Latest Regulation & Compliance reports and research: Finextra Research

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 190 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 399 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 1004 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

Report

The Future of ESGTech 2023

A Sibos Special Edition While new risks emerge, so do new opportunities for financial services providers to lead technological innovation and drive positive global change. The key question at this year’s Sibos event and into 2023 will be around how success can be measured, and whether organisations that pave the way for the future of banking will be able to adapt to these new priorities and shifting geographical landscapes. Alongside scaling forward-thinking innovations and managing risk in an uncertain world, in 2023, banks must leverage innovations such as AI, machine learning, big data and privacy enhancing technologies to deliver operational efficiencies and an enhanced service offering. Further, by utilising new initiatives such as Banking as a Service (BaaS), financial players can increase their banking footprint through networks of third-party applications, while at the same time, modernising their legacy platforms and products. With this level of innovation to hand – in a world where financial services providers are being forced to adjust to geopolitical, regulatory, and cybersecurity risks – business models must also evolve to ensure success in uncertain times, whether it be the Covid-19 pandemic, climate change or any other global issue that the United Nations’ Sustainable Development Goals aim to achieve. Driving sustainability and ethics will be pivotal in 2023. This report, featuring expert views from SWIFT, GLEIF, and NayaOne, will explore issues such as climate disclosures, ESG standardisation, greenwashing, and financial inclusion. In addition to this, key insights from the Abraham Kuyper Center, Barclays, BBVA, HSBC, and MUFG, will explore how organisations lead positive change across the globe.

12 September 2022 800 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 791 downloads

Report

Real Time Payments: Solving today's problems for tomorrow's success

Banks understand what they need from real time global payments, but reaching a position where they can leverage the full benefits available is a significant challenge. While multiple projects are underway around the globe in an effort to bring real time to multiple markets, before banks can tap in to the advantages of real time, they must first get their technological house in order. Banks must consider how real time payments should interoperate with each other, and create real time global settlement and clearing. Why does this remain such a challenge? It is all related to what is happening in the payment structure of traditional banks. Whether it’s a tier 1 bank encumbered by legacy systems, or a smaller bank with limited coverage of cross border capabilities, in almost every financial institution, payments tend to be segregated. This Finextra impact study, produced in association with Form3, will explore the current challenges faced by banks in their efforts to meet instant payment objectives, how the global real time ecosystem is driving pressure on financial institutions to evolve, canvas key trends pushing the real time agenda, and the best way for banks to orient themselves for real time success.

23 June 2022 835 downloads

Report

The CIO’s guide to architecture modernisation through portability, resilience, and flexibility

Why CIOs need to shelve short-termism in favour of smart modernisation Every architecture decision a CIO makes directly impacts their bank’s competitiveness and success. This is truer than ever as competition and disruption from agile, fast-moving players continues to increase and they scoop up customers who are eager to interact in new ways with their financial services providers. The infrastructures on which the traditional financial services industry - and banks in particular - have been built aren’t holding up to this pressure. Their response? Singlethreaded point solutions, and lots of them. However, these aren’t solving problems for the long-term - or, arguably, even in the short-term. Rather, they’re exacerbating a growing architectural issue, adding to the inefficiency and lack of scalability of their IT environments. They’re also making it harder to get a clear, unified view of the whole estate. Instead, banks continue to accumulate technical debt, create integration headaches on a colossal scale, and ultimately fail to rise to the challenge that today’s financial services ecosystem demands. Of course, banks have legacy infrastructure to consider. Abandoning these investments isn’t an option. But building alongside them using cloud and new technology is. Banks need to consider how to bring together the operational domains of customer, application, infrastructure, and security. Through modernisation and automation - and combining the best of existing and new – they’ll be able to connect data silos, integrate systems, and enable real-time visibility to deliver improved services faster and more securely. The bottom line is, banks’ CIOs need to do more than merely resource the next project. They should be working towards increased visibility on all levels to provide long-term resilience for their organisations and most importantly, their customers. And whether success means enabling their global workforces to work from home today, tomorrow, or next year - or upping the game when it comes to customer interactions - they’ll be able to do that, and more, underpinned by a modern infrastructure. Download this Finextra impact study, produced in association with Tanium, to learn more.

14 June 2022 397 downloads

Report

The Future of Payments 2022

The Cutting Edge of Digital Payments The Covid-19 pandemic and Russia's invasion of Ukraine in 2022 has proven that the financial services industry must be always at the cutting edge of payments. Amid uncertain times, resilience is key and with the rising cost of living expected in the UK and across Europe, criminals will view this as an opportunity to infiltrate financial systems and attack. We will need to adapt at the same rate as fraudsters, and all digital systems must be designed with security at the forefront. Alongside this, education will be crucial to ensuring customers are aware of the risks involved with new financial or payments schemes. As seen with the UST crash and instability around digital assets, the sector must remain cautious before placing all our bets on uncharted waters. With expert views from Banking Circle, CBI, Form3, GoCardless, and Infosys Finacle, in this report you will learn from industry leaders about the events and trends defining global payments in 2022 and beyond. The report also includes insights from Fluency, Hogan Lovells, IBM, McDermott, Will & Emery, Nationwide, Nordea, Linklaters, TSB Bank, and Visa.

