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

Impact Study

AI and Cloud: The Proving Ground for Regulatory Resilience in 2024

The current macroeconomic landscape is marked by exceptional volatility and uncertainty, posing challenges to traditional models in the financial services sector. Despite this new challenging market context, some financial institutions continue to hit pause on using AI and cloud technology, falling behind the curve. Leveraging new technologies can no longer be a zero-sum game. This impact study explores: How can AI and cloud be leveraged to improve back-end processes, rather than just front-end experiences; How migrating to the cloud can fuel new use cases; The regulatory impact of PSD3, DORA and more; The benefits of data sovereignty and data governance; And more. Download this Finextra impact study, produced in association with Microsoft Azure, to learn more.

22 December 2023 649 downloads

Event Report

Cloud innovation paves path to the future

An open banking platform has the power to transform a bank, whether the bank is looking to modernise using technology on-premise, in the cloud or as Software-asa-Service (SaaS). In turn, banks gain access to endless opportunities to engage with customers and scale for massive demand. This event report, in association with Temenos, highlights the key takeaways from Temenos Community Forum 2023 that took place in Vienna, Austria. Bringing industry experts and partners together to explore new opportunities opened up by emerging technologies and the cloud, this year’s overarching event theme was ‘Engage and Grow in a Cloud World’. In this report, we explore the different ways that the cloud is accelerating transformation in the industry, including: Why banks are being disrupted by BaaS and embedded finance services; How agility, innovation, and customer experience are gaining momentum on the cloud; How to build resilient cloud infrastructure for sustainability; And more.

19 December 2023 178 downloads

Future of Report

The Future of Digital Banking in North America 2024

2023 was characterised by increasing amounts of uncertainty and a lack of clarity across the financial world. The collapse of banks, including Silicon Valley Bank, Signature Bank and First Republican Bank, in March 2023, added strain to already unsettled financial markets. While market volatility has remained relatively stable, soaring inflation and climbing interest rates slowed economic growth and this is expected to continue into 2024. While forecasts regarding the length and severity of a possible recession are speculative, experts are even more divided about stock market predictions for 2024. Optimism is strong in many investors who expect that 2024 is the year rates will stop rising and predict bullish turns that will see markets soar to new heights. Yet with many other factors affecting North American markets, the only certainty we can expect as we look towards 2024 is more uncertainty. This Finextra report on the outlook of North American banking trends, is produced in association with Money20/20 and includes key insights and commentary from industry experts at EY and Mastercard.

23 October 2023 732 downloads

White Paper

Build, Buy or Bust – Hybrid leapfrogging Legacy

The age-old Build Vs. Buy conundrum has never been brought into sharper focus than it is now. In light of unprecedented unpredictability and economic volatility in recent times, in light of converging pressure brought about as a result of myriad payments systems, real time rails, cross-border implications in a global village, standards development and heightened public awareness and expectation, financial institutions are leaping forwards by falling back on partners to bring systems in line with modern business expectations. Undoubtedly, the advent and availability of open source technology has intensified and strengthened both sides of the Build Vs. Buy argument. For one thing, it has enabled banks and financial organisations to tailor and sculpt new processes and systems around their exact needs, with the availability of non-proprietary technology. For another, it has brought about a plethora of third party ‘enablers’, as well as having inspired fintech services firms by way of creating plug-and-play or pay-as-you-go offerings. And alongside all of this, the development of cloud technology and its permeation throughout the financial services industry has oiled the wheels for the journey, facilitating the bespoke and dynamic capability that open source cloud offers, and compounding the technological know-how and prowess of both banks and fintech providers the world over. There are other influencing factors, such as the API economy, the concepts of open finance, open data; external global, market and economic drivers and events that shape the demand for improved and instant banking services in the first place, putting pressure on operations to the point that banks need to fast-track pretty much every modernisation or product development project they have going, inevitably having to outsource some of this burden. Download this Finextra report, produced in association with Cloudera, to learn more.

