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

Report

Is Request to Pay the System for a World of New Norms?

With faster payments going live in the UK in 2008, one could regard the decade-long recovery from the financial crisis as being a journey towards realtime payments. The last few years has also seen the advent of Open Banking, firstly in the UK and subsequently across Europe and elsewhere. Request-to-pay (RtP) is an example of harnessing Open Banking to serve financial institutions, SMEs and consumers in removing some of the frictions relating to sending and receiving payments for lenders, businesses and individuals. Ahead of its introduction later in 2020, RtP was billed as an integral tool to the transformation of the payments landscape across the world. RtP is being widely promoted in the UK, Europe, the Nordics and the USA, all of which have active industry programmes. This paper will explore the opportunities for lenders, businesses and consumers provided by RtP as well as the hindrances and challenges that would need to be addressed to move to widespread adoption. Download the full report below to find out more.

13 July 2020 973 downloads

Report

Shifting to the New Normal in Card and Digital Payments

It is an interesting time for the cards industry and for issuers there is a similar narrative to that of legacy banks and digital transformation. There have been several drivers of innovation in recent years, very much accelerated by the current pandemic and the various demands and transitions that have been wrought on the entire industry in different ways, as well as on the consumer and client base. What are the key factors for survival as competition increases and regulatory compliance bears down on security measures around customer data and fraud as well as on a looser and more empowered user experience? Utilising new data that can be more easily captured and carried with transactions can inform and shape new services, and better overall understanding of customer behaviour, leading to increased personalisation and an array of added features. As integration into retail commerce platforms and an increased demand for frictionless and invisible payments takes hold, is the physical card becoming obsolete or can issuers create new propositions to retain their position? Competition in the cards industry has evolved from terms such as interest rates and fees, to balance transfer products, to loyalty and rewards and more recently has been diversified by new fintech providers. This research paper by Finextra, produced in association with FIS, is based on several interviews with cards industry experts, to formulate a view on how issuers can compete in the digital world as payments continue to proliferate and fintechs disrupt the status quo. Download the full report below to find out more.

07 July 2020 891 downloads

Report

Instant Payments: Why Covid-19 is Bringing the Roadmap Forward

Business continuity has never been a more valuable asset for financial institutions. Fundamental changes to 'business as usual' as a result of Covid-19 have exposed the need for resilient, reliable, and efficient systems to maintain essential payment services and protect the interests of all ecosystem participants, from consumers to the largest corporations. At the same time, in the lead up to the European Single Market Infrastructure Gateway's (ESMIG) 'big bang' migration at the end of 2021, EU financial institutions are understandably consumed with ensuring that they are appropriately equipped to manage the systemic changes the migration will demand. While ESMIG provides a hard deadline to work towards, every institution bears unique targets and objectives, making the structure and execution of these plans more challenging than ever. In this context, it might seem that the adoption of real-time or instant payments—immediate settlement of account-to-account payments on a 24x7 basis, domestically and cross-border—should reasonably take a back seat to more pressing existential concerns. After all, while the ESMIG migration is mandatory, instant payments are not, and financial institutions could be forgiven for focusing solely on compliance-driven projects at the expense of optional ones. This impact study will outline why the reverse is true: that in fact, the move to instant payments takes on an increased urgency in the coronavirus age. It explores the benefits of instant payments for banks' internal operations as well as their customer value propositions. It also examines shifting approaches to business case development, and the increasing relevance of cloud and as-a-service models for instant payment processing. Find out more by downloading your copy below.

11 June 2020 639 downloads

Report

The Future of Blockchain 2020

Where DLT is taking effect in financial services and what the future holds. Recent years have seen explosions in interest around blockchain technology, from Bitcoin’s price peaking at nearly $20,000 in December 2017, to the proliferation of initial coin offerings (ICOs) in 2018. In general, interest has been propelled more through hype than expectation. Distributed ledger technology (DLT) has presented many compelling use cases that would make financial services processes easier, quicker, cheaper and more transparent. This has been demonstrated already by numerous major banks who have launched projects in areas such as identity, settlement and foreign exchange. In this report, Finextra Research explores this and other use cases for DLT in conjunction with experts from the financial services industry, and examines what needs to happen for the technology’s potentials to be fulfilled. Download your copy of the report now.

11 May 2020 995 downloads

Report

How to Adopt SWIFT gpi by the 2020 Deadline - Build, Buy, Outsource or Collaborate?

