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

Report

Mainframe to Cloud: How to shift applications

The shift to the cloud The financial services industry is increasingly turning to the cloud to resolve challenges involving the movement of money. However, some banks, payments providers, capital markets firms and insurance companies are still questioning why an accelerated shift to the cloud is required. Further, what are the conditions, circumstances and considerations that should be taken into account when looking to migrate applications? It’s not just about technology. It’s about culture and the talent that is needed to transform from a legacy-based infrastructure and deal with a more agile method of operating and collaborating with partners in a cloud environment. This generational repositioning should be managed in an efficient manner to facilitate a successful, safe passage of moving from one domain to another. The mainframe, or the central repository, in an organisation’s data centre is usually linked to its users through workstations or terminals. Although the presence of a mainframe often implies a centralised form of computing, they are in dire need of modernisation. Those with awareness of how to transform the mainframe, how to consume the cloud, and who are able to to establish a strategic blueprint for their digital transition will be better positioned to retain their customer base. Each financial institution will have a different journey to the cloud: some will opt for a hybrid model, others will transform with the cloud or to the cloud. Mainframes present vast opportunities, but the time has come for the self-written applications and the mainframe-based business processes to be modernised. To explore these opportunities, specialists gathered for a Finextra webinar, ‘Mainframe Modernisation: The cloud shift’, that was hosted in association with Deloitte and Amazon Web Services (AWS). The webinar panel looked to discuss how mainframes can provide mission critical functionalities for financial institutions and the very specific challenges that come with modernising mainframes. This event report outlines the findings from that session.

05 September 2022 331 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 808 downloads

Report

Rebundling: The Next Stage of the Fintech Evolution

The next stage of the fintech evolution is rebundling. At the core of the industry, the catalyst for fintech evolution has continued to be disruption and innovation, but not one banking or financial services issue can simply be resolved with only disruption or innovation. After the global financial crisis of 2008, it would have been unusual to have more than one or two banking relationships. However, the emergence of an open playing field, and with the application of the Second Payment Services Directive – more commonly known as PSD2 – across Europe, non-financial businesses were able to leverage open banking and open finance initiatives to offer financial services directly to their customers. This, in turn, widened the competition and resulted in the birth of fintech businesses that each focused on attacking one part of the banking value chain – be it payments, lending, FX, or another type of offering. Slow, complex, and expensive processes were no longer the status quo; and alternative players started to disintermediate the incumbents. These new entrants increasingly became popular because of their intention to improve customer experience and provide better products and services than the banks could – and in many cases, disruptors were both better and cheaper than the banks. Additionally, new fintech channels and platforms have become viable competitors to traditional players, tempting consumers away from the institutions they trust in favour of better user experiences. Now it is not unusual for people to have up to 15 financial apps downloaded on to their mobile phones. This Finextra impact study, produced in association with Banking Circle Group, explores the evolution of fintechs and Big Techs from unbundling towards rebundling of financial products and services to the benefit of customers, as well as providing examples for the modernisation of banks and financial institutions.

22 July 2022 788 downloads

Report

The Future of Digital Banking in the UK 2022

The digital transformation of financial services remains a defining journey being undertaken by banks and fintechs across the globe. Increased digitisation of banking services after the Covid-19 pandemic, demonstrates how financial institutions are becoming more agile and better equipped to serve their end-customer. The future of banking is an industry reliant on cloud-based technology and partnerships with fintechs to drive their businesses forward. The digitisation of financial services through mobile apps, audio chatbots, and automation makes banking more personalised and convenient to users. However, accompanying this digitisation comes challenges such as cybersecurity and fraud, arising from this shift toward a digital ecosystem. Talent has never been in higher demand, and retaining strong employees with the right training is pivotal to succeeding digitally. By partnering with fintechs, banks are overcoming these challenges and navigating the new environment with the future front-of-mind. Featuring expert views from 10x Banking, Infosys Finacle, Mambu, and Salt Edge, and insights from Lloyds, first direct, OakNorth, and Santander, this Finextra report will explore how industry leaders perceive key events and trends defining the future of digital banking in the UK, during 2022 and beyond.

