Finextra Research: Latest fintech news, analysis, interviews, features and opinion by industry experts

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Top Global Banking Technology Trends

Against the backdrop of an increasingly digital world, banks are facing growing competition, in many cases from non-traditional players, which puts greater emphasis on the need to innovate whilst simultaneously transforming their businesses- all the while keeping an eye on the bottom line. The effect of these imperatives on banks’ IT systems, infrastructure as well as go-to-market strategy is further complicated by regulatory compliance – particularly around opening-up market access to enable greater competition, eg. KYC, AML, PSD2. This research paper produced by Finextra, in association with Virtusa, examines and analyses how banks are responding to these significant changes in their market by identifying the top 10 banking technology trends for 2019.

14 August 2019 1396 downloads

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The Future of Banking is Open

The open banking dialogue has at last moved on from compliance concerns and turned to what opportunities, as well as challenges, exist for banks. 2019 could be the year that open banking takes hold but only if banks are able to deliver value-added, premium services via application programming interfaces (APIs). These tools are still in their early stages of development but through robust testing, more standardisation, intelligent use of data and partnerships, banks can develop services that both enhance the user experience and generate new sources of revenue. Banks should be looking at what valuable services they can actually charge for, what services go beyond data capture and money movement and involve new lines of revenue – from online FX wallets to digital banking. They should also look at areas such as corporate banking that are ripe for disruption given that the current dashboard services on offer are typically basic and static. Download this new whitepaper from Finextra, in association with Token, as we explore the shift towards ‘premium’ API-driven banking culture, what drivers and challenges are shaping the developments, and what the new wave of open banking products and services might look like.

29 July 2019 1192 downloads

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Interconnection and the speed of change in the Nordics

There has been a consistent focus on digital transformation within the Nordic traditional financial services industry. This paper, produced by Finextra in association with Equinix, explores how interconnection and collaboration can help banks successfully navigate digital transformation and secure competitive advantage within the Nordics, and indeed any banking ecosystem. In 2018, through an online survey of over 100 expert financial services professionals, and a series of one-to-one interviews with senior bankers, our previous paper laid out key issues and opportunities faced by banks over the next five years. This paper builds on this survey to examine why the Nordic region is unique and how the area has embraced digital innovation, while also maintaining traditional banking ideals. It will also point to where challenger banks stand in the Nordics, how this relationship will play out and how the data conundrum is being dealt with amid the wave of digital payments.

23 July 2019 410 downloads

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Utilising AI to Prevent Financial Crime

The convergence of open banking, data protection regulation, digitalisation of services and advancement of technology and artificial intelligence has caused profound and prolific changes to the financial services industry. It has also opened new doors and fresh opportunity for fraudsters, who are equally taking advantage of new technologies and the reams of data that now exists in the banking ecosphere. Keeping transactions secure as financial organisations move into a world of open banking is a race that gets faster by the launch of a new banking API. Risk management, cyber security and fraud strategists need to collaborate to stay ahead of the competition, while addressing the needs of the new digital customer, which includes the hefty task of protecting their data. Questions about liability in multi-party transactions and ever-increasing systems and protocols abound, as businesses transform to an end-state not yet known. New attack vectors in transactions and account opening come to the fore on a daily basis. How can banks utilise Machine Learning (ML) and AI in the fight against fraud in this real-time and fully digital marketplace With the emergence of open source technology, is there scope for data sharing to arm organisations with real-time information and anomaly detection? Could business functions communicate better internally to support the fight against fraud? This research paper by Finextra, in association with Feedzai, gathers the views of several senior data science and fraud experts from across the financial services industry on how to tackle fraud with AI as open banking and digitalisation continue to evolve.

09 May 2019 456 downloads

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UK Open Banking APIs Performance Analysis: 2018

The report examines the performance of the UK's CMA9 group of Open Banking APIs in 2018. The purpose of the report is to establish a methodology and benchmarks for measuring API performance. With a wave of API-based services and business models transforming financial services in many markets, the dependency on service quality of APIs will become critical to banks, fintechs and, most importantly, to both consumers and business customers. The 28 page report details the API performance of 11 major UK banks across a variety of technical performance measures through 2018. The report includes APImetrics proprietary Cloud API Service Consistency (CASC) scores for all 11 banks. CASC scores are derived using APImetrics active monitoring platform, which gathers data from up to 75 locations worldwide on four clouds. Additionally, the report details the comparative performance of AWS, Google Cloud, Microsoft Azure and IBM Cloud. The report is researched and written by the consulting team at APImetrics and published in partnership with Finextra Research.

03 May 2019 904 downloads

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Could a Unified Approach to Digital Identity Disrupt the Banking Industry?

