Latest Security reports and research: Finextra Research

Report

Will banks use digital security as a post-pandemic differentiator?

Banks large and small, old and new, have come a long way in a short amount of time. Prior to the pandemic there wasn't a bank or financial services provider worth their salt who did not have some kind of digitalisation strategy as a core part of their operations planning. The onset of the COVID-19 pandemic catapulted banks and their clientele into instantaneous cashlessness, forcing many organisations and customers to adapt at speed. A year and a half on, how much of this urgent transition will remain permanent is a key indicator of financial organisations’ success in responding to an unprecedented situation. Furthermore, whether the key pillars of trust and security upheld by banks have not only survived but positively thrived such that they stand taller and prouder, will be a key differentiator in a thoroughly modern banking landscape. These factors will illustrate how consumers and the industry have truly evolved as a result of unimaginable change. We take a pulse on these themes and questions by interviewing senior experts at several banking service providers across Europe and Asia. Download your copy of this Finextra report, produced in association with Feedzai, to learn more.

17 January 2022 376 downloads

Report

The Future of Digital Banking in Asia 2022

After the 2008 crisis, the financial services industry faced low interest rates, low credit growth, increased regulation, increased compliance requirements and a lack of trust from customers. This paved the way for banks in Asia to dominate the sector, surpassing the European and US banks that were formerly the largest by assets in the world. The financial crisis and the Asian boom threatened the traditional financial services industry and allowed fintech startups and platform-based companies, that prioritised competition to provide better services for the retail consumer, flourished. Alongside consumers opting to forego visits to bank branches, the more innovative players in banking focused their digital transformation efforts on the utilisation of information technology and big data to offer digital payments and advisory services. The speed at which these digital technologies were adopted was at a remarkable rate and this continued to accelerate amid the Covid-19 pandemic. Of course, Asia was ahead of the curve. While financial players in the region exhibited true disruption and extended banking services to previously underbanked segments of the population, traditional institutions on other continents were left with potentially obsolete legacy technologies, unable to serve the customers they had. To thrive in the future, incumbent banks must keep pace with the fintech newcomers and Big Tech players that have already started to gain market share in Asia. They can do so by leveraging application programming interfaces (APIs) which have enabled faster payments, simplified unbundling of services and improved data sharing for open banking. Also, cloud computing has supported the storage and sharing of data with the aim of improving customer experience and financial accounting in areas such as payments and credit scoring. Integration with mobile devices and digital wallets is equally crucial. In Asia, payment apps serve billions of users across the e-commerce, chat, delivery, food ordering and ride hailing industries. Globally, although Visa and Mastercard retain their lead in the transaction space, the likes of PayPal, Apple and Google are blossoming in the financial services industry. Further, as usage of cash declines, interest in digital currencies is increasing – with Alipay and WeChat Pay facilitating the introduction of cryptocurrencies and stablecoins in the corporate market. Banks now recognise that the route to digital transformation starts with digital payments and digital currencies, and the evolution of digital banking in Asia provides the blueprint for other regions searching for successful paths to innovation. This Finextra report, The Future of Digital Banking in Asia, in association with Infosys Finacle and OneSpan, explores these themes with commentary from Citi, DBS, livi bank, and Mox Bank.

22 December 2021 1017 downloads

Report

The Reinvention of Card Payments

Responding to Innovation: Where will the impact be? Payment innovation coupled with the pandemic's digitisation drive, is spurring card issuers to reinvent themselves. With the mushrooming options for consumers and merchants, it is challenging for issuers to navigate this landscape and know, with certainty, what the future will hold. It is crucial they get it right, however, since payments for banks and non-banks alike are a key touchpoint with the customer; they are the ‘in’ to a long-lasting - and profitable - relationship. Issuers must adapt to the increased expectations of the customers, which have shifted since the pandemic. Buying behaviour fundamentally changed once lockdowns went into effect, with in-person purchases plummeting and online sales skyrocketing. The pandemic gave the impetus that many needed to make the switch to contactless, and limits were increased. The contactless trend is set to continue. In Asia contactless is more likely to take off in developed markets, whereas QR codes are expected to take off in emerging markets. These trends, of course, are an acceleration of a shift that was already underway. The dwindling of cash has long been documented, along with the steady increase in electronic payments. And for issuers keeping track of the various payment forms, there is growth expected across the many types in the years to come. Download your copy of this Finextra report, produced in association with FIS, to learn more.