27 May 2022 1741 downloads

Report

The Future of Digital Identity 2022

Inclusive, Secure, Fit For Purpose Digital identity will be the catalyst for financial institutions wanting to navigate the data ecosystem in an increasingly sophisticated manner. In addition to an equivalent or replacement to physical identity documents, digital identity has also become a way to provide verified personally identifying information (PII) for software to read and process. Alongside this, over time, digital identity is also being utilised to enhance privacy protection and reduce financial crime through authentication. While biometrics are now part and parcel of life in 2022 – with the prevalence of mobile payments with Face ID and Touch ID – the concept of real-time and frictionless processes is what is driving the future of digital identity forward. According to the World Economic Forum, good digital identity has five key components. These five components form the basis of this report: Useful Inclusive Secure Offers choice Fit for purpose With expert views from CGAP, Citi, EPAM Continuum, HSBC, KPMG, London School of Economics, Loughborough University, The Purple Tornado, and the United Nations in this report, you will learn from industry leaders about the events and trends defining digital identity in 2022 and beyond.

06 May 2022 1077 downloads

Report

Can you afford compliance?

Maintaining compliance for both regulatory and industry-driven standards is complex and expensive, yet fundamental to a financial institution’s ability to provide payment services. As the rate and complexity of compliance changes increase, financial institutions are constantly under pressure from regulators that are adopting agile principles designed to protect the evolving financial ecosystem. Financial institutions also have to balance the growth of modern instant payment rails, the need to support mandated overlay services, and the emergence of new and sophisticated forms of risk. For financial institutions, there is a difficult balance in managing compliance while investing in innovative, customer-centric and competitive capabilities. Further, as the speed of transition to a digital environment increases, so do regulatory and compliance requirements. While recognising the impact that managing and maintaining compliance has on a financial institution, an upfront assessment of applicable regulatory requirements - and integrating compliance with the overall digital strategy - allows financial institutions to minimise risk while providing a platform for building innovative business propositions. Benefits include protection from financial crime, information analysis and improvements to the customer experience – all driving growth while optimising regulatory obligations. The path to compliance and managing risk varies by the maturity of payments markets, with the approach taken in emerging markets being very different from mature markets in EMEA and APAC. This Finextra impact study, produced in association with Fiserv, explores five core areas of compliance that are challenging financial institutions today, and how combatting these concerns can orient institutions for success.

25 April 2022 461 downloads

Report

Cloud, the Critical Component to Power New Business Models

Today, every company is a technology company. No organisation can modernise products, deliver services, or meet customer expectations without harnessing the benefits of technology. Financial institutions are now learning from leaders in other industries and applying acquired best practices for successful cloud adoption to their business models. The financial services industry is at an inflection point in its use of technology and banks have already started to seize this moment and embark on their transformation journeys. With the increased agility that the cloud offers, products can be brought to market much faster and in a cost-efficient manner, which is what has led to traditional financial institutions adopting and migrating to the cloud with urgency. Key drivers, in addition to resilience, include the desire to be more efficient from a developer productivity standpoint and raising the bar on security has been equally important. To workshop these best practices, experts gathered for a Finextra webinar, ‘Modernise, innovate and transform on the cloud’, hosted in association with Tata Consultancy Services (TCS) and Amazon Web Services (AWS). The panel looked to explore how financial services organisations are leveraging the cloud to transform existing businesses and bring innovative new solutions to market.

11 March 2022 395 downloads

Report

Payments Transformation: Emerging Stronger

The Finextra Annual Payments Survey Report 2022 in association with Fiserv We discuss findings from the survey on how financial institutions are continuing to grow and tackle emerging and disruptive competition while rationalising investments. There is a change in emphasis towards reduction - reduction in costs through consolidation; reduction in risk through a focus on financial crime; reduction in a one-size-fits-all approach; reduction in resources to address the increasing demands of customers, regulators and the payments industry. It demonstrates that there is a clear understanding of the benefits of consolidation of payment types, including operational and customer experience improvements. Progress to this goal highlights the trend towards outsourcing standardised processes such as payment processing to a capable and trusted partner, through the evolution to payments as a service, allowing the financial institution to improve its overall operational efficiency and customer propositions. Download the report of the results from the recent Finextra Annual Payments Survey, by Finextra & Fiserv, below to learn more.

10 March 2022 913 downloads