Research

clear
clear

Latest Results from /identity

Impact Study

Payment Fraud in 2024: Who is Liable?

Fraud is a billion-dollar business in the Instant Payments era. Statistics show that ecommerce fraud is predicted to exceed $48 billion globally by the end of 2023 alone and could exceed $362 billion between 2023 and 2028.  In 2024, banks will not only contend with the changing liability landscape, but the upcoming adoption of ISO 20022 as well. Both represent a historical shift in the financial services industry. To prepare for a higher degree of liability in a data-rich environment, banks need to address the holistic landscape of fraud mitigation.  This Finextra impact study, produced in association with NICE Actimize, addresses the changing liability landscape and what banks need to do to prepare for regulatory changes and increased fraud protection.  We cover:  Shifting liability and the impact of new PSR regulation  ISO 20022’s impact on the financial industry  Financial industry priorities in 2024  And more. 

490 downloads

Survey

Definitive Differentiators - Forging a future-proof payments model

Over the last few decades, banks have been forced to reconsider their business model for transaction services. During the era of low-interest rates, the focus shifted to transaction revenues, and while the pendulum is now pivoting back to utilising the balance sheet for revenue growth, the amount of new regulations impacting the industry is ever-increasing. New technology and market regulation have fostered innovation and new market entrants. This “perfect storm” is exposing a number of potential threats for banks, but also new opportunities to expand the share of customer wallet and time to market, and drive cost efficiency through standardization. This Finextra survey report, produced in collaboration with Tietoevry, explores the key factors driving changes to payment models for different financial institutions and how they can wield continued or differentiated success in the evolving landscape.

591 downloads

Impact Study

APP Fraud Liability: A Guide for Banks

Fraud is running rampant. The UK Government's 2023 'Fraud Strategy' report highlighted that fraud now accounts for over 40% of crime, yet receives less than 1% of police resources. More needs to be done to ensure that the consumer is protected.  This is why, as per the Financial Services and Markets Bill, all PSPs will now be required to reimburse fraud victims from October 2024. In light of these upcoming changes, banks need to reassess how they manage liability associated with APP fraud and develop new methodologies in order to investigate and mitigate fraud more effectively.  This Finextra impact study, produced in collaboration with Form3, gives banks a guide to tackling the new APP fraud liability landscape. It highlights:  Risk scoring payments  Implementing the right intelligence  Considering false positives  Ensuring explainability  And more. 

559 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.

732 downloads

Future of Report

The Future of Fintech in Africa 2023

Across fintech - digital banking, digital payments, personal finance, lending, and investment - data is central to the function of all these technologies and the most important source for the analysis of financial products and services, bridging the gap between data security and customer satisfaction. Many organisations, countries and regions have forged ahead in leveraging data, cloud, blockchain and AI to their advantage – one such continent is Africa. Two years after the global financial crisis, Kenyan payments, money transfer and micro-financing service M-Pesa became the most successful mobile phone based financial service in the developing world. This was also just three years after its launch by network operators Vodafone and Safaricom. Further to this, transaction flows sent by banks have grown by an average of 10% year-on-year during this 10-year period. Alongside this, mobile money payments have exploded, with the monthly value of transactions increasing 25 times over between 2010 and 2018. The digital payments market has matured faster in Africa than it has in Europe: the number of electronic payments in France grew from 33 million in 2009 to 61.5 million in 2018, but in Nigeria, the number of electronic payment transactions grew from 66 million in 2008 to over two billion in 2018, according to Statista. Further to this, the number of digital payments users is slated to amount to a staggering 611 million users by 2027. However, Africa’s largest market will be digital investment with a total transaction value of $994 million in 2023 and the digital assets market is expected to show a revenue growth of 36% in 2024. It is evident that Africa is on the rise and leveraging technologies such as AI, blockchain, cloud, and data will only allow the continent’s fintech firms to excel across the digital banking, digital payments, personal finance, lending, and investment sectors. This Finextra report, produced in association with Kora, compiles expert insights from a range of firms, including: Binance, Cloud Africa, Data Scientists Network, JUMO, Mojaloop Foundation, TymeBank, and Yoco, and provides predictions for the future of fintech in Africa. 