Digital identity - the body of information or unique identifiers and user patterns that detect individuals online and on their devices – could become the most valuable commodity for the citizens of the future, said Google Chairman Eric Schmidt back in 2013. It is also a source of both huge opportunities and significant challenges for banks and other financial institutions. Banks must ensure they are able to correctly verify identities, have control over how the information is used and ensure that they provide the right service to the right person in the right context. But should banks be able to meet these challenges, the benefits are clear – greater volumes of customer participation and transactions, the ability to generate and access huge volumes of data, and the chance to create a more seamless and intuitive customer experience. Could a unified approach to digital identity disrupt the banking industry? And could it also be the key to enhancing the customer experience? This research paper, produced by Finextra, in association with Ping Identity, seeks to address these questions and more, by speaking to the identity managers at leading institutions for their views and bringing to the fore a major aspect of the change afoot within the global banking industry.

02 May 2019 606 downloads

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The Missing Link in Re-Mapping Ecosystems

What are the issues for fintechs or challenger banks straddling the constraints and opportunities of PSD2 and the opening of the retail banking market? Fintechs, who have been given an open goal in the wake of PSD2 have their work cut out to align themselves to large financial organisations in order to make the most of the opportunities afforded. When the end state is not known, and there is a dearth of clear examples of ecosystems in which banks, corporates and smaller third parties can come together, it poses a very difficult challenge to get it right. At an exclusive roundtable hosted by Finextra in association with EPAM, prototyping language was one key mistake highlighted by a delegate on the part of fintechs looking to connect and partner with large banks. The example given, which was not the first of its kind, was that the prototyping language is a potentially overlooked point of failure. Neither robust, sustainable nor repeatable, it signalled an early death knell for any future potential. Download the full paper to find out more.

10 April 2019 419 downloads

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The Future of Personal Identity

2018 saw the implementation of the General Data Protection Regulation (GDPR) across the European Union and European Economic Area and subsequently in the UK, a new version of the Data Protection Act (DPA) was enacted. Despite this new wave of regulation, lack of security in new technology may call for yet more standards in the future. Technology providers, financial institutions and governments are all being closely scrutinised following a year of substantial data breaches and compromises of trust. Most notably the Cambridge Analytica and Facebook scandal, has resulted in the marketplaces in the US and UK looking to learn about best practices and innovation from other countries. This report on The Future of Personal Identity analyses the advantages and disadvantages of private, public and federated identification systems and whether industry leaders believe that banks are in the best position to provide trusted authentication services.

18 March 2019 534 downloads

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Key Drivers, Emerging Trends and Developments in Corporate Banking

In seeking to serve the ever-evolving and increasingly global needs of their corporate customers banks face a diverse and complex set of challenges. At the heart of these is the issue of how banks can remain relevant to their clients in a world in which their regulators are opening banking to new competitors who are both agile and powered by the latest technologies. The response of banks to these challenges is the adoption of a new and transformative approach, focused on supporting their corporate clients on an end-to-end basis on all their customer journeys. Through the development of new financial ecosystems supported by innovative new capabilities (such as Virtual Accounts, Artificial Intelligence and Blockchain) banks seek to give their clients speedy access to the information, insight, cash and credit they need to maximise the efficiency of their business operations on a global basis. In developing their strategic responses banks are increasingly moving away from their legacy approach to IT development based on a combination of inhouse build and / or purchase from traditional vendors, toward partnering with often relatively small specialist fintech providers. This research paper produced by Finextra, in association with Oracle, analyses these key market drivers and emerging trends and developments, bringing to the fore major aspects of the transformation of corporate banking.

11 March 2019 664 downloads

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Cyber Security in Financial Services: Orchestrating the Best Defence in an Evolving Threat Landscape

Data, IT and business security have always been paramount for financial organisations. But in an increasingly digitised world, more data is being produced faster than ever. Financial organisations are encouraged to share customer data while at the same time being expected to safeguard it with progressively stronger measures. Data they are responsible for often resides outside their organisation and can be accessed by a multitude of systems and devices. In 2018 the World Economic Forum (WEF) surveyed more than 12,000 executives around the world about what they considered to be the biggest risks to doing business, ranging across political, societal and technological concerns. Cyber-attacks were considered the number one risk by executives in Europe and advanced economies. Financial Services has been, and continues to be, a targeted sector, and cybercrime is becoming sophisticated on an industrial scale. A more strategic and wholesale approach needs to be adopted industry-wide to fend off the threat, particularly as detection and response times are increasing. Download this new paper by Finexra and ServiceNow to find out more.

