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

Report

Fintech, ESG and IFCs: Embedding Sustainable Business Models

A Finextra Research Impact Study in association with Jersey Finance. While the landscape for financial services is currently being re-shaped by the twin trends of digital technology and the rapid rise of sustainable finance, leading international finance centres (IFCs), always nimble and adaptable, are seizing on the opportunities. Close analysis of these trends highlights an even more significant intersection at play with both these mega trends converging symbiotically, leading to fintech playing a part in the scaling up of sustainable finance, while the latter in turn accelerates innovation in fintech. Adoption of AI is improving the ability of financial service providers in leading jurisdictions, such as Jersey, to meet compliance needs, while also driving down process costs that might act as a barrier to sustainable finance. Equally, the growth in sustainable finance leads to greater demands for fintech solutions, adapted to the specific needs of IFCs. Evidence of these major trends and their impact on IFCs are included in the findings of this latest Finextra report, a study which Jersey Finance is pleased to support. As an IFC facilitating cross-border investment through our expertise in areas such as fund governance, fiduciary and administration for private wealth, we are focussed on enhancing our capabilities in the digital space, while sustainability is already integrated into our core offering. Furthermore, this symbiotic convergence is becoming a notable factor in firms’ service delivery within Jersey’s financial ecosystem. Firms such as Apex and IQEQ are tailoring their fund solutions to include new data-driven propositions, developing new tools that deploy the latest technologies to collect, evaluate and report ESG data. Sustainable finance solutions like this are seeing strong take-up by managers, keen to meet both the growing investor demands for transparency on the impact of their portfolios and to streamline their regulatory compliance under emerging frameworks, such as the EU’s Sustainable Finance Disclosure Regulations (SFDR). It’s clear IFCs have a vital role to play during this global transition and leading jurisdictions such as Jersey, with long standing expertise in supporting cross-border capital flows and a flourishing fintech cluster, can call upon both these strengths as we gravitate to a more sustainable future. Download your copy of the paper below to learn more.

06 May 2021 290 downloads

Report

The Cloud-native journey - Why Hybrid Cloud and Open Source go hand-in-hand

The financial services industry has been turning to cloud services and technology in droves to accommodate the pressures, security demands and cost savings of digital transformation projects, as well as regulatory compliance priorities. To become and remain agile, financial organisations must move beyond legacy practices, particularly when the speed of change in the industry is at such an all-time high and accelerating. Variants in cloud technology have quickly emerged leaving financial services organisations with choices far beyond mere public cloud solutions. Security and availability demands have led many institutions to continue to rely on private cloud deployments- those within the organisation’s security perimeter or firewall. While at the same time, managed cloud services and Software-as-a-Service options have increased the number of public clouds organisations are using. Other factors such as regulatory requirements mean financial services firms need to not only keep certain data within a certain geographical location but also should review the risk associated with relying on only a single cloud provider. Compounding the regulatory challenges, the advancements and innovations around 5G and IoT are leading to new levels of edge computing, with corresponding cloud requirements. As a result of this proliferation and the arising complexity from multiple clouds, as well as the need to have enterprise-wide management thereof, banks and FIs have needed to move away from a single cloud strategy and utilise a hybrid cloud and platform approach and a cloud-native mindset. From a business, security, risk and operational standpoint, the stakes have simply become too high not to be hybrid. Download your copy of this Finextra white paper, produced in association with Red Hat, to learn more.

19 April 2021 321 downloads

Report

Sustainable Finance Live - Reimagining Risk Modelling ESG Solutions

A Visual Record from the Sustainable Finance Live workshops 8-9 December 2020. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event focused on real-time forward-looking measurement of climate change and nature loss to address transitional and physical risk, following a lean back, lean in and learn by doing model. The workshop detailed how alternative data from sources such as satellites and sensors can augment traditional risk systems and provide insights for the future of sustainable financing. Diving deep into the practical challenges of risk management, the sessions considered using alternative data to inform credit decisions, with speakers providing advice on how to embrace sustainable finance. The interactive forum welcomed a set of cross-functional skills from individuals spanning the technology, business and finance sectors. Initially taking a generalised approach to understand reporting across ESG finance sectors, it became apparent that specific use cases were needed. Richard Peers, founder of ResponsibleRisk and contributing editor for Finextra Research, outlined the key questions for the event: What are the issues and opportunities for risk management working with alternative data to inform credit decisions? How can these decisions be quantified against physical and transition risk? With a top-down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: Using alternative data to inform physical and transition risk How satellite and sensor data can provide insights for investment and governance professionals Plotting the steps to resolution of existing problems and mainstream use of data Identifying how to prevent lack of proper pricing of ESG risk Download the full report below to find out more.

