Latest reports and research: Finextra Research

Report

Automation, Resiliency and Agility: Key Drivers of Cloud Adoption and Strategy

A Finextra Research Impact Study in Association with Calypso Technology and Amazon Web Services (AWS). Cloud adoption for financial services firms has been on the rise over the past few years - a trend that has been further bolstered by the wave of digitisation brought on by the global pandemic. A survey of financial services firms’ cloud attitudes conducted by bobsguide in 2020 revealed that nearly 83% of participants were already working on the cloud, with 50% expanding their use and the rest of the respondents having already completed their cloud migration. Financial institutions in the global capital markets space are facing unprecedented regulatory scrutiny, IT rationalisation, and cost pressures while still having to deliver value to their clients, which has shifted the spotlight on cloud from innovative or experimental initiatives to mission-critical workloads that can be made leaner and less expensive to maintain. While cloud has become a common mode of delivery for innovative capital markets firms, recent financial pressure, global macro-economic uncertainty and the need to respond to regulatory change has led to cloud adoption and migration being integrated and considered a crucial part of a financial institution’s business strategy in optimising mission-critical workloads with cloud technology. In this impact study, we discuss the key drivers of cloud adoption, as well as strategies that ensure successful outcomes for customers who want to make the move to cloud. Download your copy of the Impact Study below to learn more.

11 December 2020 390 downloads

Report

The Future of Core Banking 2020

The Catalysts Driving the Smart Finance Evolution. Core banking continues to rank among the top technology investment concerns in banks. However, there is a fundamental mismatch between expectations based on real-time consumer experiences and a bank’s ability to serve those experiences front to back. There is no shortage of effort by banks to broach this gap and shore up the end-to-end consumer experience with emerging technologies, but the realisation that core banking infrastructure may not be up to the task is a bitter and expensive pill to swallow. Especially for the more traditional, legacy institutions. While this is nothing new, pressures brought about by Covid-19 have served to exacerbate structural weaknesses as banks have scrambled to deliver and outperform in a purely digital manner. The cost of expediting these projects is substantial, to say the least, yet when presented with few other options, banks overwhelmingly accept as they appreciate the speed at which digital newcomers will happily step into their shoes. The realisation that investment in resilient, powerful core banking systems will improve banks long into the future certainly softens the financial blow. Greenfield banks, for instance, are curating the architecture they are investing in now to ensure that they remain in step with the pace of change 10 to 15 years down the line. The ease with which these digital banks are operating and expanding across diverse markets also informs how more traditional players can approach banking into the future. Yet, even the most sophisticated technology requires smooth implementation in order to profit from its offering – this means nurturing and honing DevOps agility is equally fundamental to both resilient core banking infrastructure and client satisfaction. These opportunities present institutions with the proposition: replatform, refactor, augment or replace. The age-old dilemma is no longer painted with a brush of scepticism as banks increasingly see the value in collaborating with third parties to increase their product offering and view modularised systems as a keystone for ongoing innovation. To deliver the full potential of this technology, the way core banking interacts with data remains an ongoing concern for banks which are being pulled in opposing directions by the need to both innovate and remain compliant. This challenge weighs on latent revenue streams and institutions are carefully considering whether monetising data resources can be achieved without compromising customer rights and privacy regulations. Optimistically, however, banks are entrenching already established sustainability strategies with data-focused technology to deliver more ambitious carbon reduction objectives. Engaging with leading financial institutions across the globe, this report grapples with the subjects that are front of mind for banks of all shapes and sizes as they face the unprecedented pressure of a pandemic coupled with meeting the breakneck pace of financial technology advancement. This report by Finextra, in association with Red Hat and Temenos, explores the limitless opportunities firms hold to enhance and build upon their core banking infrastructure and gathers the views of several experts from Alba Bank, BBVA, CaixaBank, Commerzbank, Crown Agents Bank, ING, Investec, OpenBank, Sberbank, Société Générale, Standard Chartered, and Varo Bank. Download your copy of the report below now to find out more.

