Latest Retail banking reports and research: Finextra Research

Report

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

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

30 October 2020 526 downloads

Report

The Future of Fintech 2020

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

03 September 2020 960 downloads

Report

How to Prevent Payments Fraud amid Global Disruption

Economists predict the disruption caused by the coronavirus pandemic will be felt well into 2021. Banks have been left vulnerable and have to contend with fraudsters who are using Covid-19 as an opportunity to commit financial crime, exploiting consumer fear and the increase in digital payments. Fraud losses need to be anticipated and prevented as banks move from the lockdown to the recovery phase. What must be done to ensure the secure use of alternative payment options? In the age of open banking and real-time payments, funds can be transferred to fraudsters’ accounts immediately and the victim does not notice suspicious movements until it is too late. It is evident that with faster payments methods, the benefits for consumers far outweigh the disadvantages, but hackers will continue to exploit this area. Fraud analysts within a bank must pivot and adapt to working in a new environment to ensure that teams integrate efficiently and decrease human error through a lack of physical communication. Data is a vital tool in a bank’s armoury and must be considered an asset. AI and machine learning can also play a part in fraud and financial crime prevention, consuming disparate unstructured data and creating structured insight and conclusions. Coupled with traditional fraud techniques, banks need to pivot their payments fraud strategy to a tech-driven approach. This research paper by Finextra, in partnership with Feedzai, gathers the views of several experts from Bank of the West, Barclaycard Payments, HSBC, ING, Nationwide and Nordea on how to prevent payments fraud during a pandemic. Download the full report below to find out more.

16 July 2020 635 downloads

Report

Onboarding next steps for new and established Digital Banks

Customers want the onboarding and account opening process to be as easy as possible. A certain amount of friction is to be expected when it comes to identity and security checks, reassuring them that their prospective financial service provider takes security and their data seriously. Signing up for a new financial services product shouldn’t be as simple as providing a username and email address. But nor should it always require reams of paperwork, branch visits and forms signed in triplicate. In the past five years, banks of all shapes and sizes have invested significantly in streamlining their processes so that the regulatory checks such as Know Your Customer (KYC) and Anti Money Laundering (AML) can be met while minimising, where possible, the number of postal and in-branch interactions required for establishing identity and product suitability. Depending on the market segment and product, this process can be done 100% online and ideally via a mobile device – a channel that now dominates for even traditional banks with established, older customer bases. Digital onboarding is just the start, however. Banks, both new and established, are looking to improve the integration of identity at onboarding with ongoing authentication credentials, and adopt a risk-based approach to security throughout the customer lifecycle that can adjust the balance between protection and convenience for customers. Download the full white paper below to find out more.

14 July 2020 838 downloads

Report

Is Request to Pay the System for a World of New Norms?

With faster payments going live in the UK in 2008, one could regard the decade-long recovery from the financial crisis as being a journey towards realtime payments. The last few years has also seen the advent of Open Banking, firstly in the UK and subsequently across Europe and elsewhere. Request-to-pay (RtP) is an example of harnessing Open Banking to serve financial institutions, SMEs and consumers in removing some of the frictions relating to sending and receiving payments for lenders, businesses and individuals. Ahead of its introduction later in 2020, RtP was billed as an integral tool to the transformation of the payments landscape across the world. RtP is being widely promoted in the UK, Europe, the Nordics and the USA, all of which have active industry programmes. This paper will explore the opportunities for lenders, businesses and consumers provided by RtP as well as the hindrances and challenges that would need to be addressed to move to widespread adoption. Download the full report below to find out more.

13 July 2020 973 downloads

Report

Shifting to the New Normal in Card and Digital Payments

It is an interesting time for the cards industry and for issuers there is a similar narrative to that of legacy banks and digital transformation. There have been several drivers of innovation in recent years, very much accelerated by the current pandemic and the various demands and transitions that have been wrought on the entire industry in different ways, as well as on the consumer and client base. What are the key factors for survival as competition increases and regulatory compliance bears down on security measures around customer data and fraud as well as on a looser and more empowered user experience? Utilising new data that can be more easily captured and carried with transactions can inform and shape new services, and better overall understanding of customer behaviour, leading to increased personalisation and an array of added features. As integration into retail commerce platforms and an increased demand for frictionless and invisible payments takes hold, is the physical card becoming obsolete or can issuers create new propositions to retain their position? Competition in the cards industry has evolved from terms such as interest rates and fees, to balance transfer products, to loyalty and rewards and more recently has been diversified by new fintech providers. This research paper by Finextra, produced in association with FIS, is based on several interviews with cards industry experts, to formulate a view on how issuers can compete in the digital world as payments continue to proliferate and fintechs disrupt the status quo. Download the full report below to find out more.