27 February 2019 444 downloads

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Roundtable insights

Finextra Research, Finastra and Microsoft held exclusive breakfast roundtables in Munich, Paris and Stockholm which explored how the payment sector is developing payment services to the corporate and retail markets. The discussions, held under Chatham House Rule, explored how factors such as instant payments, open banking, fintechs and payments infrastructure are impacting banks and how banks can compete and remain relevant. Download the paper to learn: How factors such as instant payments can disrupt fintech, and whether the German banking sector can adapt to the European pace of development. How open banking, immediate payments and fintech disruption are impacting banks in the Nordics, where the rapid pace of development is leading the industry. Future requirements for customers, how cloud technologies can lead to new business models, and how banks can compete

06 February 2019 627 downloads

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Putting Data to Work in the Digital Economy

At this year's Sibos in Sydney, technology and data were again the two key recurring themes identified as critical to enabling and propelling the future of financial services. The difference this year was in two areas. Firstly, the intense focus on integrating technology into the business to save costs and generate revenue especially in the area of advanced analytics and artificial intelligence (AI). The second key difference was the concern around global geo-politics – globalism versus nationalism – and its impact on data movement and data access. These challenges and the takeaways outlined in this paper highlight the need and the sense of urgency to develop a new business architecture for financial services that is flexible, adaptable, open and future proof. The business architecture needs to span all aspects of the organisation across infrastructure, data, process, people, and culture, and it will set the stage for data-driven digital transformation.

20 December 2018 544 downloads

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Fraud Detection: Embracing New Technologies for Frictionless Payments

Payments fraud is a significant challenge for banks and is set to become more problematic as payment channels and payment services providers (PSPs) proliferate, regulation reshapes the way payments are transacted and the world migrates away from cash towards electronic, often real-time, payments. In Europe, the revised Payment Services Directive (PSD2) allows third party developers to directly interact with a partner banks’ customers, raising questions about the use of customer data by the third parties and extension of the security boundaries. This trend towards open banking is being adopted elsewhere in the world, including in Australia, the US and Hong Kong. In the increasingly networked ecosystem of payments, identifying fraudsters will be a challenge, but under PSD2, financial institutions are required to monitor all transactions for fraud-related activities. The traditional, silo-based approach to fraud detection is fast becoming obsolete. For too long, banks have lagged in their ability to align fraud detection with the speed of transactions as payments move away from cash towards CNP (Card Not Present) transactions. The financial industry is shifting towards real-time data analysis, deploying artificial intelligence, machine learning and Cloud capability to transition towards a digital ecosystem. Banks must ensure they stay ahead of the increasing technological threat from criminals and fraudsters.

30 November 2018 841 downloads

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The Critical Change You Need to Make to your Customer Engagement Strategy

Retail banking is currently undergoing a period of unprecedented disruption from a combination of new market entrants (challenger / digital banks and fintechs), demanding tech-savvy customers, regulatory change and the need to focus on cost reduction and efficiency. Additionally, there is a growing customer perception that banks are no longer relevant to their daily lives. This paper, produced by Finextra Research in association with Diebold Nixdorf, identifies the key challenges of a new future-proof strategy for retail banking and provide practical examples of what banks around the world are doing about them. The paper is supported with insights and information obtained at DN’s International Management Seminar 2018 (IMS 2018), held in Lisbon on 8th – 10th October and titled ‘Revitalise Retail Banking Agility - Embrace the Larger Ecosystem’ and contains 13 videos and multiple real cases from leading banks including BBVA and BPI. Drawing on presentations given at Diebold Nixdorf International Management Seminar by a diverse group of top bank executives, the paper explores the following themes: The key market trends forcing banks to accelerate their pace of change The need to create seamless consumer journeys that transcend a single physical or digital channel The agile innovation approaches and new philosophies on operational excellence and service delivery that are driving successful transformation programmes in real-world settings How the ultimate prize for a bank is to use regulatory changes such as Open Banking and PSD2 to position itself at the centre of a Connected Commerce ecosystem comprising a variety of partners – assuring the bank’s continued relevance to the key journeys of their customers.

27 November 2018 755 downloads

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Clearing and Settlement: The new battleground for payments innovation

There is significant innovation and competition afoot in the world of payments initiation, driven by consumers and corporates on the demand side, and traditional banks, fintechs and challengers on the supply side. This is mirrored by what can reasonably be called a revolution in the world of clearing and settlement. Real-time / instant payments, blockchain and distributed ledger, new solutions to the old problems of cross-border correspondent banking, and many other initiatives all have the potential to transform how payments are processed, cleared and settled. Financial institutions therefore need to find ways to provide compelling business services based on new methods of payment initiation and novel customer experiences, while keeping pace with the multiplicity of back-end clearing and settlement options – all while managing costs, staying ahead of compliance, and growing market share.

12 November 2018 952 downloads