17 December 2021 1208 downloads

Report

Future-Ready Payments Solutions: Remaining competitive with reusable technology

Over fifty years ago, when the original payment pioneers built electronic funds transfer (EFT) platforms to enable card services, they had a single use in mind. Reliable and secure card payments were achieved, but the architecture was so closely bound to card transactions that it is now becoming incompatible with today’s colourful payment universe. As mobile and contactless payments, Quick Response (QR) codes, digital currencies, Request to Pay (R2P), Real-Time Payments (RTP), Buy-Now-Pay-Later (BNPL) and peer-to-peer (P2P) payment applications take off, banks are forced to build separate in-house silos, in order to process these new payment types. Given a plethora of dedicated systems are already in place to process cash, cheque and card payments, management of these silos and ‘add-ons’ is becoming a complex undertaking. Forward-looking banks are tackling this challenge by deploying modern payments platforms that are comprised of a set of re-useable services. These have the capacity to not only consolidate numerous payment schemes onto a single platform, but they can also future-proof businesses by facilitating easy adoption of new payment types. As the payments race heats up – and banks wrestle with the emergence of new digital currencies, payment instruments, funding methods and payment types – those with the most agile, secure, and reusable platform will be rewarded with a strong competitive edge and improved margins from being able to control when, how deeply and how long to take part in any new payments venture. Download your copy of this Finextra impact study, produced in association with Diebold Nixdorf, to learn more.

09 December 2021 788 downloads

Report

Building the Road to a Hybrid Cloud Future

A recent survey conducted by Finextra and Red Hat showed that 82% of the financial services respondents say they are embracing and implementing hybrid cloud infrastructure company-wide. Many are now deploying open source technologies to support and enhance the inherent capabilities of a hybrid cloud infrastructure, which include agility, resilience, portability, automation, speed to market and continual testing and iterative improvements at speed in isolated, protected environments. The open hybrid cloud adds interoperability to this, and is a factor cited by leading practitioners as increasing their ability to attract developer talent. These attributes, however, will mean very different things to different business stakeholders and will therefore be prioritised in differing orders by different business lines. Speed of development and speed-to-market will likely be of greatest importance to digital programme strategists and developers, whereas portability will be more important to someone leading system recoveries or performance outages, where operational resilience is key. Where these priorities conflict – or complement – each other needs to be identified and communicated to the board, for a cohesive, top-down strategy to be fulfilled with a consistent approach. There will be different challenges in executing that strategy across different parts of the business - there could be gaps in knowledge, understanding or expertise, hence where these challenges lie and for whom becomes a compelling question to answer. Overcoming different hurdles and identifying the different benefits is a key part of a strategy to fully realise the potential of cloud architectures. And all strategies need to take a long-term view – the migration from on-premise systems in bank-owned data centres to a cloud service provider and on through hybrid cloud environments is a dynamic culture shift rather than a quick decision to migrate a few workloads and reap the benefits. Financial organisations need to know and understand the value of what hybrid cloud can deliver to what part of their business and overall operations, and they need to identify the different gaps and challenges in order to achieve the required outcomes. It is no small journey or undertaking, but the benefits can be universally acknowledged as a clear incentive. This research paper from Finextra, in association with Red Hat, is based on several interviews with senior leaders from diverse areas of the banking business to explore and understand some of the key questions around hybrid cloud.

