a cloud-native mindset. From a business, security, risk and operational standpoint, the stakes have simply become too high not to be hybrid. Download your copy of this Finextra white paper, produced in association with Red Hat, to learn more.

19 April 2021 321 downloads

Report

Sustainable Finance Live - Reimagining Risk Modelling ESG Solutions

A Visual Record from the Sustainable Finance Live workshops 8-9 December 2020. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event focused on real-time forward-looking measurement of climate change and nature loss to address transitional and physical risk, following a lean back, lean in and learn by doing model. The workshop detailed how alternative data from sources such as satellites and sensors can augment traditional risk systems and provide insights for the future of sustainable financing. Diving deep into the practical challenges of risk management, the sessions considered using alternative data to inform credit decisions, with speakers providing advice on how to embrace sustainable finance. The interactive forum welcomed a set of cross-functional skills from individuals spanning the technology, business and finance sectors. Initially taking a generalised approach to understand reporting across ESG finance sectors, it became apparent that specific use cases were needed. Richard Peers, founder of ResponsibleRisk and contributing editor for Finextra Research, outlined the key questions for the event: What are the issues and opportunities for risk management working with alternative data to inform credit decisions? How can these decisions be quantified against physical and transition risk? With a top-down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: Using alternative data to inform physical and transition risk How satellite and sensor data can provide insights for investment and governance professionals Plotting the steps to resolution of existing problems and mainstream use of data Identifying how to prevent lack of proper pricing of ESG risk Download the full report below to find out more.

16 April 2021 71 downloads

Report

Adapting to a shifting Cards Landscape

Identifying opportunities for Issuers. The payment cards industry has changed dramatically in recent years, with new technologies and regulations spurring innovation and lowering the barriers to entry for issuers. Meanwhile, there has been a shift to digital payments, which has created opportunities for bank and non-bank issuers alike. Card payment volumes have been growing, and the world’s standout region is Asia Pacific. China is the star performer, and the number of cards in issue is staggering. And while digital wallets such as Alipay and WeChat Pay have pushed the growth of mobile payments in China, cards have a key role to play. Similarly, in Africa, where mobile money services like mPesa have been hugely popular, there is still a role for payment cards in the rapidly developing markets. Cards are also in demand in other regions. In Europe, the most recent figures from the European Central Bank show an increase in the number of payment cards issued. So far, there has been a reported shift to digital payments in various markets, such as the Middle East, and even the least internet-savvy consumers have changed their spending habits and are now shopping online. In the physical world, contactless - both on smartphones and cards - has been successful in providing convenience for cardholders in stores. Additional innovations have attempted to make it even easier for customers to tap and go. Card programmes have become increasingly cost-effective, especially for issuers who are unencumbered by legacy systems. With on-demand digital printing, for example, cards can be personalised and issuers can order a smaller print run for smaller customer segments as they are needed – such as fans of a football club – rather than committing to a large batch upfront. Download your copy of this Finextra white paper, produced in association with FIS, to learn more.

14 April 2021 626 downloads

Report

The Future of Cloud 2021

Evolving the Financial Services Industry. As consumers have come to expect the same experience of their financial services providers that they have elsewhere in their lives, traditional financial institutions (FIs) are increasingly looking for ways to improve customer service and deepen engagement. For many, optimising the digital experience for customers is a priority. From leveraging omni-channel communication strategies to creating more personalised experiences, the goal is to deliver the right message, at the right time, in the right channel. Fintech firms have been faster to innovate. Many, in fact, were created to address consumer dissatisfaction with traditional financial services providers. However, many players across the banking, payments and capital markets industries such as Barclays, Broadridge, Capgemini, Calypso, Collibra, DBS, FICO, Fraud.net, Global Payments, HSBC, IHS Markit, Kx, Mambu, Nasdaq, Numerix, OakNorth, Singapore Exchange, Solarisbank, Standard Chartered and Trading Technologies are increasingly turning to the cloud as a way to accelerate their digital transformation for customers. Shifting away from legacy infrastructure reduces time and resource constraints and financial institutions can innovate and respond to customer needs with the cloud. Banks, payments services providers, and capital markets firms must take advantage of the cloud’s greater elasticity, flexibility and cost-effectiveness. Download your copy of the report below to learn more. Part of the Finextra Cloud Series, in association with Amazon Web Services (AWS).

