Latest Financial Crime reports and research: Finextra Research

Report

The Future of Identity 2020

Technology, Security and Regulation Driving Trends of Tomorrow. Financial institutions must balance speed with security at all points of connection and communication with the customer, but while the incumbent player is known for laboured onboarding, fintech challengers are coming to the fore with slicker processes, more so now than ever before as a result of Covid-19. Identity is integral to mature digital transformation and fulfilling customer needs, especially when mandates such as the General Data Protection Regulation (GDPR) and the Second Payment Services Directive (PSD2) are too limited in their coverage and arguably introduce friction, as evidenced by Strong Customer Authentication (SCA) and Two-Factor-Authentication (2FA). Increased information exchange has also posed the pertinent question: who owns this data, when banks continue to be the trusted providers of identity and history dictates that ID solutions need a commercial edge? In addition to this, do we need to create a truly digital borderless economy? However, we are not at that stage and with verification being the first point of contact for the customer, abandonment rates are up by a staggering 40%. Banks are further along in the digitisation of infrastructure but are slow in ensuring that the same experience is provided across mobile, tablets and desktop computers. Some financial institutions are tackling this with the use of point solutions such as biometrics and analytics to maintain behavioural records, examining how customers hold their mouse, keystrokes and conducting liveness checks. In order to combat sophisticated ID scams, banks must learn how to recognise behaviour. Account takeover fraud and synthetic fraud are both growing abuses of identity and social media connectivity is increasing the number of access points for bad actors. However, banks believe that this problem can be resolved by educating customers about the risks involved with data breaches. What is the right formula? A ‘KYD’ – Know Your Device – approach. Infrastructure must be sophisticated, leveraging artificial intelligence and machine learning; the days of false positives are over. Download your copy of the report below now to find out more.

17 November 2020 262 downloads

Report

Can Strong Customer Authentication open the door to new end user experiences?

Much has been discussed about the European payments industry's mandated shift to Strong Customer Authentication (SCA). The technical demands, constraints and consequences for the various parties involved in the chain, from the issuers and banks large and small, to the end user, to merchants, are far-reaching. The challenge of implementing SCA alongside myriad other projects such as digital transformation journeys, migration and compliance deadlines and generally trying to re-hone businesses in a time of great flux, are reflected in the extension of the deadline for SCA. Yet the user experience is undoubtedly the biggest challenge around implementing SCA. What the industry needs is a more compelling perspective, an incentive beyond compliance with the promise of new customer journeys and services that may emerge from the shift to SCA. Download your copy of this Finextra white paper, produced in association with Okay, to learn more.

30 October 2020 565 downloads

Report

How to Prevent Payments Fraud amid Global Disruption

Economists predict the disruption caused by the coronavirus pandemic will be felt well into 2021. Banks have been left vulnerable and have to contend with fraudsters who are using Covid-19 as an opportunity to commit financial crime, exploiting consumer fear and the increase in digital payments. Fraud losses need to be anticipated and prevented as banks move from the lockdown to the recovery phase. What must be done to ensure the secure use of alternative payment options? In the age of open banking and real-time payments, funds can be transferred to fraudsters’ accounts immediately and the victim does not notice suspicious movements until it is too late. It is evident that with faster payments methods, the benefits for consumers far outweigh the disadvantages, but hackers will continue to exploit this area. Fraud analysts within a bank must pivot and adapt to working in a new environment to ensure that teams integrate efficiently and decrease human error through a lack of physical communication. Data is a vital tool in a bank’s armoury and must be considered an asset. AI and machine learning can also play a part in fraud and financial crime prevention, consuming disparate unstructured data and creating structured insight and conclusions. Coupled with traditional fraud techniques, banks need to pivot their payments fraud strategy to a tech-driven approach. This research paper by Finextra, in partnership with Feedzai, gathers the views of several experts from Bank of the West, Barclaycard Payments, HSBC, ING, Nationwide and Nordea on how to prevent payments fraud during a pandemic. Download the full report below to find out more.

16 July 2020 635 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

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 903 downloads

Report

Should banks be the guardians of digital identity?