07 July 2022 1384 downloads

Report

Real Time Payments: Solving today's problems for tomorrow's success

Banks understand what they need from real time global payments, but reaching a position where they can leverage the full benefits available is a significant challenge. While multiple projects are underway around the globe in an effort to bring real time to multiple markets, before banks can tap in to the advantages of real time, they must first get their technological house in order. Banks must consider how real time payments should interoperate with each other, and create real time global settlement and clearing. Why does this remain such a challenge? It is all related to what is happening in the payment structure of traditional banks. Whether it’s a tier 1 bank encumbered by legacy systems, or a smaller bank with limited coverage of cross border capabilities, in almost every financial institution, payments tend to be segregated. This Finextra impact study, produced in association with Form3, will explore the current challenges faced by banks in their efforts to meet instant payment objectives, how the global real time ecosystem is driving pressure on financial institutions to evolve, canvas key trends pushing the real time agenda, and the best way for banks to orient themselves for real time success.

23 June 2022 835 downloads

Report

The CIO’s guide to architecture modernisation through portability, resilience, and flexibility

Why CIOs need to shelve short-termism in favour of smart modernisation Every architecture decision a CIO makes directly impacts their bank’s competitiveness and success. This is truer than ever as competition and disruption from agile, fast-moving players continues to increase and they scoop up customers who are eager to interact in new ways with their financial services providers. The infrastructures on which the traditional financial services industry - and banks in particular - have been built aren’t holding up to this pressure. Their response? Singlethreaded point solutions, and lots of them. However, these aren’t solving problems for the long-term - or, arguably, even in the short-term. Rather, they’re exacerbating a growing architectural issue, adding to the inefficiency and lack of scalability of their IT environments. They’re also making it harder to get a clear, unified view of the whole estate. Instead, banks continue to accumulate technical debt, create integration headaches on a colossal scale, and ultimately fail to rise to the challenge that today’s financial services ecosystem demands. Of course, banks have legacy infrastructure to consider. Abandoning these investments isn’t an option. But building alongside them using cloud and new technology is. Banks need to consider how to bring together the operational domains of customer, application, infrastructure, and security. Through modernisation and automation - and combining the best of existing and new – they’ll be able to connect data silos, integrate systems, and enable real-time visibility to deliver improved services faster and more securely. The bottom line is, banks’ CIOs need to do more than merely resource the next project. They should be working towards increased visibility on all levels to provide long-term resilience for their organisations and most importantly, their customers. And whether success means enabling their global workforces to work from home today, tomorrow, or next year - or upping the game when it comes to customer interactions - they’ll be able to do that, and more, underpinned by a modern infrastructure. Download this Finextra impact study, produced in association with Tanium, to learn more.

14 June 2022 397 downloads

Survey

Payments Modernisation: The Big Survey 2022

How cloud, data-rich ecosystems and real-time digitisation are transforming the payments business This survey, conducted in early 2022, aimed to quantify the latest trends in payments modernisation, cloud and ‘as-a-service’ delivery models for account-to-account payments across corporate, SME and retail banking. It is a forward-looking annual report, which allows for an analysis over time of priority shifts for banks and their customers, and highlights areas where the trend towards digitisation and real-time payments are accelerating. The survey demonstrates 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 PaaS, allowing the financial institution to improve its overall operational efficiency and customer propositions. Download your copy of this Finextra Survey Report, produced in association with Volante Technologies, to learn more.

30 May 2022 895 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 1741 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 1077 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 461 downloads

Report

Cloud, the Critical Component to Power New Business Models

Today, every company is a technology company. No organisation can modernise products, deliver services, or meet customer expectations without harnessing the benefits of technology. Financial institutions are now learning from leaders in other industries and applying acquired best practices for successful cloud adoption to their business models. The financial services industry is at an inflection point in its use of technology and banks have already started to seize this moment and embark on their transformation journeys. With the increased agility that the cloud offers, products can be brought to market much faster and in a cost-efficient manner, which is what has led to traditional financial institutions adopting and migrating to the cloud with urgency. Key drivers, in addition to resilience, include the desire to be more efficient from a developer productivity standpoint and raising the bar on security has been equally important. To workshop these best practices, experts gathered for a Finextra webinar, ‘Modernise, innovate and transform on the cloud’, hosted in association with Tata Consultancy Services (TCS) and Amazon Web Services (AWS). The panel looked to explore how financial services organisations are leveraging the cloud to transform existing businesses and bring innovative new solutions to market.