26 March 2021 850 downloads

Report

Cut through the noise: 5 key considerations when selecting your payments platform

A Finextra Research Impact Study in Association with Compass Plus. Identifying and working alongside technology vendors has never been higher on the agenda. A 2020 Lloyds Bank survey found that 88% of senior leaders within financial institutions say that tech investment will be a top strategic priority for the next 12 months, and that 62% plan to increase investment in technology and core systems. Organisations across the payments industry are facing unparalleled pressure to digitally evolve. For incumbents this is a result of everchanging customer expectations and demand for digital. These factors cause financial institutions (FIs) to look to the crowded market of technology vendors to help future-proof their business. Vendors trying to differentiate themselves in this crowded market often use convoluted tech-spin to try and attract new clients. This can make it difficult for FIs to identify which vendor, platform or service is best suited to their needs and may end up being led in the wrong direction. While FIs are facing immense pressure to evolve quickly, selecting the right vendor is a process which should not be rushed into. Financial institutions must be cautious when considering potential technology vendors by cutting through marketing vernacular to build a clear understanding of the platform’s capabilities. This impact study sets out the key considerations FIs must make to effectively deploy their strategy. From avoiding outdated assumptions, outlining clear objectives, steering clear of industry buzzwords, to asking the right questions, these fundamental tools will only assist financial organisations in their journey to enhance or transform their digital offering. Download your copy of the paper below to learn more.

09 March 2021 489 downloads

Report

Solving onboarding - The catalyst in creating a unique end-to-end client relationship

Financial services firms are on a digital journey across the globe, and some parts of this journey have been more seamless than others. Firms are increasingly aware that streamlined, pain-free onboarding builds the foundation for a successful client experience throughout the duration of a client’s lifecycle. Primarily, a digital experience adds convenience and competitive service for the client. Despite ranking highly on the agenda for all financial institutions, not all firms have been able to achieve a fully digital onboarding process. A ‘userfriendly and frictionless’ onboarding experience may be the ideal, but it means overcoming great technological, infrastructural, cultural, regulatory and commercial hurdles to achieve it. This research report by Finextra, in association with Box, is based on several leading industry voices on the subject to explore the current status of onboarding digitisation journeys. Experts share their insight on the current status of onboarding projects and why the need to evolve is more important than ever. The paper explores how onboarding pain points are increasingly frustrating digitally-native clients, the role that data and information management play in meeting smooth onboarding goals, and efforts being made towards what the industry describes as onboarding nirvana, based on a 360-degree view of the client. Download your copy of the Finextra industry sentiment report to learn more.

27 January 2021 766 downloads

Report

What will drive the journey towards cashlessness and digitalisation?

Market dynamics and infrastructure vary greatly per country and region but the direction of innovation and change are converging on the same outcome: digitisation and cashlessness. As the world adopts digitalisation in all sectors and societies, there is greater demand for unbanked communities to be banked and for digital banking to enable better choice and control for consumers, greater opportunities for merchants and businesses, increased cross-border trade and benefits for governments. The reasons for the transition away from cash and towards digital include enabling connections between unbanked consumers, merchants and services through mobile money; greater visibility and view on liquidity for merchants, including real time confirmation and settlement; reduction in fraud and crime by implementing a digital trace and, hence, audit system; financial inclusion; for banks, greater volumes and transactions are welcomed also. System integration and standardisation are the crucial factors on this journey to grow the ecosystem and the key tenets of interoperability and ubiquity, each of which drives the other, are becoming the focus for any serious mobile money or digital financial provider. QR codes have been instrumental across the Middle East, Africa and Asia to facilitate mobile and digital payment services and they could provide a gateway to unified and integrated financial offerings, countrywide, regionwide and even worldwide. As digital payments become pervasive, API infrastructures are providing the basis for interoperable systems, but these can be supported also by third party aggregators or, often in developed markets, switch technology. The expansion of API infrastructure and the proliferated services it enables depends on standardised and harmonised interaction and integration, as well as collaboration between private and public firms. Download your copy of this Finextra white paper, produced in association with HPS, to learn more.