16 April 2021 71 downloads

Report

Adapting to a shifting Cards Landscape

Identifying opportunities for Issuers. The payment cards industry has changed dramatically in recent years, with new technologies and regulations spurring innovation and lowering the barriers to entry for issuers. Meanwhile, there has been a shift to digital payments, which has created opportunities for bank and non-bank issuers alike. Card payment volumes have been growing, and the world’s standout region is Asia Pacific. China is the star performer, and the number of cards in issue is staggering. And while digital wallets such as Alipay and WeChat Pay have pushed the growth of mobile payments in China, cards have a key role to play. Similarly, in Africa, where mobile money services like mPesa have been hugely popular, there is still a role for payment cards in the rapidly developing markets. Cards are also in demand in other regions. In Europe, the most recent figures from the European Central Bank show an increase in the number of payment cards issued. So far, there has been a reported shift to digital payments in various markets, such as the Middle East, and even the least internet-savvy consumers have changed their spending habits and are now shopping online. In the physical world, contactless - both on smartphones and cards - has been successful in providing convenience for cardholders in stores. Additional innovations have attempted to make it even easier for customers to tap and go. Card programmes have become increasingly cost-effective, especially for issuers who are unencumbered by legacy systems. With on-demand digital printing, for example, cards can be personalised and issuers can order a smaller print run for smaller customer segments as they are needed – such as fans of a football club – rather than committing to a large batch upfront. Download your copy of this Finextra white paper, produced in association with FIS, to learn more.

14 April 2021 626 downloads

Report

The Future of Cloud 2021

Evolving the Financial Services Industry. As consumers have come to expect the same experience of their financial services providers that they have elsewhere in their lives, traditional financial institutions (FIs) are increasingly looking for ways to improve customer service and deepen engagement. For many, optimising the digital experience for customers is a priority. From leveraging omni-channel communication strategies to creating more personalised experiences, the goal is to deliver the right message, at the right time, in the right channel. Fintech firms have been faster to innovate. Many, in fact, were created to address consumer dissatisfaction with traditional financial services providers. However, many players across the banking, payments and capital markets industries such as Barclays, Broadridge, Capgemini, Calypso, Collibra, DBS, FICO, Fraud.net, Global Payments, HSBC, IHS Markit, Kx, Mambu, Nasdaq, Numerix, OakNorth, Singapore Exchange, Solarisbank, Standard Chartered and Trading Technologies are increasingly turning to the cloud as a way to accelerate their digital transformation for customers. Shifting away from legacy infrastructure reduces time and resource constraints and financial institutions can innovate and respond to customer needs with the cloud. Banks, payments services providers, and capital markets firms must take advantage of the cloud’s greater elasticity, flexibility and cost-effectiveness. Download your copy of the report below to learn more. Part of the Finextra Cloud Series, in association with Amazon Web Services (AWS).

26 March 2021 850 downloads

Report

Corporate Onboarding: Will it become a competitive differentiator for banks in a real time world?

The way in which banks onboard corporate clients can impact many aspects of their business, from reducing time to revenue, to improving customer experience and loyalty, and to compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. The accuracy of data used for onboarding customers is therefore a key differentiator for banks. Relying on primary source data that is legally compliant contributes to compliance peace of mind, while banks can make better decisions based on compliant data that is 100% accurate and continuously updated. This is particularly important in the world of corporate onboarding, where vetting a company can be time and resource heavy, and a complex task with many moving parts. Accessing regulated and authoritative data from company registries to onboard a client in a timely manner is a complicated process that involves a series of manual checks. There are continual updates to regulations to comply with, such as the requirement for ongoing monitoring within the 5th Anti-Money Laundering Directive (5AMLD) as well as due diligence in ensuring that company data for KYC checks is up to date and accurate. From a business perspective, banks are keen to onboard new customers as quickly as possible to maximise income and profit. An efficient process can also be a crucial differentiator in procuring loyal clients for a lifetime of service. Expectations for a real-time experience are growing in the corporate environment, just as they have in the world of retail and consumer banking. This white paper explores how banks can deal with changing KYC regulations and the incoming 6AMLD; what technology can be utilised to assist banks achieve seamless corporate onboarding; and what stands to be lost, and more significantly, to be gained, with a seamless real-time onboarding experience. Download your copy of this Finextra white paper, produced in association with Kyckr, to learn more.

16 March 2021 758 downloads

Report

The Future of Regulation 2021

Resetting the rulebook for 2021 2020 was a year of rule-breaking, 2021 is the year to reset the rulebook. Unable to grow unchecked, the regulatory framework within which innovation has been trying to flourish has shown its creaky joints, ill-equipped supervisory mechanisms and outdated mindsets. Yet, despite early concerns and predictions that Covid-19 would hinder progress across the payments landscape, the monumental shift toward reliance on digital payments has instead lit a fire under financial institutions and the regulators which oversee them. The pandemic presented unmatched challenges to the global economy, including the provision and regulation of digital financial services and fintech activities across both advanced and emerging economies, but innovators were quick to pick up the reins, and presided over a proliferation of tools and products catering to those most in need. Open banking continues to evolve, and as Open X takes hold, the obligation to place consumer protection at the heart of this growth is evidenced in the implementation of the Second Payments Services Directive’s (PSD2) requirement for Strong Customer Authentication (SCA). While financial services remain challenged with ever more malicious cyber threats, AML and fraud regulations are clamping down on crime. The deployment of sophisticated technology is also increasingly being used to identify and quash threat-actors, and particularly in the case of LIBOR’s cessation and ESG objectives. Delving into the key industry-shaping regulatory updates for 2021, the Future of Regulation sets out the insights of leading industry players including Accenture, Clifford Chance, JP Morgan, Mollie, NatWest, Oaknorth Bank, Shearman & Sterling and TrueLayer. Download your copy of the report below now to find out more.