22 September 2023 265 downloads

Future of Report

The Future of the Global Financial Ecosystem 2024

A Sibos Special Edition. Our world has experienced several unexpected and unprecedented events over the last few years, which show no signs of slowing down. This year’s Sibos aims to connect those in the financial services community who have experienced fragmentation, in the hope that tackling this will help with some of the biggest issues facing banking. The role that financial institutions play in the global environment will continue to be placed under the microscope as situations continue to develop. In light of this, there has never been a better time for those in finance to come together and have frank and open conversations about their future. This applies to not only environmental and social goals for banks, but also the adoption of and adaptation to new technologies. No longer can these issues be placed on the side and given lip service, they need to become an integrated part of each financial institution’s core policies and practices. However, ever increasing this challenge are the continuously changing global circumstances. Due to these circumstances, communication and collaboration are essential drivers for 2024. This Finextra report, produced in association with Swift, includes commentary from BBVA, BNP Paribas, BNY Mellon, Deutsche Bank, ING, JP Morgan, Lloyds, McKinsey, NatWest, SEB, Standard Chartered, UniCredit, and Wells Fargo.

07 September 2023 1037 downloads

Event Report

Entering New and Niche Markets with BaaS

A Financial Cloud Series Report Banking-as-a-Service (BaaS) has emerged as a prominent and steady trend in the banking sector, significantly disrupting the industry and introducing consumers to faster and more personalised services. Working hand-in-hand with embedded finance, BaaS allows third-party distributors to provide banking services, essentially integrating financial services in non-banking infrastructures. Research revealed that the BaaS market is expected to reach $11.34 billion globally by 2030, a huge jump from $2.41 billion in 2020. The rapid acceleration of the BaaS market is due to the speed of digital transformation currently occurring in the financial industry, with a sharply increasing number of banks and consumers seeking to integrate BaaS services into their offerings in order to provide quicker and more efficient experiences. The rapid growth of third-party non-bank platforms has grown exponentially in recent years to incorporate BaaS services into their offerings. The global market has embraced BaaS and new innovations are pushing the trend to become even more significant in the financial industry. BaaS opens up new opportunities for smaller businesses and for a diverse range of companies to facilitate banking operations on a wider scale. The banking sector has evolved and become more diverse and sophisticated through BaaS, which allows companies to focus on what is best for both businesses and banks. To understand how embedded finance and banking as a service can help to transform the backbone of business operations, experts came together for a Finextra webinar, hosted in association with Temenos, 'Entering new and niche markets with BaaS'. The panel explored how banks can best diversify their product offering with cloud.

16 August 2023 298 downloads

Event Report

Keeping Pace with Customer Experience Demands during Cloud Migration

A Financial Cloud Series Report It has been widely established that the cloud is the next big step for financial institutions to become more agile, flexible, and scalable. The financial industry has become a storm as more and more companies flock to the cloud for data, real-time efficiency, and broader accessibility. According to Google, by 2027 over 50% of enterprises will have shifted to the cloud to boost their businesses and create more accessible and efficient platforms for their services. Cloud is seeing massive growth from all industries, and prominently from the fintech and banking sectors as industry leaders rush to get ahead of their competitors. However the move to the cloud is no easy task, as financial institutions require funds, time, energy, and talent to support the transition. As enterprises embark on their modernisation and digital transformation journeys, they are looking to new technologies to aid as they transition such as AI-driven technology. 72% of cloud experts see digital transformation as more than a simple task of “lifting and shifting” of company data to the cloud. The complexity of restructuring a company’s infrastructure with the help of a third-party in a new space is daunting, and requires a significant amount of prior planning and decision-making. To discuss how financial institutions are adapting to consumer demand and security concerns in the cloud transition, experts came together for a Finextra webinar, hosted in association with Temenos, ‘Keeping pace with customer experience demands during cloud migration’. The panel explored how banks are approaching digitisation on the cloud and using new technologies to scale up and expand.

11 August 2023 156 downloads

Survey

From Cloud to Multicloud, Pathway to Resilience

The term multicloud has various interpretations, each offering different levels of resilience and reliability for bank payment platforms. Financial institutions may believe they have implemented a true multicloud model, but discrepancies in definitions can lead to confusion. Download this report to gain insights from an industry survey, conducted by Finextra in association with Form3, which was designed to glean the general attitude and approach multi-cloud infrastructure, perceived benefits and perceived challenges around implementation. Notably, it sought to establish the general awareness of various new and incoming regulations around resilience and systemic risk, of how cloud and cloud providers can navigate this and how much, if any, business opportunity firms see in resilience and risk compliance.

