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

Survey

Definitive Differentiators - Forging a future-proof payments model

Over the last few decades, banks have been forced to reconsider their business model for transaction services. During the era of low-interest rates, the focus shifted to transaction revenues, and while the pendulum is now pivoting back to utilising the balance sheet for revenue growth, the amount of new regulations impacting the industry is ever-increasing. New technology and market regulation have fostered innovation and new market entrants. This “perfect storm” is exposing a number of potential threats for banks, but also new opportunities to expand the share of customer wallet and time to market, and drive cost efficiency through standardization. This Finextra survey report, produced in collaboration with Tietoevry, explores the key factors driving changes to payment models for different financial institutions and how they can wield continued or differentiated success in the evolving landscape.

18 March 2024 440 downloads

Impact Study

APP Fraud Liability: A Guide for Banks

Fraud is running rampant. The UK Government's 2023 'Fraud Strategy' report highlighted that fraud now accounts for over 40% of crime, yet receives less than 1% of police resources. More needs to be done to ensure that the consumer is protected. This is why, as per the Financial Services and Markets Bill, all PSPs will now be required to reimburse fraud victims from October 2024. In light of these upcoming changes, banks need to reassess how they manage liability associated with APP fraud and develop new methodologies in order to investigate and mitigate fraud more effectively. This Finextra impact study, produced in collaboration with Form3, gives banks a guide to tackling the new APP fraud liability landscape. It highlights: Risk scoring payments Implementing the right intelligence Considering false positives Ensuring explainability And more.

06 March 2024 459 downloads

Impact Study

8 Steps to Efficient Transaction Fraud Monitoring

In the wake of the widespread shift to digital banking and ecommerce, fraud teams have seen a sharp increase in card transaction fraud. Since 2014, card transaction fraud has increased by an average of 8.9% per year and exceeded $32 billion in losses in 2021 alone. In an increasingly complex threat environment, card transaction fraud has devastating consequences for banks and merchants alike. Technologies like cloud, artificial intelligence (AI) and machine learning (ML) pave the way for innovative fraud solutions. Yet, in order to effectively deploy these tools, banks need to address their underlying risk strategies, technical infrastructure and the quality of their available data. This Finextra impact study, produced in association with Brighterion, a Mastercard company, explores the eight steps for banks to reach transaction fraud monitoring excellence. Download today to learn more.

08 February 2024 517 downloads

Sentiment Paper

Payments: The key to unlocking new ecosystems and why merchant services are on the up

To say things have changed in payments, and, as a result, the merchants services space is to understate a dramatic and fast-moving digital and cultural evolution that has driven such change. Digital payments have enabled the establishment of hundreds of merchant businesses, particularly in developing markets, as well as the significant growth of global ecommerce. This Finextra Research report, in association with Ingenico, explores: How banks and acquirers have adapted to the digital frontier; The importance of data-driven business services; Why the Point-of-Sale is the ultimate channel for digital success; What will be the key tenets of the payments ecosystem in the next five to ten years; And more. Download our sentiment paper today to discover more.

06 December 2023 659 downloads

White Paper

How can the future state of information technology combat fraud and money laundering?

Modernisation programmes, digital service proliferation, client demand and advancing technology are all shaping the evolution and the future of financial services. Real time is the order of the day, and while real time payments come more and more to the fore globally, payment providers need to get up to speed in being able to offer them to their clients and end users, but also to ensure they are deployed and implemented in a fully robust, resilient and secure environment. With real time payments comes real time fraud and the opportunities for value on both sides of the fence is eye-wateringly vast. Firms cannot afford to have payments held up by authorisation checks, fraud and AML controls and yet at the same time the sheer amount of information that should be processed with any given payment in order to scan, approve and hence protect against fraudulent or nefarious activity is great. Institutions are allocating more and more to defend against financial crime and this is at the same time good news and bad news for them. Being smart about such allocations means minimising the resource and disruption presented by legacy systems and instead working around them. Download this Finextra whitepaper, produced in association with Hazelcast, to learn more.

02 November 2023 386 downloads

Future of Report

The Future of Digital Banking in North America 2024

2023 was characterised by increasing amounts of uncertainty and a lack of clarity across the financial world. The collapse of banks, including Silicon Valley Bank, Signature Bank and First Republican Bank, in March 2023, added strain to already unsettled financial markets. While market volatility has remained relatively stable, soaring inflation and climbing interest rates slowed economic growth and this is expected to continue into 2024. While forecasts regarding the length and severity of a possible recession are speculative, experts are even more divided about stock market predictions for 2024. Optimism is strong in many investors who expect that 2024 is the year rates will stop rising and predict bullish turns that will see markets soar to new heights. Yet with many other factors affecting North American markets, the only certainty we can expect as we look towards 2024 is more uncertainty. This Finextra report on the outlook of North American banking trends, is produced in association with Money20/20 and includes key insights and commentary from industry experts at EY and Mastercard.

23 October 2023 718 downloads

Future of Report

The Future of the Global Financial Ecosystem 2024

A Sibos Special Edition. Our world has experienced several unexpected and unprecedented events over the last few years, which show no signs of slowing down. This year’s Sibos aims to connect those in the financial services community who have experienced fragmentation, in the hope that tackling this will help with some of the biggest issues facing banking. The role that financial institutions play in the global environment will continue to be placed under the microscope as situations continue to develop. In light of this, there has never been a better time for those in finance to come together and have frank and open conversations about their future. This applies to not only environmental and social goals for banks, but also the adoption of and adaptation to new technologies. No longer can these issues be placed on the side and given lip service, they need to become an integrated part of each financial institution’s core policies and practices. However, ever increasing this challenge are the continuously changing global circumstances. Due to these circumstances, communication and collaboration are essential drivers for 2024. This Finextra report, produced in association with Swift, includes commentary from BBVA, BNP Paribas, BNY Mellon, Deutsche Bank, ING, JP Morgan, Lloyds, McKinsey, NatWest, SEB, Standard Chartered, UniCredit, and Wells Fargo.

07 September 2023 1031 downloads

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 189 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 1152 downloads

Report

Onboarding, KYC, and Digital Identity: the Bottom Line

Technology is continuing to evolve at a fast rate. Consumers have evolved and now expect a digital onboarding process. This presents an opportunity for banks because enhanced customer onboarding can boost a bank’s retention rate. It is the first interaction that a customer, instead of a prospect, experiences and if conducted correctly, it can lead to multiple purchases and build customer loyalty. Regardless of how seamless the process is for a customer to be onboarded, it is only revenue that will result in a return in investment. While automation can supplement an excellent customer experience, nation-wide digital identity schemes can also improve the process. Across the world, governments have played an important role in helping set the scene for digital ID solutions, but a government-only solution is unlikely to be successful. Banks, fintech firms and technology providers must collaborate to ensure identity solutions are utilised. However, while customers want an easy onboarding process, organisations must capture, validate, and monitor customer identities — without increasing customer friction. Taking collaboration further, within the organisation, digital transformation, risk management, data security, and compliance teams must put best practices in place to balance digital onboarding with fraud prevention. This Finextra impact study, produced in association with VeriPark, explores how despite the emergence of digital channels, onboarding is still occurring in a fragmented manner.

10 August 2022 805 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 1740 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 1075 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 458 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