The need for speed, certainty, and seamless integration in cross-border payments is becoming increasingly apparent. SWIFT’s Global Payment Initiative, more commonly known as gpi, is fast becoming the standard for global funds transfers. The need for speed, certainty, and seamless integration in cross-border payments is driven by user expectations of instant services, the digitalisation of traditional payment services, and the streamlining of financial supply chains by banks and corporates. For SWIFT’s community, payment confirmations represent the next piece in the puzzle in the path towards creating a seamless, cross-border payments experience for every financial institution and corporate member, and each of their customers. Financial institutions must position and prepare themselves to adopt the requirement on schedule or run the risk of sending non-compliant cross-border payments - if such transactions can be sent at all. For firms seeking to keep pace with the cross-border payments evolution, banks and corporates alike are faced with the challenge of identifying and adopting an effective strategy to adopt SWIFT gpi. The question firms must answer, as they juggle the real-world pressures of cost, competition and cumbersome legacy systems, is whether it is best to build, buy, outsource or collaborate. Find out more by downloading your copy below.

08 April 2020 693 downloads

Report

Underpinning Innovation with Real-Time Payments

Real-Time Payments growth is just the beginning. Real-time payments systems are proliferating around the world, with higher values and volumes together with greater cross-border connectivity. The industry is tasked with designing and creating the market infrastructure that supports this growth, and is increasingly turning to hybrid multicloud deployments to deliver a new wave of innovation that can take place within all manner of systems, from fraud detection through to liquidity management and accounting software. Increased collaboration and global standards underpin the upward trajectory of digital transformation in a rapidly changing financial ecosystem. Download the full white paper below to find out more.

31 March 2020 902 downloads

Report

The Irish Banking Ecosystem, Interconnection and the Speed of Change

Irish banks are operating in a rapidly changing market and must embrace new technologies and business models to keep pace and to stay ahead of energetic new entrants. But the same banks should accept that they cannot make this transformation alone and have to seek out new partners if they are to succeed or even survive in a new marketplace. The current trends towards open banking services, increasingly digitised products, and the appetite for real-time payments is playing out globally. In Ireland, where fintechs and big tech both reside in increasing numbers,the trend is especially acute. Many banks are adopting a cloud-based strategy to cope with new processing demands and to extract value from the increasing amounts of data, constantly generated from a myriad of remote devices. ‘Fast, agile and secure’ is the order of the day in order to join up the dots in the emerging ecosystem and be a frontrunner in the development of dynamic new products and services. The question is, can banks do it alone and what are the key ingredients for a successful partnership? Download the full white paper to find out more.

16 March 2020 413 downloads

Report

The Information Advantage: Driving Opportunities and Mitigating Risk in a Hyper-Connected World

What's next for business in this world of digital services and data? Collaboration, interoperability and a trusted network in which to operate came to the fore as the key factors to support business growth and financial services transformation during a recent roundtable, held under Chatham House Rule. The roundtable was hosted by Finextra, in association with OpenText, and brought together payments and industry stakeholders to discuss the pertinent issues and drivers around digital and operational transformation. The themes have percolated and resonated in follow-up discussions since. Delegates discussed the pressing challenges as well as opportunities, and how to solve them in order to improve the landscape for commerce. Download the full report to find out more.

09 March 2020 417 downloads

Report

The Future of Regulation: 2020 Predictions

Transformative regulations designed to stimulate and steer the exploding number of developments in innovation will be a dominating influence across the financial services industry in 2020, driven by the ongoing pressure fintech disruptors exert over incumbents. Concern over regulatory enforcement has increased significantly. Firms understand they are putting themselves at risk by violating regulations, and nearly 25% feel that the most important function of compliance is the avoidance of incurring such fines. This report explores the key regulatory updates that are bearing down on the financial services industry during 2020 and beyond, delving into the ramifications of the changes and consult industry experts to unscramble the intricacies of each regulation to advise on how to best prepare for each transition. Download your copy of the report now.

04 March 2020 578 downloads

Report

Payments, 2020 and Beyond: How Today's Trends Drive Tomorrow's Strategies

2020 is set to be another transformational year in the payments industry. Regulatory and innovation-driven trends set in motion in the 2010s, such as real-time/instant payments, open banking and ISO 20022 migration, will become the defining themes of the 2020s. Global, regional and domestic payments infrastructures will experience drastic overhauls in the coming years, as market participants race to connect and transact with greater speed, data transparency, and interoperability. While all geographies are experiencing these transitions, not all are progressing at the same rate, or in the same direction. As the author William Gibson famously noted: “The future is already here – it’s just not very evenly distributed”. This impact study explores the distribution of innovation, regulation and disruption across selected domestic and regional payments markets, as well as initiatives with global reach such as SWIFT’s ISO 20022 migration. Find out more by downloading your copy below.