571 downloads

Sentiment Paper

Seeking Approval - Acquirers vs. Transaction Fraud

Transaction fraud monitoring lies at the heart of fraud prevention for acquiring banks, and while the effort in decreasing fraud rates has advanced significantly, so has the sophistication of fraudsters themselves. The emergence of AI within fraud solution models has come to the fore in recent years and along with it, newly realised appreciation of the value of transaction data, current and historic. Banks need to get to grips with processing and utilising these data to full advantage, to inform a robust and futureproof strategy which can both increase approvals and reduce fraud. For transaction monitoring solutions to drive value, serving both merchants and acquirers alike, intelligence on any given transaction needs to be issued in real time before the submission of authorisation. Approval rates, pricing, customer-centricity, and fraud rates are always going to be key differentiators in a very competitive market. Within these parameters, banks need to continually improve their service to remain competitive, while navigating the various tools and techniques that are rapidly emerging. Different business models prioritise different aspects of case management and scoring, using traditional rules-based methods and more data-led AI and ML approaches. This Finextra industry sentiment report was produced in association with Brighertion, a Mastercard company. It is based on several industry interviews, through which we aim to take a pulse on the industry’s general appetite for real-time, AI-driven, data-rich transaction fraud monitoring, and the various models, technologies, and priorities that shape acquirers’ anti-fraud strategies.

464 downloads

Report

Onboarding, KYC, and Digital Identity: the Bottom Line

Technology is continuing to evolve at a fast rate. Consumers have evolved and now expect a digital onboarding process. This presents an opportunity for banks because enhanced customer onboarding can boost a bank’s retention rate. It is the first interaction that a customer, instead of a prospect, experiences and if conducted correctly, it can lead to multiple purchases and build customer loyalty. Regardless of how seamless the process is for a customer to be onboarded, it is only revenue that will result in a return in investment. While automation can supplement an excellent customer experience, nation-wide digital identity schemes can also improve the process. Across the world, governments have played an important role in helping set the scene for digital ID solutions, but a government-only solution is unlikely to be successful. Banks, fintech firms and technology providers must collaborate to ensure identity solutions are utilised. However, while customers want an easy onboarding process, organisations must capture, validate, and monitor customer identities — without increasing customer friction. Taking collaboration further, within the organisation, digital transformation, risk management, data security, and compliance teams must put best practices in place to balance digital onboarding with fraud prevention. This Finextra impact study, produced in association with VeriPark, explores how despite the emergence of digital channels, onboarding is still occurring in a fragmented manner.

809 downloads

Report

The Future of Payments 2022

The Cutting Edge of Digital Payments The Covid-19 pandemic and Russia's invasion of Ukraine in 2022 has proven that the financial services industry must be always at the cutting edge of payments. Amid uncertain times, resilience is key and with the rising cost of living expected in the UK and across Europe, criminals will view this as an opportunity to infiltrate financial systems and attack. We will need to adapt at the same rate as fraudsters, and all digital systems must be designed with security at the forefront. Alongside this, education will be crucial to ensuring customers are aware of the risks involved with new financial or payments schemes. As seen with the UST crash and instability around digital assets, the sector must remain cautious before placing all our bets on uncharted waters. With expert views from Banking Circle, CBI, Form3, GoCardless, and Infosys Finacle, in this report you will learn from industry leaders about the events and trends defining global payments in 2022 and beyond. The report also includes insights from Fluency, Hogan Lovells, IBM, McDermott, Will & Emery, Nationwide, Nordea, Linklaters, TSB Bank, and Visa.