09 December 2020 1299 downloads

Report

Paving the path from Open Banking to Open Finance in Benelux

Open banking has set the pace for differentiation of the financial services ecosystem, invited new players into the mix, challenged traditional meanings of data, value, personal information and the dynamics of ownership, and blurred the hitherto service sectors of society. This has resulted in greater competition and a proliferation of new services and offerings in payment and aggregation, blending activities across verticals and industries, and creating new ways of interacting. The end user is undoubtedly the winner here but there are nuances still to be played out in terms of the perception of value attributed to personal data, ownership of the customer relationship, and the way in which services will shape the way people live their lives and vice versa. Open banking is en route to open finance and beyond to open data, and in this burgeoning economy where new players, partnerships, aggregated services, platforms, apps and ecosystems are sprouting up, merging and shape-shifting at breakneck speed, it could not be more important to ensure at every turn the resilience, safety and security of each system. The Benelux region, at the heart of Europe and straddling the very seat of European financial regulation, is well positioned as a microcosm of how the new economy is unfolding. This research paper from Finextra, in association with Equinix, is based on several interviews with experts in the open banking space and in Benelux who shared their views and insights on the current response to open banking and the future of open finance and open data. Download your copy of this Finextra white paper, produced in association with Equinix, to learn more.

27 November 2020 466 downloads

Report

Securing the API Ecosystem

New and different banking models are emerging as the various influences in financial services today take hold. Change happens at a faster pace than ever, increasing in rate by the year, and this is very much part of the new operating norm. Regardless of the pressure for banks and other financial organisations to adapt, transform and carve a new identity out of an everchanging ecosystem and set of demands and requirements, there cannot be a lapse in the protection of systems, of customer and client data, and hence, trust. This is, after all, arguably the most valuable asset banks have. Security, while not of itself the driver of digital transformation strategies and dialogues, underpins each and every activity, plan and transaction an institution makes or hosts. And the direction of travel that industry transformation is taking places a lot of pressure on reconfiguring systems to be robust, because that direction is branching out into the realm of myriad other players through open banking APIs. In some regions the opening of banking services is mandated, such as in Europe with PSD2; in others, a commercially-driven approach has taken hold, such as in the US. And in others still, where mobile phones have formed the basis of modern banking, it is more an innate approach than a transition or shift, such as in Asia Pacific. APIs are nothing new in financial services, but while they have always been a back office functionality tool, they have now moved very much to the fore in being the connectors of a new, more open financial ecosystem. They have been used to connect developers to payment networks as well as to display billing details on a bank’s website. Through open banking, however, APIs are now being used to allow third parties access to certain data sets, with the requisite consents, and vice versa. They provide democratised, low fidelity, low latency ‘bridges’ between organisations to facilitate the rapid expansion of the ecosystem, competition, and hence choice and empowerment for the consumer. But with such change and opportunity also comes great risk. Download your copy of this Finextra white paper, produced in association with Equinix, to learn more.

26 November 2020 489 downloads

Report

The Future of Payments 2020

The Race Against Time for Payments Transformation. In the age of instant payments and with the first Request to Pay services to go live in 2020, the financial services industry needs to prepare for the impact on the European payments landscape and understand how the growth of digital payments technologies will affect the sector. This report looks at how real-time fraud can be addressed - when KYC remains a challenge – and whether initiatives such as TIBER-EU has the potential to strengthen the resilience of the financial system against cybercrime. The requirements for corporate liquidity management are shifting in the age of instant payments, making way for a more collaborative model to dominate. However, with the availability of mobile devices, payments service providers must prioritise providing their customers a slick customer experience. In parallel to this, financial players must understand the challenges of managing risk in an instant world, which is a paradox that correspondent banking faces. This is where adaptable payments architecture and a smooth standards migration can help banks focus on strategy, rather than the day-to-day processes. Problems with operational efficiency can be overcome with leveraging APIs, but a question is posed when considering whether banks are ready for this technology to be customer-facing and if they would allow account access to third parties. Finextra’s The Future of Payments report will explore how new business models, new operating models and new forms of collaboration are the catalyst for the 2020 payments ecosystem, which in turn, will help banks and payments providers to establish a clear strategy for the future. Organisations interviewed in this report: Bank of England, BNP Paribas, Deloitte, Deutsche Bank, Erste Group Bank AG, EY, ING, JPMorgan, Santander, SEB, Standard Chartered, SWIFT. Download your copy of the report below now to find out more.

24 November 2020 570 downloads

Report

Accelerating Enterprise-Wide Innovation with Cloud Migration and Data Governance

A Finextra Research Impact Study in Association with Collibra and Amazon Web Services (AWS). In today's environment, data is produced and consumed at a rapid pace. However, the way it is currently being stored, accessed, and processed is inefficient. Migration to the cloud promises to change this reality for financial institutions, but there are several obstacles tied to digital transformation that must be addressed in the process. The exponential increase in data generation is set to continue in the coming years, especially as the adoption of mobile technology rises. The risk and opportunity introduced by big data to the financial services industry are unparalleled. As the most data-intensive sector in the global economy, the ability of financial institutions to obtain, process, and analyse their complex data assets – structured or unstructured – is becoming fundamental to market success and remaining competitive. Moving data to the cloud with a partner such as Collibra establishes a governance foundation for banks as ungoverned data lakes can quickly become data swamps. Data intelligence vendors can provide a platform that helps banks gain a unified view of data assets to unlock their true value. These technology companies can help improve trust in data to strengthen analytics and hasten time to insight through machine learning powered features such as automatic data classification, guided stewardship, and auto-discovery functions. Cloud migration and services such as those offered by Amazon Web Services (AWS) should be at the centre of banks’ digital transformation, but challenges around lack of executive alignment, technical skillsets, and data lake experience must be overcome in order to become masters of their data. Download your copy of the Impact Study below to learn more.