08 February 2021 838 downloads

Report

Solving onboarding - The catalyst in creating a unique end-to-end client relationship

Financial services firms are on a digital journey across the globe, and some parts of this journey have been more seamless than others. Firms are increasingly aware that streamlined, pain-free onboarding builds the foundation for a successful client experience throughout the duration of a client’s lifecycle. Primarily, a digital experience adds convenience and competitive service for the client. Despite ranking highly on the agenda for all financial institutions, not all firms have been able to achieve a fully digital onboarding process. A ‘userfriendly and frictionless’ onboarding experience may be the ideal, but it means overcoming great technological, infrastructural, cultural, regulatory and commercial hurdles to achieve it. This research report by Finextra, in association with Box, is based on several leading industry voices on the subject to explore the current status of onboarding digitisation journeys. Experts share their insight on the current status of onboarding projects and why the need to evolve is more important than ever. The paper explores how onboarding pain points are increasingly frustrating digitally-native clients, the role that data and information management play in meeting smooth onboarding goals, and efforts being made towards what the industry describes as onboarding nirvana, based on a 360-degree view of the client. Download your copy of the Finextra industry sentiment report to learn more.

27 January 2021 766 downloads

Report

The Future of ESGTech 2020

Finding value in the data web of sustainable finance. While environmental, social and corporate governance considerations have always been a matter of importance for financial institutions, there is now greater scrutiny than ever of the ESG impact of assets, investments and lending. The adoption of United Nations’ 17 Sustainable Development Goals (SDGs) in 2015 formed a framework for sustainability in the global economy, setting out aims to reduce poverty and hunger, promote good health, wellbeing and education and protect biodiversity and the climate. SDGs do however present complexities given their wide scope and the difficulties in addressing them in equal measure. Additionally, new and different public pressures can develop such that the priorities of businesses and economies are forced to pivot as the global backdrop does. It has been commonplace in recent years, for example, for the World Health Organisation to label climate change the greatest risk to human health around the world. This now seems a debatable summation given the events of 2020, and it is likely that the threat of pandemics and poor health will receive greater attention in the years ahead. The benefits for financial institutions of undertaking ESG-driven activity are well understood but remain clouded in uncertainty due to unknown risk and reward. They, therefore, need practical solutions to work to sustainable goals that can help to bring returns while also delivering positive environmental and social impact. Initiatives that enable this are emerging in the worlds of innovation and technology that harness the data that financial institutions have at their disposal to deliver additional value for clients and stay relevant in a constantly evolving space. However, there remain many unanswered questions about the standardisation of data to make it digestible for firms across the industry, how the user experience of reported data can be transformed to improve knowledge of risks and opportunities and what role technologies such as AI and blockchain can play. This report sets out to answer those questions. Finextra Research has combined opinions and commentary from sustainability experts at Citi, Standard Chartered, BNY Mellon, Moody’s, HSBC, Latham & Watkins, Tandem Bank, and BBVA with original insights and analysis to explore the tools and processes that can assist organisations in developing their ESG offering and driving growth through meeting sustainable goals in the years ahead. Download your copy of the report below now to find out more.

21 December 2020 424 downloads

Report

Managing Compliance and Growth

For banks large and small there is no question about the sheer volume of transformation pressure currently at play. Regulatory changes on the increase, various migration deadlines to implement amid the general shift to real time means that mere survival in itself can seem like a win. More is required of organisations who want to differentiate and compete for and retain the customer’s attention. When risk awareness plays a crucial role how can banks start to carve a safe and secure route to innovation at a speed which meets market demand for new and intuitive services? For smaller and newer organisations, arguably it is easier when they don’t have legacy constraints and are more attuned to the benefits and possibilities of emerging technologies. But as they strive to diversify and grow their volumes, they are often blindsided by the associated risk and indeed the threat of suffocating a start-up culture. Becoming consumed by the here and now and not being able to see the woods for the trees is an all-too-familiar theme for many medium-sized banks. Being able to establish and refine their own agile way of working so they can learn fast and grow fast is key. But when one size does not fit all in terms of scaling projects, it becomes very difficult to take the reins on their own unique journey of growth. This research paper by Finextra, produced in association with Finastra, is based on several interviews with small and medium-sized banks, garnering their perspectives and experiences in their efforts to grow and scale while managing compliance and all that goes with it. Download your copy of the Finextra industry sentiment report to learn more.

14 December 2020 354 downloads

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

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 465 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