24 November 2021 252 downloads

Report

Facing up to the Future: Biometric Automation in Banking

The advantages of biometric authentication in banking over less secure passwords are now well understood. Biometric measures such as fingerprints and face verification not only help to reduce fraud and financial loss for banks and their customers, but they make transactions more convenient and faster for users. As a result, consumers the world over have become accustomed to the merits of biometrics. However, the use of biometrics is not without its challenges. The first of these is that wherever technology breaks barriers in terms of convenience and usability, so surely will fraudsters follow to find nefarious ways to breach new barriers of security. What remains difficult for the financial services industry is the live authentication that a verified identity is indeed a real person logging on in real time. Fraudsters are structured and organised, and impersonation can take many different forms. Banks need to be able to deliver a consistent yet flexible level of ongoing security depending on the risk profile of the transaction. Biometric authentication can provide a consistent yet flexible experience to make online banking simple, convenient, secure and inclusive to customers. Cloud-based services, as opposed to device-based authentication, mean attacks can be fixed faster and in an isolated fashion so as not to affect other parts of the system. They also facilitate faster and more comprehensive analysis of activity, which means any future potential attack can be addressed more quickly. This white paper from Finextra, in association with iProov, will explore the following points and more: The latest technologies available to banks to facilitate biometric ID verification and authentication The perception and preferences of banking service users and the current methods and techniques banks are employing How cloud-based biometrics can bridge the gap between now and the future of seamless and secure authentication services

12 November 2021 460 downloads

Report

Open Banking powered by the Cloud, Democratising Finance at Scale

As new business models emerge with recurring revenue in the innovative payments sector, traditional banks are looking to utilise open banking and open finance to assist with their digital transformation. Consumers need real-time, instant, and faster payment capabilities, and with open banking, PISPs are providing alternative methods of payments with a single API connection. Whether banks are providing alternative payments methods or not, this shift to a digital economy will continue and will result in an attraction to a platform where financial data can be used to offer value-added services to other industries. By utilising APIs, financial institutions can implement open finance solutions to improve the customer experience and offer customers greater product choice and control over their finances and data. With a cloud provider, customers can build APIs across multiple microservices that interact with third parties quickly and connect with them in a simple way. Fintech firms have developed open finance solutions that complement cloud-based open API platforms and provide the solutions financial institutions need. With the cloud, financial institutions can scale APIs on demand, pay only for what they consume, and build modern serverless architectures. Building open finance solutions on the cloud requires minimal capex and investing in this technology today will help financial institutions get a step ahead of industry peers. Download this Finextra impact study, in association with Amazon Web Services (AWS), to learn more.

28 October 2021 546 downloads

Report

Core Banking on the Cloud - The Catalyst for Innovation, Agility and Efficiency

Traditional core systems that assume a branch interface and retain human-led back offices no longer meet needs. To be truly agile, banks must prioritise interoperability and automation through digital channels to stay competitive and avoid irrelevance. With this focus on digital transformation and initiatives such as open finance, banks are adopting a buy approach to software and infrastructure, especially when running core business applications on the cloud. Today, banks do not have to build customised software when providers have plug and play solutions readily available. Software providers have historically deployed a maintenance model where their customers opt for per-user licenses for a particular service. Now, with SaaS, software can be centrally hosted and delivered through the cloud. In addition, many providers are leveraging AI and ML capabilities, and embedding enhanced omnichannel features. This enables banks to optimise, tailor and deliver consistent customer experiences across digital channels, remove friction, and develop deeper trust. As new technologies open up data streams to and from third parties and emerging startups, banks will be able to offer their customers a range of new products, services and insights that will not only optimise customer experiences, both online and offline, but will create highly personalised, customised relationships. Download this Finextra impact study, in association with Amazon Web Services (AWS), to learn more.