20 November 2020 309 downloads

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

Innovate and Launch: How banks can securely leverage cloud to expand into new markets

A Finextra Research Impact Study in Association with Mambu and Amazon Web Services (AWS). The cloud can power innovation for financial institutions. According to McKinsey, 70% of banks are reviewing their core banking platforms and are beginning to leverage the potential that cloud-native services can deliver, as well as the offerings provided by technology vendors. When a bank or payments provider moves to a digital banking platform, cloud migration is a fundamental part of the process. Deloitte highlights that success with process re-engineering and efforts at digitalisation with emerging technologies such as artificial intelligence are dependent on cloud computing. Cloud migration, for any firm, is complex and no two firms will have the same journey. The key factor here for financial institutions is to collaborate with the right cloud services provider and the right technology partner. In order to stay agile, launch new products quickly and cost effectively, cloud is essential for banks and payments providers. This will even allow traditional players to compete with nimble fintech startups and well-funded financial services firms. Security and compliance are primary considerations for banks and payments services providers adopting the cloud. SaaS banking platforms that support composable API-enabled architectures allow banking and payments firms to operate like technology companies. Working with providers like Mambu running on Amazon Web Services (AWS), firms can scale their core banking business and innovate faster while operating in a secure, compliant environment. Download your copy of the Impact Study below to learn more.

13 November 2020 576 downloads

Report

Digital Transformation Accelerated

A Sibos 2020 Report produced by Finextra in association with Intel. As the global coronavirus pandemic pushed the annual Sibos event into virtual mode for the first time in 2020, it’s not surprising that everyone was keen to talk about how this has changed things in the key areas that the industry gathers to review at this time of year- technology, digitisation, innovation and the future of finance. There was broad consensus that COVID-19 has led to two years’ worth of digital transformation in just two months, as the lockdowns kicked in at the end of March. Financial institutions were affected internally, with a major emptying-out of financial centres and distribution of their IT estates amid rigorous oversight of new workflows, security practices and productivity. But they also had to react to the new expectations and behaviours of retail customers in lockdown and corporates who have themselves had to embrace remote and hybrid working for their financial and supply chain management. As the situation demanded- and continues to demand- flexibility, and economic fears push cost and efficiency to the fore, change resistors within financial services organisations, corporate customers and regulators alike have been forced to become change adopters. 2020 has been far from a positive year for many. But if financial industry and technology people are looking for a silver lining, it could be found in the results of this forced digital transformation. It will be interesting to see how much can be achieved through this accelerated change by this time next year. Download the full report below to find out more.

06 November 2020 710 downloads

Report

Payments Transformation: Immediate, Intelligent and Inclusive

The Finextra Annual Payments Survey Report 2020 in association with Fiserv. The pandemic has changed how we think about payments and the way people move and manage money. Not surprisingly, you see its influence in our payment trends this year. This year's Payments Industry Survey shows a change in focus, from the implementation of large infrastructure changes, such as instant payment systems, ISO 20022 adoption and open banking, to an emphasis on how those changes can drive value for payment users. The payment experience has become the focal point. Understanding how financial institutions can improve the services they deliver is central to the current direction of the payment industry. While COVID-19 has added impetus, the customer-centric, payment-user-first trend has been gaining prominence. Financial institutions are moving the discussion on from the provision of instant payments to focus on how they can bring value to the payment users as they interact. While the move to instant (real time) payments was a key trend identified in previous Fiserv payments surveys, as they become a reality, the attention is moving towards how they can be utilised to address the evolving needs of payment users and support payment users who traditionally use nonelectronic forms of payment. This year, the survey focused on two areas: The role that overlay services have in addressing the needs of payment users. Inclusion of all payment users in electronic payments. Download the report of the results from the recent Finextra Annual Payments Survey 2020, by Finextra & Fiserv, below to learn more.

