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

Report

The Future of Cybersecurity: 2020 Predictions

2020 promises to be another politically-charged year around the world. Even with the possibility of any referenda in the UK now largely removed, the US election in November may bring to the fore cyber threats and the evolving methods of nefarious actors to interfere with business and government. Financial services companies will therefore be monitoring the cybersecurity space and evolving threats encountered and the methods used to mitigate them. In conjunction with experts of the financial services industry, Finextra explores trends to watch and predictions for cybersecurity in 2020 and beyond. Download your copy of the report now!

28 January 2020 721 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

Avoiding Improvisation: A 3-Step Guide to Harmonising Electronic Identity Verification

Challenges to due diligence compliance come in multiple forms - biometric, document validation, electronic identity verification - making this a vast and varied area of concern for financial institutions. Research by Fenergo states that fines levied on financial services firms for KYC, AML and sanctions-related breaches since the financial crisis total nearly $26 billion. However, due diligence is inherently complicated for global companies required to meet the regulations of multiple countries and regions. The chief compliance officer of a global organisation has an incredibly complex job. This role could be compared to that of an orchestra conductor ensuring that all areas of the business are following the sheet music of regulation properly and that everyone is keeping time and playing their part. This is a point study of the key considerations companies should make in their due diligence requirements in electronic identity verification (eIDV). Download your copy of the imapct study below to find out more.

08 January 2020 315 downloads

Report

AI and Information Paving the Path to Personalisation

This report details the results of a survey on AI, onboarding and information readiness in financial services that was conducted online in mid-2019 by Finextra, in association with OpenText We had responses from 70 financial institutions, predominantly from retail and corporate banking groups, in 42 countries. While customer personalisation for guidance and communication is widespread in financial services (63% of respondents), moving beyond segmentation to true individualisation of product and service is not yet a priority. Only 9% of respondents ranked this first or second on an importance scale. AI is going to have an impact across many different parts of financial institutions, but 42% of respondents to this survey believe it is going to have the biggest effect on the value chain in the area of customer service and retention. But only if challenges around accessing data from disparate sources and growing management’s understanding of AI can be overcome. Just over half (58%) of respondents say they can today onboard new customers using only digital channels. Most of these digital-capable banks can complete onboarding processes in two days or less, but this was more likely for retail institutions rather than corporate banking divisions. Overall, 45% of survey respondents say they can complete onboarding of a new customer in 40 minutes or less. 80% of organisations say they aspire to exchange, integrate and leverage underutilised data sitting siloed inside their enterprise’s legacy applications. But the nature of these systems poses the biggest challenge to effective information governance. Download the full paper to find out more.

07 January 2020 464 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

Report

How European Retail Banks are Riding the Wave of New Technology

Retail banking is in the midst of change and technology is driving transformation, connecting physical and digital environments. Incumbent banks, challengers and neobanks are also focused on developing online and mobile banking services to meet the needs of the consumer, like the chatbot for retail customers, a conversational banking platform that most financial institutions (FIs) have launched. What retail banks are doing is challenging the status quo by adopting emerging technologies to combat issues that traditional financial institutions have faced for decades. This is just a drop in the ocean of the digital transformation that is to come.

18 November 2019 747 downloads

Report

Digital Transformation in the Data Economy to Improve Threat Detection

The digital transformation of the banking landscape has changed the way financial institutions treat their customer data. Add in the introduction of open banking and the emergence of crypto assets and this change becomes even more profound. Customer data has become critically important in this new data-driven economy, as has banks’ ability to capture and analyse this data in order to improve both their own performance and their users’ experience. The creation of a more connected and digital banking market also makes this data more vulnerable to cyber risk and fraud. With the right technology and tools, however, the same data can be used to markedly improve banks’ fraud and threat detection. This white paper will examine the effect of these digital developments on banks’ capture, storage and use of customer data. It will also look at the need for heightened data security in the open banking environment, as well as the central role that banks can play in managing and protecting their clients’ digital identities. What emerges is a compelling requirement for financial organisations to connect the dots internally, to both maximise the business benefit of a heightened data, digital identity and threat detection strategy, and to merge the strengths of hitherto disjointed departments to aid this transformation. Cybersecurity and fraud departments, for example, need to be working together to create a robust and secure operation. Finally, the paper will argue that with the correct use of new and emerging technologies, banks can not only ensure compliance with relevant regulations but also improve their customers’ banking experience and their own standing in a new digital and data-driven banking environment.

11 November 2019 449 downloads

Report

The State Of AI In Financial Services

A small number of multinational top-tier financial institutions are already among the most world's most sophisticated users of enterprise-level artificial intelligence (AI). But while much has been written about the potential for AI to address business problems across the industry, adoption rates and the level of maturity vary widely. The journey usually begins with data scientists pulling together data sets for experimentation and finding insights and ideas to suggest to innovation teams and business units. From there it often progresses to obvious use cases such as improving money laundering surveillance and financial crime detection. Eventually, organisations are widening the context of their data through internal consolidation and enrichment with third-party data, and running models and decision engines across multiple functions within the organisation. Depending on the use case, these can deliver streamlined digital channel processing with automated decisions – or rapid presentation of context and insight for human-in-the-loop decisions. It is the evolution leading to large scale investment, adoption of AI approaches and return on this investment, that this survey sought to illuminate. How many institutions are at each stage of this evolution? What use cases are they focusing on and what challenges are they encountering along the way?