07 October 2021 534 downloads

Report

Competitive Advantage through Cloud Connectivity

Why NaaS is the smartest path to realising Financial Services Innovation in the Cloud. Many financial services firms are still making the shift from their legacy environments to more agile ways of consuming and running IT. Networking is one of the most critical aspects of this transition. It’s the backbone that connects all parts of an organisation and its data, as well as its wider ecosystem of partners, providers, and customers. The speed, reliability, and flexibility of the network directly impacts financial players’ pace of innovation, as well as their ability to provide highly available, customer-centric services. The challenges and limitations of traditional networking are clear in our virtualised, cloud-enabled, data-driven world. It’s slow to provision, expensive to maintain, lacks flexibility and integration, and can’t scale effectively to handle big data sets and analytics workloads. The need to modernise and simplify networks is an imperative for financial services organisations as their infrastructures become more complex and they develop their multi-cloud and hybrid-cloud strategies to support business transformation. Network-as-a-Service, or NaaS, enables financial services organisations to maximise the potential of the cloud as part of their digital transformation. It provides the future-proofed networking foundation that allows innovation and competitive differentiation. Download this Finextra impact study, in association with Megaport, to learn more.

06 September 2021 173 downloads

Report

Cost of doing business as usual or an avoidable drain on margin?

Operational loss events related to Execution, Delivery and Process Management (EDPM), and Clients, Products and Business Processes (CPBP) can represent the most financially damaging losses for banks. Yet these often fly under the radar of more PR-friendly talk around cybercrime, money laundering and fraud defences. There is relentless pressure for revenue growth, client acquisition and flow. But margin is just as important, if not more so. Every operational loss event that occurs because lessons have not been learned from previous failures, is a direct and significant hit to margin. While risk management departments might be aware of the scale of the problem, how many people working in data reconciliations, operations or IT could tell you the average cost of a loss event? How much focus is being directed from the board and C-suite to make sure that operations have what they need to improve data quality and flow, introduce intelligent automation and remove manual touchpoints and opportunities for failure? This Finextra white paper, produced in association with SmartStream Technologies, examines what more can be done to translate operational risk measurement into operational and financial margin improvements, and the barriers to overcome.

19 August 2021 193 downloads

Report

Stemming the tide of Social Engineering Scams with Behavioural Insights

Fraud and cybercrime are always on the increase, evading the latest security conventions and morphing into a different approach, following the money. In the same way, banks and financial organisations worldwide need to continuously respond and adapt. Global events create new trends and directions for fraudsters to exploit and the recent Coronavirus pandemic is no different. Social engineering fraud has gripped the industry in the last year and in particular, phone and business email scams seem to be resulting in the highest losses; indeed, according to the US Federal Trade Commission, 77% of fraud complaints reported by consumers in the US involved contact by phone. In the UK, it is more commonly referred to as Authorised Push Payment (APP) fraud, and while measures have been introduced, such as the Contingent Reimbursement Model (CRM) code and Confirmation of Payee, to protect consumers and to detect and prevent scams and illicit funds transfers, more needs to be done in the UK, and globally. The good news is banks can access and utilise increasingly sophisticated technology and expertise to meet the fraudsters’ aptitude, analysing behaviour patterns, for example, to uncover social engineering scams. Behavioural insights can be used to inform new strategies and respond to attacks in real-time where other security controls have failed. With large losses becoming increasingly publicised, and hence reputation brought into question, the industry must respond, and it is incumbent upon all players to collaborate and be proactive around accountability and prevention. This research paper from Finextra, in association with BioCatch, explores the recent uptick in social engineering attacks globally, and how banks can respond using the latest technology and security measures.

06 August 2021 223 downloads

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From Surviving to Thriving: Digital Customer Engagement beyond Video Conferencing

During the Covid-19 pandemic, and ensuing national lockdowns, one of the key challenges for financial services professionals involved in customer or client advisory has been ensuring a smooth digital migration – and that consumers are adequately served via video conferencing solutions. Now that the industry has largely adjusted to this ‘new normal’, it is time for those across the retail, private banking, and insurance sectors to think about how to further upscale their online customer journey, client service, and Know-Your-Customer (KYC) processes, by adopting an innovative, omnichannel, digital customer engagement solution. By providing easier online access to financial guidance and advice for existing clientele, financial players assume a more customer-centric approach, which can result in improved customer retention, increased revenues, and maintenance of marketshare. Download this Finextra impact study, in association with Unblu, to learn more.