1741 downloads

Report

The Future of Digital Identity 2022

Inclusive, Secure, Fit For Purpose Digital identity will be the catalyst for financial institutions wanting to navigate the data ecosystem in an increasingly sophisticated manner. In addition to an equivalent or replacement to physical identity documents, digital identity has also become a way to provide verified personally identifying information (PII) for software to read and process. Alongside this, over time, digital identity is also being utilised to enhance privacy protection and reduce financial crime through authentication. While biometrics are now part and parcel of life in 2022 – with the prevalence of mobile payments with Face ID and Touch ID – the concept of real-time and frictionless processes is what is driving the future of digital identity forward. According to the World Economic Forum, good digital identity has five key components. These five components form the basis of this report: Useful Inclusive Secure Offers choice Fit for purpose With expert views from CGAP, Citi, EPAM Continuum, HSBC, KPMG, London School of Economics, Loughborough University, The Purple Tornado, and the United Nations in this report, you will learn from industry leaders about the events and trends defining digital identity in 2022 and beyond.  

1077 downloads

Report

Facing up to the Future: Biometric Automation in Banking

The advantages of biometric authentication in banking over less secure passwords are now well understood. Biometric measures such as fingerprints and face verification not only help to reduce fraud and financial loss for banks and their customers, but they make transactions more convenient and faster for users. As a result, consumers the world over have become accustomed to the merits of biometrics. However, the use of biometrics is not without its challenges. The first of these is that wherever technology breaks barriers in terms of convenience and usability, so surely will fraudsters follow to find nefarious ways to breach new barriers of security.  What remains difficult for the financial services industry is the live authentication that a verified identity is indeed a real person logging on in real time. Fraudsters are structured and organised, and impersonation can take many different forms.  Banks need to be able to deliver a consistent yet flexible level of ongoing security depending on the risk profile of the transaction.  Biometric authentication can provide a consistent yet flexible experience to make online banking simple, convenient, secure and inclusive to customers.  Cloud-based services, as opposed to device-based authentication, mean attacks can be fixed faster and in an isolated fashion so as not to affect other parts of the system. They also facilitate faster and more comprehensive analysis of activity, which means any future potential attack can be addressed more quickly.  This white paper from Finextra, in association with iProov, will explore the following points and more:  The latest technologies available to banks to facilitate biometric ID verification and authentication  The perception and preferences of banking service users and the current methods and techniques banks are employing  How cloud-based biometrics can bridge the gap between now and the future of seamless and secure authentication services 

459 downloads

Report

From Surviving to Thriving: Digital Customer Engagement beyond Video Conferencing

During the Covid-19 pandemic, and ensuing national lockdowns, one of the key challenges for financial services professionals involved in customer or client advisory has been ensuring a smooth digital migration – and that consumers are adequately served via video conferencing solutions. Now that the industry has largely adjusted to this ‘new normal’, it is time for those across the retail, private banking, and insurance sectors to think about how to further upscale their online customer journey, client service, and Know-Your-Customer (KYC) processes, by adopting an innovative, omnichannel, digital customer engagement solution. By providing easier online access to financial guidance and advice for existing clientele, financial players assume a more customer-centric approach, which can result in improved customer retention, increased revenues, and maintenance of marketshare. Download this Finextra impact study, in association with Unblu, to learn more.

