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

Future of Report

The Future of Payments 2023

Gaining Ground on Global Interoperability. The European Central Bank defines interoperability as 'the set of arrangements/procedures that allows participants in different systems to conduct and settle payments or securities transactions across systems while continuing to operate only in their own respective systems.' While technological efficiency is critical to gaining ground on global interoperability, there are other elements that are crucial to the success of a global payments network. This includes the ability to build seamless connections, connect payment systems across different jurisdictions with varying regulatory requirements and ensure different demographic groups can transact reliably and securely. The payments and transaction banking industry may be unsure of where the fintech evolution will go next, but what is evident is that models for public and private sector collaboration must be established. What this means is that financial services must reach a resolution for the continued challenges around cross border payments, correspondent banking and liquidity management, if we are indeed on the cusp of the instant payments era. The European legislative landscape must also be looked upon as a support, not a hindrance and more must be done to implement the clever use of data so industry participants can forge ahead with initiatives such as open finance, banking as a service and turning payments processing into a business opportunity. Further to this, as technologies such as cloud, artificial intelligence (AI) and robotic process automation (RPA) are utilised for innovation, banks and other financial institutions must step up their fraud prevention and cybersecurity games and establish new ways of customer authentication. Now is the time for commercial banks to lead and the emergence of central bank digital currencies (CBDCs) has proved that strategic potential is there for this sector to thrive and pave the way for the next generation of payments. With expert views from Banking Circle, Quant, and Wise, in this report, you will learn from industry leaders about the events and trends defining global payments in 2023 and beyond. The report includes insights from BNY Mellon, Cecabank, Deutsche Bank, HSBC, ING, Nationwide Building Society, NatWest, SEBA Bank, and Société Générale.

19 June 2023 1467 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

Future of Report

The Future of Digital Banking in Europe 2023

A Money20/20 Europe Special Edition Growth across the European fintech industry is fluctuating, and it is becoming increasingly evident that the record levels of funding and deals seen in 2021 will not happen again any time soon. As revealed by CB Insights, funding rose by a staggering 168% to reach $131.5 billion in 2021 from $49 billion in 2020 after fintech firms the likes of Klarna and Stripe achieving monumental valuations. However, 2022 saw rising interest rates, a cost-ofliving crisis and continued geopolitical instability which led to trillions in valuation being erased from public markets. Europe’s fintech sector remains at the core of the financial services industry, rather than at the fringes as it was once before. According to McKinsey, in each of the seven largest European economies measured by GDP – France, Germany, Italy, the Netherlands, Spain, Switzerland and the UK – at least one fintech firm ranks among the top five banking institutions. This Finextra report, a Special Edition for Money 20/20 Europe, collates interviews with a range of leading players across the financial services and fintech industries operating across Europe and explores topics that will be covered at the event in Amsterdam. It features key insights from Accenture, ClearScore, Deutsche Bank, ING, Nium, Plum, Ripple, Société Générale, Tink, Visa, and Zopa that will discuss how digital banking across the continent will evolve.

05 June 2023 1006 downloads

Report

The Future of Regulation, Risk Management, and Compliance 2023

How to prepare for the looming regulatory storm. Financial institutions are on course to find themselves caught in a perfect storm of risk and compliance-based challenges during 2023, as market-led trends, technology advancement, and regulatory shifts continue to dominate the headlines. The constant threat of disruption resulting from emerging technologies, business model transformations, and ecosystem changes will force executives to make significant and strategic choices to drive organisational success. Only careful preparation and a sharp eye to the future will be enough for firms to pass through the eye and on to calmer waters. Download your copy of this Finextra report, which compiles expert insights from a range of firms, including: Linklaters, Mazars, Valcon, Pinsent Masons, Fladgate, Saifr, Encompass, ComplyAdvantage, Quantexa, Onfido, Duco, and Santander, to gain a deeper understanding of these pressures bearing down on financial institutions across the industry.

21 April 2023 988 downloads

Report

Embracing Technology to shape the Future of Digital Banking

There has been a tidal wave of transformation - the pace of it is accelerating, technology is proliferating, and customer behaviour and expectation are advancing all the time; the banking industry is in flux and it is a challenging time but also an exciting one. To successfully navigate this evolving landscape, financial institutions must stay attuned to the changing needs and preferences of customers and embrace emerging technologies to adapt and rethink their existing business models. There are a few business models that have been developed and discussed over the years. Open banking has ushered in new platforms as well, acting as aggregators of banking services and connecting different players in the ecosystem. Given the trajectory in the last couple of years, with digitalisation efforts in banking services having been accelerated by the pandemic, there will be yet more banking models to form. The digital experience can be much developed; new platforms, marketplaces and ecosystems will undoubtedly be created, and payment methods, which ultimately underpin financial services and commerce, are likely to undergo further evolution too. Download your copy of this Finextra whitepaper, produced in association with Worldline, which explores the current landscape of models and what factors may influence further evolution.