29 July 2021 206 downloads

Report

Driving successful Cloud Transformation

Capital market firms face the challenge to evolve at pace with technology, so that they're able to innovate and adapt to the customer’s needs quickly. Cloud is seen as a key enabler to their digital future, however cloud adoption isn’t just about IT infrastructure. How can executives develop a holistic approach towards cloud modernisation to ensure their investments pay off? As ‘digital’ engulfs business strategies, large-scale financial services players need to develop smarter ways to adapt and accelerate technological change. They are also under constant pressure from fintechs operating on agile systems, rolling out products and services at speed. The pace of innovation at large firms often suffers due to the scale of operations, monolithic tech infrastructure, ‘people alignment’ and old ways of working. Challenges brought about by COVID require even greater levels of resilience and agility to navigate. More firms than ever are using cloud-led modernisation as a catalyst for holistic enterprise transformation, and crucially, this should lead to adaptable business models that can sustain growth and weather future uncertainties in an ever-changing milieu. To maximise the value from investment, operating models need to align closely business and tech strategies. A democratised approach needs to be implemented enterprisewide and with that, a portfolio management approach to balance the long-term evolution of the underlying platform whilst pursuing growth with new products and features. Technology modernisation is also an enabler for lean product management practices such as low-cost rapid experimentation for exploring and exploiting innovative opportunities. Organisational, as well as technological change is needed to ensure teams can tap into the acceleration and agility that cloud-based architecture promises. Organisations need a mind shift- moving from a top-down decision culture to an empowered agile workforce that can continuously deliver on strategic business outcomes. This research paper from Finextra, in association with Thoughtworks, is based on interviews with senior leaders on their plans and challenges around digital programmes and cloud modernisation.

15 July 2021 339 downloads

Report

Successful strategies in adopting Hybrid Cloud in Financial Services

The benefits of profitability, cost-management, compliance, agility and efficiency gained from implementing a hybrid cloud strategy are hugely beneficial and yet there are hurdles to overcome to ensure success. A preferred strategy is to design and deploy hybrid cloud at the enterprise level. It is an important contributor to the IT and business transformation of financial institutions and the innovative benefits they seek to deliver at scale and speed. But how much of its use should a business adopt? The full value of hybrid cloud is derived from a holistic strategy, pursuing a transformation program, replacing dependency on disparate IT infrastructure and modernising the way a business performs ideally across the entire organisation. Where an organisation excludes certain business functions and operations from cloud adoption it is an exception. Today, cloud computing is a reality and the use of a hybrid model widely accepted, but there are pitfalls to be aware of. Businesses moving to cloud should be clear on their objectives and goals. What’s clear from the response is 66% of those surveyed have implemented a version of hybrid cloud at a largely functional / operational level. How did this arise? Several common challenges prevent successful migration to a hybrid cloud solution and failure to manage them will often stall or prevent realising the opportunities and optimise the benefit. Some of the common mistakes include the lack of business in-house specialist expertise, failure to analyse the impact and adopt the right implementation strategies- all fundamental business requirements. There is a huge endorsement of adopting hybrid cloud at the enterprise level as many IT executives look for consistency in their strategy. However, many complexities remain, as institutions look to navigate legacy and cultural issues in order to be successful. Download your copy of this Finextra Survey Report, produced in association with Red Hat, to learn more.

29 June 2021 321 downloads

Report

The advantage of Machine Learning in preventing fraud

Accurately identifying customer behavioural trends and proactively preventing payments fraud and other criminal activity at the outset can be done with machine learning. Ingesting tens of thousands of complex signals and analysing patterns to monitor activity is more effective than blocking transactions based on hard-coded and antiquated rules. Fraudsters can learn to circumvent these, and trusted users are put at risk, which is why embedded machine learning algorithms can be valuable. Download this Finextra impact study, in association with Sift, to learn about: Payments fraud and how machine learning is being leveraged today, Account takeover fraud, the biggest future threat to banks, and Synthetic ID fraud, the next opportunity for machine learning.

17 June 2021 391 downloads