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

Future of Report

The Future of Digital Banking in Europe 2024

A Money20/20 Special Edition. In 2023, fintech investment in the EMEA region dropped to $24.5 billion, down from $49.6 billion in 2022 – a seven year low. Macroeconomic and global political conditions are creating challenges for growth, with upcoming general elections around the world adding to the uncertainties in financial ecosystems. Despite these challenges, the outlook for European digital banking remains positive. The region continues to lead in innovation within the financial sector. This Finextra report, a Special Edition for Money20/20 Europe, features interviews with key players in the European financial services and fintech industries. It includes insights from Vodeno, EY, J.P. Morgan, Swift, Tink, and TrueLayer, and explores the following topics that will be addressed in Amsterdam: Hyper-personalisation: Moving towards super apps Embedded payments driving the Banking-as-a-Service revolution Variable recurring payments: The next step in European open banking Is Europe ready for MiCA? From Web1 to Web3, or Markets1 to Markets3 How European fintech is facing macro challenges

04 June 2024 914 downloads

Future of Report

The Future of UK Fintech - 2015-2035

An IFGS Special Edition UK Fintech Week 2024 With UK Fintech Week's flagship event - Innovate Finance Global Summit (IFGS) - returning for its 10th anniversary, Finextra and Innovate Finance have partnered to publish this report, which acts as your go-to-guide to everything you need to know about financial services and technology in the UK. ‘The Future of UK Fintech: 2015 – 2035: An IFGS Special Edition’ includes commentary from the brightest and best across the fintech ecosystem, discussing and debating the crucial issues facing the sector now and in years to come. This includes key insights from industry experts from Cogo, EY, Konsentus, Marqeta, Standard Chartered Ventures, and Zopa Bank. Scoping out the next decade to come, this report explores the agenda topics below and more: The Next Decade of FS and Innovation: What Lies Ahead Fintech Beyond FS Borders: How Fintech is Impacting other Industries and Sectors UK and the World: Keeping our Crown while Learning from Others Transformative Technologies: Opportunities and Risks Users of Tomorrow: The Next Generation of Consumers The Shifting Ecosystem: Who Will Lead?

15 April 2024 645 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

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

Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies

A Finextra Research Impact Study in Association with Global Payments and Amazon Web Services (AWS). Consumer expectations, behaviour and payment preferences are and will continue to evolve at an accelerated rate. As a result, payments processors and issuing banks must ensure they are technology-enabled and software-driven so that the financial products and services they provide are future-proofed, ready for today and tomorrow. In an attempt to keep pace with competitors, banks must recognise that collaboration between payment players and cloud service providers will help drive frictionless, more secure digital experiences for consumers. This is of paramount importance in a world where resilient commerce through contactless interactions – at scale – is key. However, some institutions are still offering traditional premise-bound services and aren’t taking advantage of the innovative technologies available in market today. In order to remain relevant, these organisations must be flexible, accelerate speed to market and provide best-in-class experiences for their customers. According to a McKinsey survey, banks that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversation rates and growth by 20%. From extending their footprint into new products, services and markets, to innovating and creating next generation, digital focused banking solutions, the goal for financial institutions is to meet the demands of the connected, digital world and keep pace with ever-changing consumers’ preferences. Against a backdrop of new payments startups, legacy players don’t have the benefit of starting from scratch but do have the advantage of a large customer base. While cloud technology can support digital transformation, financial institutions, retailers and new market entrants will also realise the benefits of a collaboration between the likes of Global Payments and AWS and how it will lead to more secure, reliable and innovative solutions for the payments industry at scale. Download your copy of the Impact Study below to learn more.