04 November 2020 1139 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

Personalisation-as-a-Service: Harnessing Data in the Banking and Payments Industry

A Finextra Research Impact Study in Association with FICO and Amazon Web Services (AWS). As customers increasingly experience more consistent, personalised treatment from companies across a wide variety of industries, it is natural for them to expect—and require—the same of financial services providers. Consumers do not want disjointed experiences across auto loans, credit cards, and HELOCs any more than they want them when shopping for different categories within the same online retailer. Aside from consistency, 84% of customers revealed that being treated like a person, not a number, is important when winning and retaining business. That’s according to Accenture Global Consumer Pulse Research, which also found that 73% of consumers expect specialised treatment for loyalty and anticipate rewards for past interactions, as well as for sharing their preferences or personal information. However, only 22% believe that customer experiences are tailored effectively by organisations, and 50% fewer consumers perceive their bank as a trusted partner today than in 2018. Thus, there is a significant opportunity for savvy financial services companies who can meet consumer expectations. At the same time, financial institutions that fail to satisfy those standards are in jeopardy, as customers are re-evaluating their choice of financial providers given an increasingly diverse and non-traditional range of alternatives. Ultimately, consumers want financial providers to offer personalised services and integrated offers that address their most relevant needs at the right time, such as when they are buying a car, getting married, purchasing a home, continuing their education, etc. The financial institutions that can anticipate customer needs and deliver service that is personalised and consistent across channels will be well positioned to thrive in the digital age. Download your copy of the Impact Study below to learn more.

30 October 2020 526 downloads

Report

The Tipping Point of Cloud and Risk Management in Capital Markets

A Finextra Research Impact Study in Association with Numerix and Amazon Web Services (AWS). Capital markets firms are acknowledging that the cloud is a catalyst for establishing competitive advantage and the financial services sector has been taking steps to prioritise digital transformation. To meet customer requirements and remain competitive, financial services organisations must increase their agility, reduce time to market for new products and services, and address the spiralling total cost of ownership (TCO) of their IT infrastructures. Today, it is evident that all roads lead to the cloud. Download your copy of the Impact Study below to learn more.

05 October 2020 435 downloads

Report

Increasing Resilience in Collaborative Financial Services

Data is the lifeblood of every business. In the rapidly evolving ecosystem of financial services, the establishment of a robust and efficient cloud-based information management platform to govern this data is integral to a firm’s ability to remain resilient in uncertain times while building market share. While the financial services industry increasingly leverages the value of data, the way in which it is collected, stored and deployed is evolving to keep pace with customer expectation, regulatory demands and seismic innovation in technology. Collaboration between banks, partners, customers, or third-party providers represents a key shift in financial institutions’ approach to data, yet, ensuring the systems that are in place work to both protect and share data between these players is challenging to navigate. Building cloud-based information management systems from the ground up is often an unrealistic premise, particularly in financial services. Firms operate with pre-existing systems, and the reality remains that these legacy systems will build the backbone or springboard from which resilient information management systems will emerge. It is vital that firms understand the need to collaborate with external providers to extend the availability of this data across diverse hybrid environments if they are to effectively implement these technological advancements. Directives and regulations pushing banks to open access to their information assets puts a hard deadline on the calendar for such projects and means that those which act early can benefit from being first to market with solutions that not only meet compliance requirements but capitalise on new opportunities. Interoperability is a fundamental tenet of this collaborative ecosystem. It is the ability of financial institutions to work collaboratively with providers to deliver this type of efficient, secure and resilient data management platform which will determine their success in this new information-sharing climate. Download the full white paper below to find out more.

16 September 2020 84 downloads

Report

The Future of Fintech 2020

Disrupt, reset, re-launch. The fintech industry has evolved from competing and collaborating with banks and has now entered a new era of partnerships, with those at the forefront of digital transformation prioritising technology and legacy participants working with new financial players. In addition to this, traditional financial institutions are partnering with challenger banks to provide refined products and services that attest to putting the customer first. However, questions have been raised about how an alliance with a neobank would be preferable to a merger or an acquisition. The concept of a ‘challenger bank’ will also be examined in this report, and why, after years of development and progress, it has become difficult to differentiate between the vast number of neobanks in the industry because their offerings are vastly similar. Finextra’s The Future of Fintech 2020 report will explore how banks have embraced innovation and what benefits have emerged from establishing technology initiatives, partnering with neobanks and investing in fintech firms. Further, the report explores what and how the industry should behave in the face of a crisis and how to bounce back stronger than ever. We will also consider whether customers would benefit from financial institutions merging all their services onto one application as the digital age welcomes the platform ecosystem, which has seen success in Asia and is being gradually implemented in Europe and the US. Download your copy of the report now.

03 September 2020 960 downloads