06 June 2023 373 downloads

Report

The Future of Fintech in the UK 2023

A Special Edition for UK Fintech Week 2023 and IFGS 2023 Fintech investment across Europe, the Middle East and Africa fell from $79 billion across 2,379 deals in 2021 to $44.9 billion across 1,977 deals in 2022, according to KPMG’s biannual analysis of global fintech investment, the ‘Pulse of Fintech’ report. Further, total UK fintech investment hit $17.4 billion in 2022, down from $39.1 in 2021. The first half of last year was much stronger than the second, accounting for $32.8 billion in investment, including six deals worth over $1 billion, which includes the $1.8 billion acquisition of interactive investor by abrdn. The latter half of 2022 also saw $12 billion in investment, with the largest deals all valued under $1 billion, including the $839 million buyout of Nucleus Financial by HPS Investment Partners. But what does the future hold for fintech investment in the UK in 2023? This Finextra report, a special edition for Innovate Finance Global Summit and UK Fintech Week 2023, collates interviews with a number of leading fintech firms operating in the UK and explores topics that will be covered at the event in London. Key insights from the likes of Archie, Creditspring, Harrington Starr, Konsentus, KPMG, Moneyfarm, Nova Credit, OakNorth, Open Banking Excellence, Ozone API, Pave, Pollinate, PPRO, Quantexa, Sonovate, Thought Machine, Truelayer, and Zopa, cover how fintech firms across the UK are preparing for the future.

13 April 2023 686 downloads

Report

Customer Experience - Is Hyperpersonalisation the next frontier?

An Inflection Point as Banks Invest to Improve Customer Experience A Finextra research survey, which was conducted in late 2022/early 2023, aimed to quantify priorities and ambitions in financial services with regard to improving the digital experience of services for the customer, and to what extent services have or will become personalised, or even hyperpersonalised. Financial institutions are prioritising investment in customer experience capabilities in what is seen as a key “inflection point” behind new IT-led growth initiatives, results from this primary research survey show. But feedback also reveals the challenges this objective brings, including legacy IT infrastructure and restrictions imposed by regulatory obligations around data storage and processing. The findings show a genuine and growing appetite by banks and other financial service providers to invest more in making customers’ online engagements easier and more fulfilling. Download your copy of this Finextra Survey Report, produced in association with SoftServe, to learn more.

06 April 2023 447 downloads

Report

SaaS: The case for building a new banking business model

Why is SaaS pivotal to tackling regulatory, competition, and technology challenges? Banks are no longer only interested in building their infrastructure in order to serve their customers the best they can. Rather, they strive to position themselves as the orchestrators of API platforms. Software as a Service (SaaS) deployment models are the ideal tool to reduce the struggles faced by banks as their role evolves. SaaS models are highly effective, as they target some of the key challenges banks face in their efforts to digitally evolve while remaining competitive. An increasingly demanding customer base, competition from agile digital players, regulatory burdens and legacy technology are four of these significant hurdles that can be mitigated using SaaS. Not only does SaaS assist in managing these challenges, it can also equip financial institutions with the toolkit required to thrive in the future. This Finextra impact study, produced in association with Temenos, explores how banks can best leverage technologies by third-party providers in order to mitigate industry pressures threatening their business model, adapt to shifts in customers' interaction behaviour, and improve their ability to remain competitive in an increasingly digital ecosystem.

