Latest reports and research: Finextra Research

Event Report

Sustainable Finance Live – Natural Capital Finance

A Record from the Sustainable Finance Live Conference and Hackathon 2024 On 8 October 2024, Finextra Research and ResponsibleRisk held the annual Sustainable Finance Live hybrid conference and hackathon, in partnership with NayaOne. The conference took place at Events@ No6 in London, and started off with a welcome from founder of ResponsibleRisk and contributing editor for Finextra, Richard Peers. Peers opened with an introduction outlining the themes and objectives of this year’s event: to understand natural capital risk, pricing, and trade. The focus areas of the conference were natural capital, agriculture, supply chains, as well as regulation and reporting. The sessions also highlighted highlighting new technologies that are being used to collect nature-related data such as Earth observation and satellite reporting. Richard Peers, contributing editor at Finextra and founder of ResponsibleRisk, moderated the conference: “What we wanted to do is to put on an event aimed at explaining the landscape of a natural capital transaction, with the associated data providers identified along the way. Ending the process in an asset management trading platform, taking into consideration all the steps that a regulated entity has to undertake, to prove to the financial industry that this can be an asset class, that is as tradable as any other.” Download a Visual Record of the event below to discover key themes of the event’s panels, keynotes, and hackathon. We cover: Natural capital trading from field to trade; How nature financing can be achieved; The role of data, economic profit, and policy for natural capital; How to build a sustainable ecosystem using natural value; Visions and results from the hackathon; And more.

28 November 2024 8 downloads

Future of Report

The Future of AI in Financial Services 2025

A special edition for NextGen:AI 2024 Artificial intelligence (AI) has the ability to revolutionise the financial industry making id more efficient, enhance customer experiences, reduce costs, and create new products and services. AI is transforming how institutions manage risk, intercept fraud or crimes, personalise customer experiences, improve efficiencies across their operations, make investment decisions, and many more use cases which are still being developed. Some industries have already started to embrace AI and banks can be included in that, but financial services still has room to learn from the developments of other ecosystems. At the same time, the innovation in AI is now being driven by legislation. The EU AI Act came into effect in 2024 and is the most concrete piece of legislation, but other jurisdictions are developing their own and will continue to watch how the EU progresses. With the new possibilities AI is opening for financial services, there are new risks. Biases, model issues, cyber security, and compliance issues are among some of the hurdles which AI presents to financial institutions. Adding to this are the serious sustainability issues which AI can create for financial institutions planning to use it long term. This report has been written in collaboration with Box, Innovate Finance, and RedCompass Labs, and contributions from Globant, the United Kingdom House of Lords, ING, NatWest Group, Sumsub, and Smarsh. It explores: How financial services can embrace AI; Some of the key emerging AI use cases; Global legislative outlook for AI; AI sustainability and energy efficiency; How AI can transform financial services metadata extraction.

25 November 2024 60 downloads

Impact Study

2024 Fraud Trends in Banking, Insurance, and Beyond

How generative AI is boosting fraud protection in an increasingly complex environment. As technology progresses, so do the capabilities of institutions to secure data and systems. Over 2024, the fraud landscape has been complex, and organisations must push the boundaries of innovation while maintaining a high security bar as the availability and democratisation of AI increases as we're going into 2025. The tidal wave of incoming regulation in the financial sector is an aspect that will help banking and insurance companies to safeguard their customers and data in the best way possible. Yet regulation alone does not address fraud – it’s up to individual organisations to leverage the potential of technology, and review their solutions, processes, and thus ensure compliance and safety. As fraud and regulation increase in the space, technology is one of the key factors that will help banks and insurance companies to address these increased fraud risks. Generative AI enables organisations to deliver hyper-personalised customer experiences, and combining these capabilities with carrier network insights can not only help them significantly reduce authentication fraud, but also ensure regulatory compliance. This impact study, produced in association with AWS and Vonage, examines the current fraud landscape across financial services, banking, and insurance, highlighting how generative AI and network APIs can help prevent fraud while enhancing the customer experience. Explore: Fraud trends in 2024 The impact of regulation Why data is the new gold How organisations can innovate with generative AI Best practices