07 July 2020 891 downloads

Report

Instant Payments: Why Covid-19 is Bringing the Roadmap Forward

Business continuity has never been a more valuable asset for financial institutions. Fundamental changes to 'business as usual' as a result of Covid-19 have exposed the need for resilient, reliable, and efficient systems to maintain essential payment services and protect the interests of all ecosystem participants, from consumers to the largest corporations. At the same time, in the lead up to the European Single Market Infrastructure Gateway's (ESMIG) 'big bang' migration at the end of 2021, EU financial institutions are understandably consumed with ensuring that they are appropriately equipped to manage the systemic changes the migration will demand. While ESMIG provides a hard deadline to work towards, every institution bears unique targets and objectives, making the structure and execution of these plans more challenging than ever. In this context, it might seem that the adoption of real-time or instant payments—immediate settlement of account-to-account payments on a 24x7 basis, domestically and cross-border—should reasonably take a back seat to more pressing existential concerns. After all, while the ESMIG migration is mandatory, instant payments are not, and financial institutions could be forgiven for focusing solely on compliance-driven projects at the expense of optional ones. This impact study will outline why the reverse is true: that in fact, the move to instant payments takes on an increased urgency in the coronavirus age. It explores the benefits of instant payments for banks' internal operations as well as their customer value propositions. It also examines shifting approaches to business case development, and the increasing relevance of cloud and as-a-service models for instant payment processing. Find out more by downloading your copy below.

11 June 2020 639 downloads

Report

A 3 Step Guide to Driving Customer-Centricity with Big Data

As a result of increased competition and rapidly changing consumer expectations, banks are under increased pressure to develop the way they target and appeal to customers and in turn, maintain a profitable personal relationship. In addition to this, the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the US have set a foundation for data consent management and ensuring that customers’ personal information is always protected and secured. Now they are breaking down their data silos, banks are struggling to harness the information that is key to unlocking customer relationships in this ever-changing market. While they are navigating their way through such a volatile environment, traditional financial services companies are often reluctant to change and may find it difficult to implement new technology from which they can derive value. This is partly because they have had bad experiences with tech projects in the past that did not deliver or bring changes as expected. However, smart technology and out-of-the-box solutions in the form of powerful customer data platforms (CDPs) are readily available and deliver a competitive edge and value to financial institutions. Find out more by downloading your copy of the research paper below.

19 May 2020 406 downloads

Report

A Panorama of the Changing Banking Landscape in EMEA

Fintech players have proved that mass-market growth is achievable and are now providing other financial service entrants with a blueprint of how to scale exponentially. What sets the newer banks apart from incumbent providers is that they adapt their offering to meet the needs of their users. There is no universal formula for success that can work across all business models, and across the entire EMEA region. The most common way of generating revenue is charging customers, which would work well in a startup model as these organisations are unencumbered by legacy infrastructure and cost structures. However, untrusting customers want more than an improved customer experience, and companies need to establish revenue sources that can be diversified over time. Additionally, banks must give their customers a reason to bank with them. This research paper by Finextra, in association with Mambu, gathers the views of several experts from Bain Capital, Barclays, Citi, EY, OakNorth, Santander InnoVentures, SEB, Starling Bank and Tink on how to build a bank in Europe, the Middle East and Africa. Download the full report below to find out more.

30 April 2020 1186 downloads

Report

Underpinning Innovation with Real-Time Payments

Real-Time Payments growth is just the beginning. Real-time payments systems are proliferating around the world, with higher values and volumes together with greater cross-border connectivity. The industry is tasked with designing and creating the market infrastructure that supports this growth, and is increasingly turning to hybrid multicloud deployments to deliver a new wave of innovation that can take place within all manner of systems, from fraud detection through to liquidity management and accounting software. Increased collaboration and global standards underpin the upward trajectory of digital transformation in a rapidly changing financial ecosystem. Download the full white paper below to find out more.

31 March 2020 903 downloads

Report

Should banks be the guardians of digital identity?