The single, interoperable digital identity will be a dominant technology trend over the next decade, within the financial services industry and more broadly in our digital economies. Often pushed by digitally-minded governments, there are digital identity schemes at all levels of maturity worldwide. And where they are already well established they have evolved differently in different markets over the past 20 years. Many of the best examples, that have delivered high population penetration and efficiency and security for consumers and businesses, have had bank collaboration at their heart. In these cases, banks have been able to leverage their trusted role in the economy, their technical expertise and experience with shared infrastructure, to drive a level of success in opt-in digital identity schemes that governments have not been able to achieve on their own. But banks can’t take their prime position in digital identity for granted. Even in countries where banks have already driven the digital identity agenda, regulation and market structure can change and new competition will emerge. In countries that are still formulating federated digital identity frameworks, or looking to expand government national ID schemes into private sector usefulness, banks also need to be aware that the big tech giants and other globally networked companies have serious potential to upend the global market for digital ID. If banks get digital identity right, they stand to realise benefits in streamlined sales processes and customer onboarding, reduced losses from fraud and regulatory fines, and the potential for new revenue generating identity-based products and services. But more importantly, they can maintain their central role as arbiters of trust and stay relevant in the transforming digital economy. Download the full white paper below to find out more.

24 March 2020 803 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

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

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

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

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

The Banks as Universal Digital Trusted ID Providers

This whitepaper by Finextra and HID Global explores the new trends in digital identity and highlights how financial institutions are well placed to play a central role in these developments as well as some of the more advanced responses in the financial sector from both a regulatory and business case perspective. Being able to prove you are who you say you are is the basic underpinning of many economic activities, and traditionally this proof has come in the form of personal interactions and physical documentations. But over the past 20 years, the concept of digital identity has emerged, with varying definitions, and several long-term trends that have been building over the past decade are combining to transform digital identity and the way consumers and businesses interact and transact in the economy. Digital identification and authentication will be radically different in the coming years than the simple username and password combination that have persisted since the dawn of the digital age. And financial institutions, with their long experience of identity assurance and trusted role within the economy, are well placed to play a central role in these developments. Download this new whitepaper produced by Finextra, in association with HID Global, exploring these trends and highlighting some of the more advanced responses in the financial sector from both a regulatory and business case perspective.

06 November 2018 847 downloads

Report

Interconnection and Data at the Edge: The Next Frontier Of Competitive Advantage In Financial Services

There is a consistent focus on digital transformation within traditional banks. This paper, produced by Finextra in association with Equinix explores how interconnection and computing at the edge can help banks successfully navigate digital transformation and secure competitive advantage; whatever the future landscape looks like. Traditional banking is experiencing disruption on an unprecedented level, driven by regulatory change and increased customer demand. In order to remain relevant, banks need to go beyond compliance with legislation and a “me-too” offering, to a new frontier where they are considering new business models, innovating new revenue streams and working with new partners to offer a personalised experience. Banks lack the agility to capitalise on this opportunity given legacy technology, the ever-present threat of cyber-attack and the regulatory restrictions which are a pre-requisite for market participation. Through an online survey of over 100 expert financial services professionals, and a series of one-to-one interviews with senior bankers, this new paper lays out the key issues and opportunities faced by banks over the next five years. Download the paper now to view the results.

20 July 2018 695 downloads

Report

Meeting EU Regulatory Requirements in A Post Data Breach Era

2017 played host to a catalogue of data breaches, and some of the most shocking examples were those that were an updated account of previously reported breaches. This has done nothing to augment already dwindling trust in financial services. In the wake of the second Payment Services Directive (PSD2), the General Data Protection Regulation (GDPR) updates and AntiMoney Laundering (AML) updates with their regulatory requirements for stronger verification and more rigorous data protection, have current verification methods passed their expiry date? The plethora of digital account services available now has given rise to more opportunities for cyber criminals to breach customer account data- this can then be sold on the dark web and used for fraud and money laundering. At the same time, the rise of cryptocurrencies has enabled such nefarious activities by providing anonymity. What is the way forward for digital payment and service providers to know exactly who their customers are as they come under increased regulatory scrutiny? Download this new white paper, produced by Finextra in association with Mitek, as we explore these issues and highlights some of the emerging methods financial institutions can deploy to meet compliance obligations while onboarding their customers in a secure, user friendly manner.

04 June 2018 719 downloads