03 October 2022 519 downloads

Report

Mainframe to Cloud: How to shift applications

The shift to the cloud The financial services industry is increasingly turning to the cloud to resolve challenges involving the movement of money. However, some banks, payments providers, capital markets firms and insurance companies are still questioning why an accelerated shift to the cloud is required. Further, what are the conditions, circumstances and considerations that should be taken into account when looking to migrate applications? It’s not just about technology. It’s about culture and the talent that is needed to transform from a legacy-based infrastructure and deal with a more agile method of operating and collaborating with partners in a cloud environment. This generational repositioning should be managed in an efficient manner to facilitate a successful, safe passage of moving from one domain to another. The mainframe, or the central repository, in an organisation’s data centre is usually linked to its users through workstations or terminals. Although the presence of a mainframe often implies a centralised form of computing, they are in dire need of modernisation. Those with awareness of how to transform the mainframe, how to consume the cloud, and who are able to to establish a strategic blueprint for their digital transition will be better positioned to retain their customer base. Each financial institution will have a different journey to the cloud: some will opt for a hybrid model, others will transform with the cloud or to the cloud. Mainframes present vast opportunities, but the time has come for the self-written applications and the mainframe-based business processes to be modernised. To explore these opportunities, specialists gathered for a Finextra webinar, ‘Mainframe Modernisation: The cloud shift’, that was hosted in association with Deloitte and Amazon Web Services (AWS). The webinar panel looked to discuss how mainframes can provide mission critical functionalities for financial institutions and the very specific challenges that come with modernising mainframes. This event report outlines the findings from that session.

05 September 2022 331 downloads

Report

Rebundling: The Next Stage of the Fintech Evolution

The next stage of the fintech evolution is rebundling. At the core of the industry, the catalyst for fintech evolution has continued to be disruption and innovation, but not one banking or financial services issue can simply be resolved with only disruption or innovation. After the global financial crisis of 2008, it would have been unusual to have more than one or two banking relationships. However, the emergence of an open playing field, and with the application of the Second Payment Services Directive – more commonly known as PSD2 – across Europe, non-financial businesses were able to leverage open banking and open finance initiatives to offer financial services directly to their customers. This, in turn, widened the competition and resulted in the birth of fintech businesses that each focused on attacking one part of the banking value chain – be it payments, lending, FX, or another type of offering. Slow, complex, and expensive processes were no longer the status quo; and alternative players started to disintermediate the incumbents. These new entrants increasingly became popular because of their intention to improve customer experience and provide better products and services than the banks could – and in many cases, disruptors were both better and cheaper than the banks. Additionally, new fintech channels and platforms have become viable competitors to traditional players, tempting consumers away from the institutions they trust in favour of better user experiences. Now it is not unusual for people to have up to 15 financial apps downloaded on to their mobile phones. This Finextra impact study, produced in association with Banking Circle Group, explores the evolution of fintechs and Big Techs from unbundling towards rebundling of financial products and services to the benefit of customers, as well as providing examples for the modernisation of banks and financial institutions.

22 July 2022 788 downloads

Report

Real Time Payments: Solving today's problems for tomorrow's success

Banks understand what they need from real time global payments, but reaching a position where they can leverage the full benefits available is a significant challenge. While multiple projects are underway around the globe in an effort to bring real time to multiple markets, before banks can tap in to the advantages of real time, they must first get their technological house in order. Banks must consider how real time payments should interoperate with each other, and create real time global settlement and clearing. Why does this remain such a challenge? It is all related to what is happening in the payment structure of traditional banks. Whether it’s a tier 1 bank encumbered by legacy systems, or a smaller bank with limited coverage of cross border capabilities, in almost every financial institution, payments tend to be segregated. This Finextra impact study, produced in association with Form3, will explore the current challenges faced by banks in their efforts to meet instant payment objectives, how the global real time ecosystem is driving pressure on financial institutions to evolve, canvas key trends pushing the real time agenda, and the best way for banks to orient themselves for real time success.

23 June 2022 835 downloads

Report

Cloud, the Critical Component to Power New Business Models

Today, every company is a technology company. No organisation can modernise products, deliver services, or meet customer expectations without harnessing the benefits of technology. Financial institutions are now learning from leaders in other industries and applying acquired best practices for successful cloud adoption to their business models. The financial services industry is at an inflection point in its use of technology and banks have already started to seize this moment and embark on their transformation journeys. With the increased agility that the cloud offers, products can be brought to market much faster and in a cost-efficient manner, which is what has led to traditional financial institutions adopting and migrating to the cloud with urgency. Key drivers, in addition to resilience, include the desire to be more efficient from a developer productivity standpoint and raising the bar on security has been equally important. To workshop these best practices, experts gathered for a Finextra webinar, ‘Modernise, innovate and transform on the cloud’, hosted in association with Tata Consultancy Services (TCS) and Amazon Web Services (AWS). The panel looked to explore how financial services organisations are leveraging the cloud to transform existing businesses and bring innovative new solutions to market.

11 March 2022 395 downloads