The single, interoperable digital identity will be a dominant technology trend over the next decade, within the financial services industry and more broadly in our digital economies. Often pushed by digitally-minded governments, there are digital identity schemes at all levels of maturity worldwide. And where they are already well established they have evolved differently in different markets over the past 20 years. Many of the best examples, that have delivered high population penetration and efficiency and security for consumers and businesses, have had bank collaboration at their heart. In these cases, banks have been able to leverage their trusted role in the economy, their technical expertise and experience with shared infrastructure, to drive a level of success in opt-in digital identity schemes that governments have not been able to achieve on their own. But banks can’t take their prime position in digital identity for granted. Even in countries where banks have already driven the digital identity agenda, regulation and market structure can change and new competition will emerge. In countries that are still formulating federated digital identity frameworks, or looking to expand government national ID schemes into private sector usefulness, banks also need to be aware that the big tech giants and other globally networked companies have serious potential to upend the global market for digital ID. If banks get digital identity right, they stand to realise benefits in streamlined sales processes and customer onboarding, reduced losses from fraud and regulatory fines, and the potential for new revenue generating identity-based products and services. But more importantly, they can maintain their central role as arbiters of trust and stay relevant in the transforming digital economy. Download the full white paper below to find out more.

24 March 2020 803 downloads

Report

The Irish Banking Ecosystem, Interconnection and the Speed of Change

Irish banks are operating in a rapidly changing market and must embrace new technologies and business models to keep pace and to stay ahead of energetic new entrants. But the same banks should accept that they cannot make this transformation alone and have to seek out new partners if they are to succeed or even survive in a new marketplace. The current trends towards open banking services, increasingly digitised products, and the appetite for real-time payments is playing out globally. In Ireland, where fintechs and big tech both reside in increasing numbers,the trend is especially acute. Many banks are adopting a cloud-based strategy to cope with new processing demands and to extract value from the increasing amounts of data, constantly generated from a myriad of remote devices. ‘Fast, agile and secure’ is the order of the day in order to join up the dots in the emerging ecosystem and be a frontrunner in the development of dynamic new products and services. The question is, can banks do it alone and what are the key ingredients for a successful partnership? Download the full white paper to find out more.

16 March 2020 413 downloads

Report

The Information Advantage: Driving Opportunities and Mitigating Risk in a Hyper-Connected World

What's next for business in this world of digital services and data? Collaboration, interoperability and a trusted network in which to operate came to the fore as the key factors to support business growth and financial services transformation during a recent roundtable, held under Chatham House Rule. The roundtable was hosted by Finextra, in association with OpenText, and brought together payments and industry stakeholders to discuss the pertinent issues and drivers around digital and operational transformation. The themes have percolated and resonated in follow-up discussions since. Delegates discussed the pressing challenges as well as opportunities, and how to solve them in order to improve the landscape for commerce. Download the full report to find out more.

09 March 2020 417 downloads

Report

AI and Information Paving the Path to Personalisation

This report details the results of a survey on AI, onboarding and information readiness in financial services that was conducted online in mid-2019 by Finextra, in association with OpenText We had responses from 70 financial institutions, predominantly from retail and corporate banking groups, in 42 countries. While customer personalisation for guidance and communication is widespread in financial services (63% of respondents), moving beyond segmentation to true individualisation of product and service is not yet a priority. Only 9% of respondents ranked this first or second on an importance scale. AI is going to have an impact across many different parts of financial institutions, but 42% of respondents to this survey believe it is going to have the biggest effect on the value chain in the area of customer service and retention. But only if challenges around accessing data from disparate sources and growing management’s understanding of AI can be overcome. Just over half (58%) of respondents say they can today onboard new customers using only digital channels. Most of these digital-capable banks can complete onboarding processes in two days or less, but this was more likely for retail institutions rather than corporate banking divisions. Overall, 45% of survey respondents say they can complete onboarding of a new customer in 40 minutes or less. 80% of organisations say they aspire to exchange, integrate and leverage underutilised data sitting siloed inside their enterprise’s legacy applications. But the nature of these systems poses the biggest challenge to effective information governance. Download the full paper to find out more.

07 January 2020 464 downloads

Report

The Critical Role of Cloud in Digital and Operational Strategy

The operational challenges facing financial services firms are only increasing - from regulatory requirements to new entrants and now open banking and digital transformation - all at a time when competition has never been stronger. Fortunately, cloud computing services are constantly improving and maturing. Now banks can get more than cost-savings from their use of the cloud. It can improve cost management, enhance data security and data management, reduce operational risk, and enable banks to migrate to a more decentralised, digital and collaborative operating model. However, there are issues that banks, both new and old, must consider to optimise their use of the cloud, such as cultural challenges, skills shortages and operational obstacles. One way to overcome these challenges and ensure the most effective use of cloud technology is for banks to work with a growing number of expert organisations to support and manage their cloud migrations and digital transformations.

27 December 2019 929 downloads