20 April 2023 602 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

Impact Study

How banks can expand the omnichannel for virtual signing experiences

The global pandemic presented a challenge to the way many products and services were offered by banks, and now that we are on the other side of Covid-19, the impact is clear. Covid has permanently altered the expectations and possibilities of how banks conduct their business. According to finder.com, in 2023 24% of people in Britain have a digital-only bank account, compared with only 9% in 2019. This trend looks set to continue with 5.3 million Britons intending to open a digital only bank account in 2023. To achieve success given these dynamics, financial institutions must balance the convenience of the virtual world with the personal touch of th real world. Customers expect their financial service provider to offer the same digital experience they are receiving in other areas of their life. For instance, the proliferation of existing tools that improve digital experiences such as Zoom, Microsoft Teams, or AI-based chatbots, are now proven and effective enablers of digital innovation. However, automation is no longer enough. Today, security and a human connection is a must-have, particularly because remote working is now normalised, but the requirement for collaboration persists. In a world where we are making more financial decisions on digital platforms, there must be a process in place where meetings can be tracked and signatures can be ensured virtually. This Finextra impact study, produced in association with OneSpan, explores how financial services providers can balance security, compliance, and remote interactivity with the need for a more human centric digital experience.

31 March 2023 189 downloads

Report

Mainframe Modernisation, the Digital Endgame

Mainframes have been in existence since the 1950s and a decade later, were partly responsible for putting man on the moon. It was one small step for computing, and one giant leap for organisations. Since then, mainframes have been the central nervous system that has underpinned many large organisations and as a result, have been involved in processing large volumes of transactions. However, the financial services industry is currently at a tipping point where mainframes need to be modernised and more cost effective to meet the needs of today’s customers. This is where the cloud comes in. Mainframe modernisation has become an essential, but ever evolving topic of discussion within all financial institutions embarking on a cloud journey or executing on the cloud. At the start of the century, banks were questioning the importance of the cloud and how to establish an adoption strategy around the technology. When Covid-19 hit, financial institutions needed to look beyond long-term success to enable progress at a faster, better, and cheaper rate. At a recent Finextra webinar, ‘Mainframe modernisation: Overcoming hurdles to achieve agility’, in association with Accenture and Amazon Web Services (AWS), the panel explored how ultimately, mainframe modernisation is now an element of risk management. This event report outlines the findings from that session.

13 March 2023 321 downloads

Report

Sustainable Finance Live - Enabling positive change through innovation and collaboration

A Visual Record from the Sustainable Finance Live Conference and Hackathon 2022 Sustainable Finance Live returned for its fifth edition - and second in-person event - at Events@no6 in London on 29th November 2022. Richard Peers, sustainable finance visionary, contributing editor at Finextra, and founder of Responsible Risk took to the stage to lead a programme of content, workshops, and experiments designed to create actionable ESG strategies and build the ecosystem of partnerships, which will turn strategy into reality. The event saw over 100 attendees lean in, lean back, and learn by doing during the interactive parts of the day. Leaders in the sustainable finance industry discussed the problem statements and solutions that are defining the sector today. The main themes of the conference were data, risk, and financial instruments. Peers explored risk management through the lens of a self-driving car which can use its technology and sensors to move into either the fast or slow lane to avoid an upcoming crash that we cannot yet see. He said: "The finance industry is still looking in the rear-view mirror, basing our risk decisions based on smaller historical analysis, which still of course has huge purpose. "What we want to talk about is how can we actually bring all of the new dynamics in play, so that we can see the slow-motion car crash of climate change, biodiversity loss. "We can think about what that means to our portfolios, and we can actually make the appropriate decisions." Download a Visual Record of the event below to find out more.

31 January 2023 398 downloads

Report

UK Open Banking API Performance 2021-2022

The UK continues to be at the forefront of the global Open Banking revolution thanks to the proactive attitude of the regulators. These regulators helped create an Open Banking ecosystem that encourages and facilitates smaller banks and new entries, including fintechs and neobanks, to participate in the Open Banking market. As the most advanced Open Banking market in the world, the UK provides an example of best practices in the implementation of API-based Open Banking. We studied the performance of the large CMA9 UK banks, traditional High Street banks, credit card providers and building societies, and new entrant banks (neobanks). The endpoints were provided by the banks and measured using our patented APImetrics quality scoring system, CASC (Cloud API Service Consistency). Download your copy of this research report by APImetrics, which is generated from real API calls made using the FAPI compliant consent process with the partnership of tomato pay, a leading open banking provider in the UK. All calls were made between July 1, 2021 and June 30, 2022.