206 downloads

Report

The Future of Payments 2021

The Road to Successful Digital Transformation. Every player that operates within the intricate ecosystem of financial services is at a tipping point. The pandemic deeply entrenched the digital agenda, especially for payments, and financial institutions recognise that the effects of Covid-19 are likely to have a permanent impact on the industry. Tink1 found that 74% of European banks see an increased need to enhance their digital services, and 65% believe that banks must increase their speed of innovation. This immense pressure to digitise is being played out across the globe, as regulators and industry bodies scramble to expedite timelines for the modernisation of payments systems. On top of this, technology firms and fintech startups have never been more innovative, leaping into action to capitalise on the opportunity the pandemic presented and shepherd financial services into the new digital world. Embedded finance is answering the demands of consumers, and incumbents are eager not to lose their footing by investing heavily to innovate and evolve. Open banking has taken hold in several jurisdictions, and in certain circumstances, is flourishing into the more expansive open finance. Ultimate success will depend on fundamental impediments such as incumbent banking cooperation, consent mechanisms, and concerns around privacy being managed or removed. Certainty around digital identity is predicted to bolster not only the momentum toward open finance, but to build on the capabilities required to deliver a central bank digital currency. 2020’s upheaval of brick-and-mortar retail led to the soaring uptake of e-commerce and a shift in payment trends, as contactless transactions became the norm. While the efficiencies of this new digital world have been exponential, criminal activity has naturally followed, and financial institutions are having to protect customers from sophisticated fraudsters. New forms of crypto assets further complicate the situation, especially as regulators attempt to balance the need to regulate alongside the need to foster innovation, all the while attempting to protect consumers from new forms of harm. The opportunities, however, are myriad in nature. The seemingly unquenchable appetite for the potential new technologies hold payments modernisation appears to be outpacing the historically risk-averse financial services sector. With expert views from Banking Circle, Nuvei, and Thunes, in this report, you will learn from industry leaders about the events and trends defining global payments into 2021 and beyond. The report includes insights from BNY Mellon, Citi, Deutsche Bank, ING, J.P. Morgan, Metro Bank, Nationwide Building Society, Open Banking Implementation Entity, Plaid, Rabobank, Raiffeisen Bank International, Société Générale, and SWIFT.

1436 downloads

Report

The advantage of Machine Learning in preventing fraud

Accurately identifying customer behavioural trends and proactively preventing payments fraud and other criminal activity at the outset can be done with machine learning. Ingesting tens of thousands of complex signals and analysing patterns to monitor activity is more effective than blocking transactions based on hard-coded and antiquated rules. Fraudsters can learn to circumvent these, and trusted users are put at risk, which is why embedded machine learning algorithms can be valuable. Download this Finextra impact study, in association with Sift, to learn about: Payments fraud and how machine learning is being leveraged today, Account takeover fraud, the biggest future threat to banks, and Synthetic ID fraud, the next opportunity for machine learning.

390 downloads

Report

Identity verification’s integral position in evolving digital transformation

Eliminating friction by enhancing onboarding processes with efficient identity verification is of paramount importance to the success of a financial institution. While data can bolster streamlined onboarding and verification, it can also support the delivery of actionable insights for the creation of personalised services. This establishes a comprehensive view of the customer, increases loyalty, boosts sales, and generates revenue. Therefore, in an increasingly competitive market, the transformation of user experience must be prioritised, and identity verification is central to that objective. Download this Finextra impact study, in association with Jumio, to learn how to: Establish a competitive edge with efficient onboarding, Reduce abandonment rates, Utilise biometrics, facial recognition, and AI, Ensure a positive, seamless user experience.

326 downloads

Report

Corporate Onboarding: Will it become a competitive differentiator for banks in a real time world?

The way in which banks onboard corporate clients can impact many aspects of their business, from reducing time to revenue, to improving customer experience and loyalty, and to compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. The accuracy of data used for onboarding customers is therefore a key differentiator for banks. Relying on primary source data that is legally compliant contributes to compliance peace of mind, while banks can make better decisions based on compliant data that is 100% accurate and continuously updated. This is particularly important in the world of corporate onboarding, where vetting a company can be time and resource heavy, and a complex task with many moving parts. Accessing regulated and authoritative data from company registries to onboard a client in a timely manner is a complicated process that involves a series of manual checks. There are continual updates to regulations to comply with, such as the requirement for ongoing monitoring within the 5th Anti-Money Laundering Directive (5AMLD) as well as due diligence in ensuring that company data for KYC checks is up to date and accurate. From a business perspective, banks are keen to onboard new customers as quickly as possible to maximise income and profit. An efficient process can also be a crucial differentiator in procuring loyal clients for a lifetime of service. Expectations for a real-time experience are growing in the corporate environment, just as they have in the world of retail and consumer banking. This white paper explores how banks can deal with changing KYC regulations and the incoming 6AMLD; what technology can be utilised to assist banks achieve seamless corporate onboarding; and what stands to be lost, and more significantly, to be gained, with a seamless real-time onboarding experience. Download your copy of this Finextra white paper, produced in association with Kyckr, to learn more.

758 downloads