31 October 2024 264 downloads

Event Report

Managing Fraud Risks with Synthetic Data

A Practical Approach for Businesses Services Industry The financial services sector is in a constant state of evolution, and so too are the challenges it faces, particularly in the realm of financial crime. This mounting issue has become a significant concern for institutions, customers and regulators alike. The key to addressing this lies in our approach to data - its quality, management, and applications. Harnessing the power of synthetic data and AI tools has become a pivotal factor in business transformation, particularly in addressing the issue of financial crime. The ability to streamline operations and enhance efficiency is a major challenge businesses face, but the introduction of synthetic data offers promising solutions. Synthetic data provides a comprehensive view of all types of crime, a feature that is crucial for global banks often grappling with segmented fraud activity. This broader perspective enhances the institutions’ capability to effectively fight financial crime. This report summarises the discussion had during a Finextra webinar, hosted in association with Red Hat, and explores: The role of synthetic data in combatting financial crime Implications of new regulation How synthetic data enhances crime detection A practical apprach for managing fraud risk

22 October 2024 222 downloads

Future of Report

The Future of Payments 2025 – Digital, Instant, Profitable?

A Sibos Special Edition The global payments landscape is in a period of rapid transition, with technologies and regulations making a serious impact. Yet looking to the future of the payments industry, how can we ensure that it is digital, instant, and profitable? While consumer behaviours continue to evolve in tandem with this. Artificial intelligence (AI), tokenised assets, Central Bank Digital Currencies (CBDC), Blockchain, and even more pioneering technologies are shaking up the payments systems all in their own way. Adding to this atmosphere of flux, is an developing regulatory framework which promises to alter this situation further. Regulators are facing an uphill battle attempting to legislate on emerging technologies while keeping consumers safe, and providing the best outcome for payment service providers (PSPs). As we move towards milestones like open finance and more rapid payments, there is a chance the payment ecosystem could look quite different within the next few years. Under these growing pressures, global payments organisations will need to ensure that they are able to bend and adapt to the circumstance, or risk snapping. Never has it been more important for PSPs to collaborate with each other, and regulators, to ensure the best outcomes. This Sibos 2024 special edition report, was produced with contributions from Accenture, Deloitte, EBA CLEARING, Finastra, FIS Global, Investec, J.P. Morgan, Oesterreichische Nationalbank, PPI AG, Swift, and Wise. It explores: The evolution of instant payments in 2025; The modernisation correspondent banking and cross border payments; Preparing the upcoming EU payments legislation; The key to successful digitalisation; The technology innovations reshaping the payments sector.

17 October 2024 917 downloads

Future of Report

The Future of Embedded Finance in Africa 2025

Embedded finance is changing the payment landscape in Africa. The question now is: what will it take for embedded finance to truly scale across Africa? The global embedded finance market is set to grow beyond $228 billion by 2028 according to Juniper Research. As this market matures and consumer confidence in the technology grows, this will likely prove to be a significant chunk of global financial services. In Africa, this emerging trend has the potential to unlock new economic opportunities. As a less mature market, it is not as hindered by legacy payments systems, making it ripe for payment innovation from embedded finance. It has the potential to reshape the continent’s current payments landscape, broaden innovation opportunities, and drive financial inclusion. As a market Africa is very adaptable to different technologies, and embracing of newer, more agile services. A lot of the population to the majority of their banking through their mobile phones, making embedded finance fit seamlessly into financial worlds of the populace. Yet there are many factors which will alter and develop the ability for embedded finance to take hold. This Finextra report, sponsored by Kora, received contributions from Binance, Indelible Inc., Mojaloop Foundation, and Nikulipe. It explores: Making embedded cross-border payments work in Africa; Unlocking the opportunities of embedded e-commerce in the African market; Embedded finance: Encouraging African financial inclusion; Why personalisation in embedded finance is the next step for African fintech; Regulating Africa to encourage embedded finance innovation.