11 March 2022 395 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

Report

ISO 20022: How banks can avoid becoming a cautionary tale

Transitioning to the ISO 20022 financial messaging standard has been high on the agenda for financial institutions for several years, but as deadlines loom, the true advantage of early adoption means institutions are facing new pressure to migrate, and to do so quickly. By late 2022, institutions across the globe will have begun their migration to the new ISO 20022 financial messaging standard for high-value payments. SWIFT’s timeline delays have somewhat hindered the process for many institutions, but the project is resolutely on track for completion by 2025. The benefits of transitioning to the data-rich standard are well documented, but executing the migration itself is relatively new territory for financial institutions and the counterparties that transact with them. Financial organisations should approach their ISO 20022 projects with an honest view of the strengths and weaknesses of their existing infrastructure, so that avoidable mistakes remain just that. Download your copy of this Finextra impact study, produced in association with OpenText, and find out about four key areas that institutions must address when approaching their ISO 20022 migration to avoid unnecessary complications, and instead build an infrastructure that caters to a data-led, customer-centric future.

04 March 2022 604 downloads

Report

The Future of Embedded Finance 2022

Which European Stakeholders will Win or Lose? Momentum towards embedded finance has been building slowly but surely over the past decade, as demand for seamless e-commerce solutions push both financial and non-financial players to serve their digitally discerning customers more effectively. The arrival of Covid-19 and the significant shift in consumer behaviour served only to accelerate the growth of embedded finance solutions. With the unexpected global lockdown not only of brick-and-mortar retail, but of countries’ entire workforces, the economy was forced to operate differently, and the need for a digital, accessible world became more urgent. With significant market appetite and foundations for payments solutions already established, the pandemic laid fertile ground for embedded finance to become entrenched in the everyday lives of consumers. Brands around the world are now scrambling to strategise, develop, and implement their journey toward delivering more effective payment offerings to their customers. This new Finextra report, produced in association with Solarisbank, includes industry expert commentary from financial institutions such as BBVA, Illimity, Nomo, Orange Bank, and Plaid.

28 February 2022 1283 downloads

Report

The Future of Regulation 2022

From Innovation to Execution The fire for innovation in financial services has long been raging, and regulators, having transformed their modus operandi to keep pace with the force of technological change, are carefully approaching their role in the great rewiring of the financial system. The fear once invoked by terms like artificial intelligence, cloud computing, or data sharing, has been relegated to the past, and the role of technology in the future of financial services is now accepted as being intrinsic to its success. With Open Banking reaching new realms of maturity, players have begun questioning how best to measure its success in a post-pandemic world. While Open Finance edges ever closer to pulling all focus away from the original Open Banking objectives, innovators are looking for ways to unbridle all pretence tied to our traditional view of what finance should achieve. Instead, they are placing impeccable user experience at the centre of their offering. This unbridling is also becoming apparent in the burgeoning appetite for decentralised finance offerings by retail and institutional investors. Central bank digital currencies (CBDCs) inject another layer into this mix, as central banks and governments carefully weigh up the advantages and risks of diving straight into the opportunity they present. Regulators are caught in the middle of these rapidly evolving trends and forces, attempting to stay the regulatory course by ensuring stability and security, while also motivated to remain at the forefront of this technology. Resilience has never been a more important focus for regulators, who are shifting responsibility directly onto market players to ensure strength across intertwined systems. Selecting a handful of areas tied to fintech that are either ripe for, or undergoing seismic regulatory evolution, we’ve compiled a wealth of insights from industry experts who have shared their views on the changes we can expect in 2022. This new Finextra report features commentary from industry experts across a breadth of financial, technology and regulatory firms, which include contributions from Accenture; A&O Consulting; Bird & Bird; Change Gap; Coutts; Herbert Smith Freehills; Hogan Lovells; Plaid; Proskauer; P2 Consulting; McDermott, Will & Emery; Noll Historical Consulting LLC; Société Générale; State Street; and The DPO Centre.

07 February 2022 1112 downloads