07 January 2021 559 downloads

Report

The Future of ESGTech 2020

Finding value in the data web of sustainable finance. While environmental, social and corporate governance considerations have always been a matter of importance for financial institutions, there is now greater scrutiny than ever of the ESG impact of assets, investments and lending. The adoption of United Nations’ 17 Sustainable Development Goals (SDGs) in 2015 formed a framework for sustainability in the global economy, setting out aims to reduce poverty and hunger, promote good health, wellbeing and education and protect biodiversity and the climate. SDGs do however present complexities given their wide scope and the difficulties in addressing them in equal measure. Additionally, new and different public pressures can develop such that the priorities of businesses and economies are forced to pivot as the global backdrop does. It has been commonplace in recent years, for example, for the World Health Organisation to label climate change the greatest risk to human health around the world. This now seems a debatable summation given the events of 2020, and it is likely that the threat of pandemics and poor health will receive greater attention in the years ahead. The benefits for financial institutions of undertaking ESG-driven activity are well understood but remain clouded in uncertainty due to unknown risk and reward. They, therefore, need practical solutions to work to sustainable goals that can help to bring returns while also delivering positive environmental and social impact. Initiatives that enable this are emerging in the worlds of innovation and technology that harness the data that financial institutions have at their disposal to deliver additional value for clients and stay relevant in a constantly evolving space. However, there remain many unanswered questions about the standardisation of data to make it digestible for firms across the industry, how the user experience of reported data can be transformed to improve knowledge of risks and opportunities and what role technologies such as AI and blockchain can play. This report sets out to answer those questions. Finextra Research has combined opinions and commentary from sustainability experts at Citi, Standard Chartered, BNY Mellon, Moody’s, HSBC, Latham & Watkins, Tandem Bank, and BBVA with original insights and analysis to explore the tools and processes that can assist organisations in developing their ESG offering and driving growth through meeting sustainable goals in the years ahead. Download your copy of the report below now to find out more.

21 December 2020 425 downloads

Report

Managing Compliance and Growth

For banks large and small there is no question about the sheer volume of transformation pressure currently at play. Regulatory changes on the increase, various migration deadlines to implement amid the general shift to real time means that mere survival in itself can seem like a win. More is required of organisations who want to differentiate and compete for and retain the customer’s attention. When risk awareness plays a crucial role how can banks start to carve a safe and secure route to innovation at a speed which meets market demand for new and intuitive services? For smaller and newer organisations, arguably it is easier when they don’t have legacy constraints and are more attuned to the benefits and possibilities of emerging technologies. But as they strive to diversify and grow their volumes, they are often blindsided by the associated risk and indeed the threat of suffocating a start-up culture. Becoming consumed by the here and now and not being able to see the woods for the trees is an all-too-familiar theme for many medium-sized banks. Being able to establish and refine their own agile way of working so they can learn fast and grow fast is key. But when one size does not fit all in terms of scaling projects, it becomes very difficult to take the reins on their own unique journey of growth. This research paper by Finextra, produced in association with Finastra, is based on several interviews with small and medium-sized banks, garnering their perspectives and experiences in their efforts to grow and scale while managing compliance and all that goes with it. Download your copy of the Finextra industry sentiment report to learn more.

14 December 2020 357 downloads

Report

Sustainable Finance Live - Investment and Asset Management ESG Solutions

A Visual Record from the Sustainable Finance Live workshops. In June 2020, Finextra Research welcomed industry experts to Sustainable Finance Live, the first virtual, interactive workshop to discuss how financial services firms and technology companies can achieve the UN’s Sustainable Development Goals (SDGs) by 2030. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event targeted the subsector of investment and asset management and explored specific challenges and opportunities, following a lean back, lean in and learn model. The workshop defined what investors require in order to track and securitise with confidence and what asset managers need to build portfolios that institutional investors will select. Diving deep into the practical challenges of investment and asset management, the sessions considered data access and reporting, with speakers providing advice on how to embrace sustainable finance. With a top down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: The investment gap in new technologies and models Information acquisition through third party suppliers to help the risk function Incentivisation schemes to promote better sustainability norms The role of technology in validating ESG activities Download the full report below to find out more.

27 July 2020 271 downloads

Report

Onboarding next steps for new and established Digital Banks

Customers want the onboarding and account opening process to be as easy as possible. A certain amount of friction is to be expected when it comes to identity and security checks, reassuring them that their prospective financial service provider takes security and their data seriously. Signing up for a new financial services product shouldn’t be as simple as providing a username and email address. But nor should it always require reams of paperwork, branch visits and forms signed in triplicate. In the past five years, banks of all shapes and sizes have invested significantly in streamlining their processes so that the regulatory checks such as Know Your Customer (KYC) and Anti Money Laundering (AML) can be met while minimising, where possible, the number of postal and in-branch interactions required for establishing identity and product suitability. Depending on the market segment and product, this process can be done 100% online and ideally via a mobile device – a channel that now dominates for even traditional banks with established, older customer bases. Digital onboarding is just the start, however. Banks, both new and established, are looking to improve the integration of identity at onboarding with ongoing authentication credentials, and adopt a risk-based approach to security throughout the customer lifecycle that can adjust the balance between protection and convenience for customers. Download the full white paper below to find out more.

14 July 2020 838 downloads

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

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