18 January 2021 657 downloads

Report

Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies

A Finextra Research Impact Study in Association with Global Payments and Amazon Web Services (AWS). Consumer expectations, behaviour and payment preferences are and will continue to evolve at an accelerated rate. As a result, payments processors and issuing banks must ensure they are technology-enabled and software-driven so that the financial products and services they provide are future-proofed, ready for today and tomorrow. In an attempt to keep pace with competitors, banks must recognise that collaboration between payment players and cloud service providers will help drive frictionless, more secure digital experiences for consumers. This is of paramount importance in a world where resilient commerce through contactless interactions – at scale – is key. However, some institutions are still offering traditional premise-bound services and aren’t taking advantage of the innovative technologies available in market today. In order to remain relevant, these organisations must be flexible, accelerate speed to market and provide best-in-class experiences for their customers. According to a McKinsey survey, banks that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversation rates and growth by 20%. From extending their footprint into new products, services and markets, to innovating and creating next generation, digital focused banking solutions, the goal for financial institutions is to meet the demands of the connected, digital world and keep pace with ever-changing consumers’ preferences. Against a backdrop of new payments startups, legacy players don’t have the benefit of starting from scratch but do have the advantage of a large customer base. While cloud technology can support digital transformation, financial institutions, retailers and new market entrants will also realise the benefits of a collaboration between the likes of Global Payments and AWS and how it will lead to more secure, reliable and innovative solutions for the payments industry at scale. Download your copy of the Impact Study below to learn more.

07 January 2021 559 downloads

Report

Liquidity and Beyond: Building a future through certainty

Creating a strategic advantage. There is an evolving approach to liquidity management: from merely monitoring, to actively managing and optimising, to using liquidity for a strategic advantage. Achieving this requires the right tools and technology, and also an open mind about the opportunities that effective real time liquidity management can bring. Seconds, minutes or hours – whatever the definition of ‘real time’ in real time liquidity management, its speed is definitely increasing. Banks and corporates are operating in an increasingly dynamic environment: consumers want services on-demand; payments are faster; information travels at warp speed, news is rolling 24/7; and crises can unfold in an instant. This always-on environment has an impact on liquidity, which has to be managed effectively to ensure an organisation can meet its obligations; in times of stress, it can be critical for its survival. Having the right information at their fingertips – in real time – gives bank and corporate treasurers accuracy and assurance in navigating this changing environment. And if liquidity management is done well, they will do more than keep pace with their environment – they will use it to their advantage. The right analysis of information in real time brings better understanding of their customer, their business, the potential to reduce costs and hence, greater potential for planning and growth based on new levels of certainty. The possibilities and potential that the business concept of real time can bring, in conjunction with up-to-the-minute use of advanced technology, is staggering. Businesses and banks were not built to operate in a 24/7 environment, and it is no mean feat to step up to the plate to meet this challenge and turn it into potential. Real time automatic payments, settlement, account updates, exception handling and data sharing can eliminate the need for cash buffers- idle cash becomes investment. Real time can bolster banks’ credit ratings; real time analysis predicts behaviours leading to reduced risk; real time can provide instant forecasting adjustments- further finetuning an organisation’s position. It feeds a 360 view on a client, fostering better relationships, and with agile systems, enables a firm to plan and grow with a certainty hitherto never seen. Now is the time for banks and corporates to act, redefining their business goals, and crucially, their technology requirements. Download your copy of this Finextra white paper, produced in association with Montran, to learn more. Read the associated Industry Spotlight here - Real Time Intraday Liquidity Management.

17 December 2020 426 downloads

Report

Automation, Resiliency and Agility: Key Drivers of Cloud Adoption and Strategy

A Finextra Research Impact Study in Association with Calypso Technology and Amazon Web Services (AWS). Cloud adoption for financial services firms has been on the rise over the past few years - a trend that has been further bolstered by the wave of digitisation brought on by the global pandemic. A survey of financial services firms’ cloud attitudes conducted by bobsguide in 2020 revealed that nearly 83% of participants were already working on the cloud, with 50% expanding their use and the rest of the respondents having already completed their cloud migration. Financial institutions in the global capital markets space are facing unprecedented regulatory scrutiny, IT rationalisation, and cost pressures while still having to deliver value to their clients, which has shifted the spotlight on cloud from innovative or experimental initiatives to mission-critical workloads that can be made leaner and less expensive to maintain. While cloud has become a common mode of delivery for innovative capital markets firms, recent financial pressure, global macro-economic uncertainty and the need to respond to regulatory change has led to cloud adoption and migration being integrated and considered a crucial part of a financial institution’s business strategy in optimising mission-critical workloads with cloud technology. In this impact study, we discuss the key drivers of cloud adoption, as well as strategies that ensure successful outcomes for customers who want to make the move to cloud. Download your copy of the Impact Study below to learn more.