26 October 2022 422 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.

25 October 2022 464 downloads

Report

The Future of Digital Banking in North America 2023

A Money20/20 USA Special Edition 2022 in North America saw a continuation of economic recovery from the Covid-19 pandemic, fuelled by the rapid rollout of vaccinations particularly across the US and Canada. Although the US was the fastest of the G7 economies to recover from the crisis, an enduring impact of the Russia-Ukraine conflict resulted in high inflation and the subsequent cost-of-living crisis is set to continue into 2023. These macrotrends are a catalyst for digital transformation within the financial services industry as banks attempt to grapple with new payments trends, the evolution of digital identity and innovative uses of data to enhance customer experience across retail, wholesale and commercial relationships. In 2022, digital banking for the consumer is far more advanced than the products and services that are available for merchants or large corporations. In 2023, open banking must be utilised to remedy this issue. For the retail customer, although digital methods of managing money are now part and parcel of day-to-day life, the pandemic encouraged, or in some cases, forced people who may have been uncomfortable with using technology to bank on their mobile phones or desktop computers. This unfamiliarity with technology has led to consumers being in environments in which they are vulnerable and at increased risk of fraud and other types of financial crime. In 2023, banks will need to ascertain what they need to adapt and strengthen in fraud prevention while also managing new regulatory and compliance requirements. Further, the areas of onboarding that need to be automated must also be considered as part of a holistic digital strategy, striking the balance between innovation and digital noise. For instance, Web3, the metaverse, digital assets and tokenisation are no longer the monopoly of global tech giants, but are increasingly being shaped by financial players who are having their relevance threatened. This Finextra report, which features expert views from ebankIT, EPAM Systems, Infosys Finacle, and Trustly, will explore topics that impact the digital banking sector and those that will be covered at Money20/20 USA 2022 in Las Vegas. Additionally, key insights from Wells Fargo, Plaid, Green Dot, Silicon Valley Bank, FXC Intelligence, Synapse, Navy Federal Credit Union, Branch, Citi, and the New York State Department of Financial Services will cover how organisations across North America are preparing for imminent change across the digital banking landscape.

21 October 2022 1154 downloads

Report

Banking as a Service: Predictions for 2023

Cloud strategies are changing After the financial crisis of 2008, traditional lenders experienced a drop in revenue and new players successfully gained traction after offering products that had been in high demand and long expected from existing banks. This trend advanced after regulators across the world endorsed open banking initiatives, data requirements were standardised and in turn, financial players gradually opened up to technology. With the transparency that open banking provides, banks were encouraged to offer digital services, fair pricing, and increased security. Further, they are forced to utilise application programming interfaces (APIs) for seamless information exchange between partners. This trend has since evolved: with open finance, APIs can facilitate the interchange of data, products and services in an attempt to improve customer experience, offer greater choice, and control over their finances. In 2020, the financial services industry - particularly banks - implemented emerging technologies to accelerate innovation across the infrastructure of core functions in real-time, and underlying trends that were previously being considered were utilised in weeks, rather than months or years. The coronavirus has led to relationships with consumers being reimagined and relationships with ecosystem partners being redefined; this also resulted in products and services being reconsidered. Technology providers are no longer just technology vendors: startups, scaleups and even unicorns are now viable collaborators for financial institutions. In this post-lockdown era, banks are tapping into this partnership model to enhance their digital transformation to keep pace with customer requirements and avoid being disrupted by newer, more technology-savvy, entrants. When banks work with technology companies, APIs can be built with a number of microservices that can communicate and connect with these third parties, building upon open finance solutions on cloud-based platforms. This allows financial institutions to scale on demand, pay for only what is consumed, and expand serverless architectures. Financial institutions are no longer considering the cloud – the cloud is necessary for how finance works today. An emerging yet burgeoning trend that will continue to evolve and grow in 2023 – banking as a service (BaaS) - offers a new route to market for banks and empowers them to attract new, niche customers by leveraging the cloud. BaaS also allows non-financial companies to push out financial products where and when they are needed, direct to their customers with minimal investment and with the benefit of cloud-based, pay-as-you-go pricing. This Finextra impact study, produced in association with i-exceed, explores how financial institutions and technology providers can collaborate to deploy mobile and web-based banking solutions at a faster rate.

20 October 2022 1001 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