26 February 2020 1190 downloads

Report

Unlocking Revenue Through Digital Identity

Banks' business is not banking, it's trust. When it comes to identity and authentication processes, financial services providers must look to the Nordic region as a blueprint. Sweden, Norway, Finland and Denmark have leveraged partnerships with banks to form strong and established digital identity propositions. Banks are at an advantage in comparison to governments, third parties or other financial services players, however a degree of collaboration is required because traditional lenders cannot succeed alone. Download your copy of the white paper below to find more.

30 January 2020 693 downloads

Report

4 Regulatory Changes Impacting Data, Identity, and the Digital Trail

This Finextra Impact Study, produced in association with DocuSign, examines the foremost regulatory changes affecting financial institutions and the businesses which transact with them, the key issues arising out of these changes and the avenues for opportunities in this dynamic context. Digital transformation has swept through the financial services industry, spurring innovation and prompting incumbents and disruptors alike to reassess how they can remain competitive while meeting complex regulatory requirements. This 4-point study outlines the 4 key regulations affecting financial services and why digital solutions hold the key to smooth compliance. Compliance with the London Inter-bank Offered Rate (LIBOR), Regulation E updates, the Federal Deposit Insurance Corporation’s (FDIC) Final Rule implementation and the refining of Capture Consent laws each demand that firms are equipped to manage these regulatory changes. Find out more by downloading your copy below.

22 January 2020 470 downloads

Report

The Critical Role of Cloud in Digital and Operational Strategy

The operational challenges facing financial services firms are only increasing - from regulatory requirements to new entrants and now open banking and digital transformation - all at a time when competition has never been stronger. Fortunately, cloud computing services are constantly improving and maturing. Now banks can get more than cost-savings from their use of the cloud. It can improve cost management, enhance data security and data management, reduce operational risk, and enable banks to migrate to a more decentralised, digital and collaborative operating model. However, there are issues that banks, both new and old, must consider to optimise their use of the cloud, such as cultural challenges, skills shortages and operational obstacles. One way to overcome these challenges and ensure the most effective use of cloud technology is for banks to work with a growing number of expert organisations to support and manage their cloud migrations and digital transformations.

27 December 2019 929 downloads

Report

Embracing Open Banking with Secure and Interconnected APIs

In financial services today, data is an asset. But only if it can be accessed, transformed and integrated securely into internal and external ecosystems. In the world of open banking the definitions of competitor, partner and customer are blurring. It is particularly important for financial institutions to have a cohesive strategy to manage the integrations that tie together their systems from back office to customer-facing channels. This needs to happen across lines of business and international operations, and be able to expose functionality and data to build innovative new services with third parties. Application Programming Interfaces (APIs) have become the most accepted method for building systematic connecting points between an organisation and the outside world. They are often used internally as well, alongside more traditional internal integration patterns such as file transfers and middleware. The widespread use of APIs has led some to talk of the “API economy” as a way to describe the new business models emerging. Large organisations are transforming themselves to compete and partner with new service entrants such as aggregators while start-ups create new businesses by combining functionality provided by APIs from multiple sources. There are many drivers for organisations to develop an effective API strategy. Within financial institutions from the board level down there is pressure to continually modernise and embrace digital transformation to optimise costs, become more efficient at developing new products and services and boost revenue from customers that expect better, faster, anywhere/anytime service.

20 December 2019 646 downloads

Report

How to Protect and Grow in the Fintech Industry

A 3-Step Guide to Generating Revenue and Becoming Profitable. A monetisation strategy must be devised so that the company can decide what value will be created and who will pay, whether it is the customer, thirdparties that want access to the consumer or third-party beneficiaries who can derive value from the user. There is no universal formula for success that can work across all business models. The most common way of generating revenue is charging consumers. This would work well in a startup model as these organisations are unencumbered by legacy infrastructure and cost structures, so new financial services entrants can charge fees that are lower than what customers are accustomed to paying, while at the same time, continuing to create better user experiences. However, untrusting customers want more than a better customer experience and companies need to establish revenue sources that can be diversified over time. Additionally, financial services providers must give their customers a reason to bank with them and this can be done by ensuring defences are built against financial crime, providing analytically driven decisions and streamlining the lending process. With this in mind, there are three important steps to be taken to proceed towards long term profitability.

09 December 2019 425 downloads