10 October 2024 267 downloads

Impact Study

Adding GenAI To Your Fraud Prevention Strategy

We explore the numerous benefits of generative AI for fighting fraud. In an instant payment, cross-border world, fraud is more nefarious and prevalent than ever. Recent research shows that worldwide, APP (Authorised Push Payment) fraud now represents 75% of all digital banking fraud on a dollar-value basis. By 2026, losses are expected to reach $5.25 billion – revealing that APP fraud is one of the biggest threats to financial institutions (FIs) globally. The next pre-emptive step in the fight against fraud is generative AI (GenAI), which uses Large Language Models (LLMs) to generate new content like text, audio, video and even new computer code. While GenAI is still in the fledgling stages of adoption within fraud prevention, it will soon become a true differentiator. But how exactly are scammers deploying AI to their advantage? What are the best ways to incorporate GenAI into a fraud prevention strategy? How should consumer privacy be managed? This impact study answers these questions and casts an eye over the current fraud landscape, the regulatory implications, and the vital role of innovation. This Finextra impact study, produced in association with Outseer, explores: The evolution of scams; The role of AI; Technology and the impact of generative AI; How to embed AI in the best way possible; Addressing regulatory challenges and concerns; And more.

27 September 2024 400 downloads

Survey

The Global Fight Against Trade-Based Financial Crime

Broken inside, broken outside: Uncovering the internal weaknesses and external pressures fuelling a $1.6 trillion challenge. Trade-Based Financial Crime (TBFC) is a global issue, draining $1.6 trillion annually from economies—funds that could otherwise fuel development, build infrastructure, and stabilise financial systems. Instead, these resources are diverted into criminal networks that operate across borders, exploiting the very institutions meant to protect global finance. This is a crisis that goes beyond numbers; it strikes at the core of trust and stability in the financial world. This global survey, conducted in the summer of 2024, revealed the alarming extent to which financial institutions remain unprepared in the face of the growing threat of TBFC and sheds light on the significant challenges, technology gaps, and fragmented risk management strategies that enable significant financial crime. Input from leaders at ING and ITFA reinforces the critical role of technology in combating TBFC, while also acknowledging the operational challenges that remain. Implementing AI-driven solutions at scale is proving to be a significant obstacle for many institutions, with the timeline for action growing ever tighter. Download this Finextra survey, produced in association with Eastnets, to explore: Why TBFC is a growing global crisis What internal roadblocks institutions are facing An investigation into the external challenges of combatting TBFC Recommendations for what risk leaders should do next And more Click here to join us for the Finextra webinar, Global Trade Based Financial Crime: Where Trade and Payments Meet, and hear from our panel of industry experts discuss the finding from this survey and the current state of trade-based financial crime globally.

25 September 2024 288 downloads

Impact Study

Mastering the Transition to ISO 20022

Strategies for Compliance and Automated Testing in Financial Services With a regulatory storm incoming, the need for testing solutions – whether they be generic or tailored – is greater than ever before. As the financial services industry undergoes a vast amount change, particularly around the introduction of new rails on the ISO 20022 framework, these tests are proving vital for international banks and other institutions in the chain. Yet, for this sector change is not a binary phase; it is almost always underway. To tackle this challenge in a sustainable way, automation is key – giving institutions the confidence to weather the storm of regulation with ease. With the ISO 20022 standard now a prerequisite, organisations must convince their business leaders that the migration mandated for November is not just an IT project – it is fundamental to company-wide strategy. This impact study, produced in association with Unifits and featuring expert commentary from BearingPoint and Accenture, explores how institutions can master the transition to ISO 20022 and streamline compliance through automated testing. Discover: The impact and evolution of testing The benefits of testing automation The strategic role of technology and compliance Trends to watch: New rails and regulations Real-world case studies And more.