11 December 2020 390 downloads

Report

Paving the path from Open Banking to Open Finance in Benelux

Open banking has set the pace for differentiation of the financial services ecosystem, invited new players into the mix, challenged traditional meanings of data, value, personal information and the dynamics of ownership, and blurred the hitherto service sectors of society. This has resulted in greater competition and a proliferation of new services and offerings in payment and aggregation, blending activities across verticals and industries, and creating new ways of interacting. The end user is undoubtedly the winner here but there are nuances still to be played out in terms of the perception of value attributed to personal data, ownership of the customer relationship, and the way in which services will shape the way people live their lives and vice versa. Open banking is en route to open finance and beyond to open data, and in this burgeoning economy where new players, partnerships, aggregated services, platforms, apps and ecosystems are sprouting up, merging and shape-shifting at breakneck speed, it could not be more important to ensure at every turn the resilience, safety and security of each system. The Benelux region, at the heart of Europe and straddling the very seat of European financial regulation, is well positioned as a microcosm of how the new economy is unfolding. This research paper from Finextra, in association with Equinix, is based on several interviews with experts in the open banking space and in Benelux who shared their views and insights on the current response to open banking and the future of open finance and open data. Download your copy of this Finextra white paper, produced in association with Equinix, to learn more.

27 November 2020 465 downloads

Report

Securing the API Ecosystem

New and different banking models are emerging as the various influences in financial services today take hold. Change happens at a faster pace than ever, increasing in rate by the year, and this is very much part of the new operating norm. Regardless of the pressure for banks and other financial organisations to adapt, transform and carve a new identity out of an everchanging ecosystem and set of demands and requirements, there cannot be a lapse in the protection of systems, of customer and client data, and hence, trust. This is, after all, arguably the most valuable asset banks have. Security, while not of itself the driver of digital transformation strategies and dialogues, underpins each and every activity, plan and transaction an institution makes or hosts. And the direction of travel that industry transformation is taking places a lot of pressure on reconfiguring systems to be robust, because that direction is branching out into the realm of myriad other players through open banking APIs. In some regions the opening of banking services is mandated, such as in Europe with PSD2; in others, a commercially-driven approach has taken hold, such as in the US. And in others still, where mobile phones have formed the basis of modern banking, it is more an innate approach than a transition or shift, such as in Asia Pacific. APIs are nothing new in financial services, but while they have always been a back office functionality tool, they have now moved very much to the fore in being the connectors of a new, more open financial ecosystem. They have been used to connect developers to payment networks as well as to display billing details on a bank’s website. Through open banking, however, APIs are now being used to allow third parties access to certain data sets, with the requisite consents, and vice versa. They provide democratised, low fidelity, low latency ‘bridges’ between organisations to facilitate the rapid expansion of the ecosystem, competition, and hence choice and empowerment for the consumer. But with such change and opportunity also comes great risk. Download your copy of this Finextra white paper, produced in association with Equinix, to learn more.

26 November 2020 489 downloads

Report

Accelerating Enterprise-Wide Innovation with Cloud Migration and Data Governance

A Finextra Research Impact Study in Association with Collibra and Amazon Web Services (AWS). In today's environment, data is produced and consumed at a rapid pace. However, the way it is currently being stored, accessed, and processed is inefficient. Migration to the cloud promises to change this reality for financial institutions, but there are several obstacles tied to digital transformation that must be addressed in the process. The exponential increase in data generation is set to continue in the coming years, especially as the adoption of mobile technology rises. The risk and opportunity introduced by big data to the financial services industry are unparalleled. As the most data-intensive sector in the global economy, the ability of financial institutions to obtain, process, and analyse their complex data assets – structured or unstructured – is becoming fundamental to market success and remaining competitive. Moving data to the cloud with a partner such as Collibra establishes a governance foundation for banks as ungoverned data lakes can quickly become data swamps. Data intelligence vendors can provide a platform that helps banks gain a unified view of data assets to unlock their true value. These technology companies can help improve trust in data to strengthen analytics and hasten time to insight through machine learning powered features such as automatic data classification, guided stewardship, and auto-discovery functions. Cloud migration and services such as those offered by Amazon Web Services (AWS) should be at the centre of banks’ digital transformation, but challenges around lack of executive alignment, technical skillsets, and data lake experience must be overcome in order to become masters of their data. Download your copy of the Impact Study below to learn more.

20 November 2020 309 downloads