30 October 2019 946 downloads

Report

The Future of Payments: How to Accelerate Digital Transformation in Payments

The last decade has seen an acceleration in the rate at which banks are being encouraged, or required, to innovate and transform their business. With PSD2 and GDPR now in action, questions are being raised about whether this was a success for the payments market and whether legacy structures need to be shaken up as the status of real-time payments and open banking initiatives in Europe become complicated. Banks are also having to contend with the likes of Google, Apple, Facebook, Amazon and Alibaba as they figure out the best way to deliver API-based, contextual financial services in an open ecosystem, especially when the suite of tools that artificial intelligence offers is being leveraged by Big Techs. Finextra’s The Future of Payments 2019 report will explore how financial institutions are transforming the cash management process to provide newer and more innovative solutions for liquidity, payments and electronic banking. The report looks at how banks are revising core operations following the implementation of regulations such as PSD2 across the European Union and discusses open banking initiatives that have blossomed in other parts of the world after learning from the mistakes made in the UK.

01 October 2019 759 downloads

Report

Data-First Transformation in HR: The Value Proposition of Implementing Compensation Technology

Wholesale digital transformation is the new norm in financial services. It will stay this way too, as organisations need to become agile, continually morphing and transforming in line with more sophisticated data management as well as frequent regulatory updates and iterations. In terms of operations and, more specifically, HR, banks can analyse data on employees to optimise business functions, better attract and engage top performers, and improve productivity in the same way that they leverage customer behavioural analytics to improve products and services. Holistic capturing of data can inform and fuel all manner of cultural transformation. With a greater view and better management of staff compensation across an organisation, a light can be shone on any pay inequalities, for example. Thus, diversity issues can be addressed and eradicated. Manual processes, heavily reliant on spreadsheets, are overdue for transformation, and greater understanding of rewards strategy and history alongside a better understanding of employees can strengthen and promote a stronger business ethos and brand and help attract the best talent. In this way, data-fuelled technology to improve compensation management can yield wider benefits to the business, and with a simplified and agile data management system, schemes of equal and greater complexity can be supported. Download the full paper to find out more.

30 September 2019 165 downloads

Report

Payments Transformation: Building a Vision Which is Instant, Seamless and Secure

2019 marks the 5th edition of the annual Fiserv and Finextra global payments survey. Since the 1st edition in 2015 the change, and the increasing pace and scale of change has been the consistent characteristic of the payments landscape, whether at a central infrastructure level or that of individual providers, all driven by rapidly changing customer expectations. As in previous years, the survey was undertaken online during the summer of 2019, garnering responses from senior executives at banks and financial institutions globally. The requirement to move money instantly, seamlessly and securely is now clearly understood. The ability of the payments industry, however, to deliver on that expectation is still very much a ‘work in progress’. Increasing the speed of moving money is a marathon, not a sprint and will take some years for the technical challenges and commercial benefits to be comprehensively worked out. This year we found a strong alignment of views across strategy and opportunities. The findings highlight again the extent to which the payments landscape remains dynamic and will continue to do so for the foreseeable future. Download the paper to read the results.

23 September 2019 1218 downloads

Report

AI, Open Banking and Client Lifecycle Management – Differentiation Opportunities Abound

In mid-2019 Finextra and Pega conducted an online survey of senior business and technology managers from 27 countries, representing 54 financial institutions and fintechs, on the impact of AI and open banking on their strategies for onboarding, KYC and client lifecycle management. This survey sought to gauge the current perception in the market of AI’s current use and suitability, and potential benefits and challenges, for implementation in the areas of onboarding, KYC and Client Lifecycle Management. It also asked questions to evaluate where open banking provides opportunities for growing market share and revenue growth, and to what extent it complicates onboarding and regulatory compliance processes. Download the paper now to read the results.

20 September 2019 886 downloads

Report

The Future of AI: Applications for banking business transformation

While artificial intelligence has established itself as a disruptive technology for decades, AI is at the peak of the hype cycle now and banks have started to apply this technology to transform traditional models of businesses. However, being a multi-faceted technology, financial institutions must decipher whether it is machine learning, robotics, deep learning, business intelligence, natural language processing or algorithms that are the most beneficial. While some banks launch chatbot applications and virtual assistants, others do not have the talent within the business to deploy innovative products that are personalised for their customers, and an even smaller number do not understand the value of AI. Finextra’s The Future of Artificial Intelligence 2019 report will explore how the financial services industry can leverage tried and tested experiments of AI in other industries to transform how transaction services can be reshaped. The report looks at how machine learning, deep learning and robotics could benefit banks and could improve customer experience and security, aligning decision-making factors with ethics to improve how a financial institution operates.

16 August 2019 858 downloads