16 September 2024 484 downloads

White Paper

Beyond Tomorrow In The Capital Markets

Technology has long been transforming the capital markets industry, but the tides are changing for what is considered success. Now more than ever, firms need to prioritise operational resilience. Technological advances are indisputably reshaping how firms in the capital markets operate, however, as the reliance on technology grows, so does the impact of glitches and outages when they occur. Take the CrowdStrike global outage, for example, which caused an estimated $1.15BN and $140M in financial losses for the banking and financial sectors respectively. The consecutive outages expose the fragility of technical infrastructure and underscore a need for better operational resilience across the capital markets. It also reiterates the importance of preparing for the EU’s Digital Operational Resilience Act (DORA), implementing uniform operational resilience rules for financial entities throughout Europe, and its equivalents elsewhere. This Finextra whitepaper, produced in association with CJC, explores: The challenges in the capital markets industry; How institutions can address these challenges; Ensuring future resilience by bridging the skills gap; Real-world case studies; And more.

09 September 2024 205 downloads

Impact Study

Microservices Architecture: Future-Proofing Payments Technology

It is high time for banks to move away from legacy thinking and embrace modernisation to remain competitive in the industry. Financial institutions have long been threatened by innovative, tech-savvy fintech firms that do not have to maintain decades-old back-office systems. Core banking systems within banks have evolved, but with additional pressure from incoming regulation and subsequent reporting, progression and modernisation has not kept pace with industry developments. In the US alone, the real-time payments market is expected to grow at a compound annual growth rate of 31% until 2030. An institution’s success in scaling their payment processing in response to this shift will rest heavily on how their systems are set up. Cloud-native payments processing is the most viable option to keep pace with innovation demand and competition; enabling banks to build upon flexibility, at low cost and risk. These enablers also make cloud infrastructure – both public and private – attractive for banks that have struggled to streamline, maintain and upgrade their legacy infrastructures. This Finextra research paper, produced in association with Diebold Nixdorf, explores the opportunities of microservices architecture. It discusses: Then & Now: Monolithic vs. microservices architecture Overcoming microservice challenges The benefits of a micro-approach Real-world examples and cases studies And more. Click here to join the Finextra webinar, hosted in association with Diebold Nixdorf, to watch as our panel of iindustry experts explore the benefits of microservices architecture, and what needs to be done to ensure migrations are streamlined.

27 August 2024 408 downloads

White Paper

APIs, Automation, and AI

An Arsenal to Defend Against Card Transaction Fraud Fraudsters are no longer individuals who are looking to infiltrate gaps or weaknesses in how our businesses are set up. They are expert technologists and strategists that steal customer data, take over accounts and break into tough security measures. Between 2023 and 2027, merchants are expected to lose a total of $343 billion to online payment fraud, driving home the point that the time is now for technology to be leveraged to reduce card transaction fraud, which is growing in numbers and complexity. APIs, automation, and AI are all integral to an effective fraud mitigation strategy in 2024. This Finextra whitepaper, produced in association with Mastercard, discusses how these technologies – if used in the right way – can support financial institutions evolve to emerging threats with increased speed and accuracy.

12 August 2024 347 downloads

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.

08 July 2024 631 downloads

Survey

Payments Modernisation: The Big Survey 2024

Welcome to the fourth edition of The Big Survey. Our annual report, surveying 350 senior bankers across the globe, offers a unique vantage point on the ever-evolving landscape of payments modernisation. Over the years, we’ve uncovered fresh developments and enduring challenges alike, painting a detailed picture of the industry’s trajectory. As we navigate 2024, the financial services sector is in the midst of profound transformation. Our latest insights highlight the critical need to modernise payment systems swiftly and effectively, driven by rising customer expectations and stringent regulatory demands. Download our 2024 survey, produced in association with Volante, to learn about: The current state of capabilities Why payments architecture is more flexible than ever before Financial institutions’ budgets and spending priorities The global drive towards real-time and cross-border And much more.

13 June 2024 1152 downloads

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 969 downloads