Latest Artificial Intelligence reports and research: Finextra Research

Report

Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies

A Finextra Research Impact Study in Association with Global Payments and Amazon Web Services (AWS). Consumer expectations, behaviour and payment preferences are and will continue to evolve at an accelerated rate. As a result, payments processors and issuing banks must ensure they are technology-enabled and software-driven so that the financial products and services they provide are future-proofed, ready for today and tomorrow. In an attempt to keep pace with competitors, banks must recognise that collaboration between payment players and cloud service providers will help drive frictionless, more secure digital experiences for consumers. This is of paramount importance in a world where resilient commerce through contactless interactions – at scale – is key. However, some institutions are still offering traditional premise-bound services and aren’t taking advantage of the innovative technologies available in market today. In order to remain relevant, these organisations must be flexible, accelerate speed to market and provide best-in-class experiences for their customers. According to a McKinsey survey, banks that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversation rates and growth by 20%. From extending their footprint into new products, services and markets, to innovating and creating next generation, digital focused banking solutions, the goal for financial institutions is to meet the demands of the connected, digital world and keep pace with ever-changing consumers’ preferences. Against a backdrop of new payments startups, legacy players don’t have the benefit of starting from scratch but do have the advantage of a large customer base. While cloud technology can support digital transformation, financial institutions, retailers and new market entrants will also realise the benefits of a collaboration between the likes of Global Payments and AWS and how it will lead to more secure, reliable and innovative solutions for the payments industry at scale. Download your copy of the Impact Study below to learn more.

07 January 2021 559 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 426 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

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

Report

Digital Transformation Accelerated

A Sibos 2020 Report produced by Finextra in association with Intel. As the global coronavirus pandemic pushed the annual Sibos event into virtual mode for the first time in 2020, it’s not surprising that everyone was keen to talk about how this has changed things in the key areas that the industry gathers to review at this time of year- technology, digitisation, innovation and the future of finance. There was broad consensus that COVID-19 has led to two years’ worth of digital transformation in just two months, as the lockdowns kicked in at the end of March. Financial institutions were affected internally, with a major emptying-out of financial centres and distribution of their IT estates amid rigorous oversight of new workflows, security practices and productivity. But they also had to react to the new expectations and behaviours of retail customers in lockdown and corporates who have themselves had to embrace remote and hybrid working for their financial and supply chain management. As the situation demanded- and continues to demand- flexibility, and economic fears push cost and efficiency to the fore, change resistors within financial services organisations, corporate customers and regulators alike have been forced to become change adopters. 2020 has been far from a positive year for many. But if financial industry and technology people are looking for a silver lining, it could be found in the results of this forced digital transformation. It will be interesting to see how much can be achieved through this accelerated change by this time next year. Download the full report below to find out more.

06 November 2020 710 downloads

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

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

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 Future of Cloud: Powering the Financial Services Industry

Strategic Insights and Best Practices for Success in the Cloud. The pace of change in the financial services industry is unprecedented. Regulatory oversight continues to expand with more stringent reporting and security requirements, emerging technologies are disrupting consumer expectations and the ecosystem is constantly evolving as new players enter the market. As a result, financial institutions are redefining their business models to deliver the capacity, agility and technology design they need to attract talent, be competitive and drive growth. From banking and payments to capital markets and insurance, cloud has become the new normal. In this paper, financial institutions, technology providers and consultants share their strategic insights and best practices for success in the cloud. From building a solid foundation to exploring the cutting edge, they discuss industry trends and specific use cases for stages throughout the cloud adoption journey.

19 February 2020 1001 downloads

Report

The Future of Cybersecurity: 2020 Predictions

2020 promises to be another politically-charged year around the world. Even with the possibility of any referenda in the UK now largely removed, the US election in November may bring to the fore cyber threats and the evolving methods of nefarious actors to interfere with business and government. Financial services companies will therefore be monitoring the cybersecurity space and evolving threats encountered and the methods used to mitigate them. In conjunction with experts of the financial services industry, Finextra explores trends to watch and predictions for cybersecurity in 2020 and beyond. Download your copy of the report now!

28 January 2020 721 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

How European Retail Banks are Riding the Wave of New Technology

Retail banking is in the midst of change and technology is driving transformation, connecting physical and digital environments. Incumbent banks, challengers and neobanks are also focused on developing online and mobile banking services to meet the needs of the consumer, like the chatbot for retail customers, a conversational banking platform that most financial institutions (FIs) have launched. What retail banks are doing is challenging the status quo by adopting emerging technologies to combat issues that traditional financial institutions have faced for decades. This is just a drop in the ocean of the digital transformation that is to come.

18 November 2019 747 downloads

Report

The State Of AI In Financial Services

A small number of multinational top-tier financial institutions are already among the most world's most sophisticated users of enterprise-level artificial intelligence (AI). But while much has been written about the potential for AI to address business problems across the industry, adoption rates and the level of maturity vary widely. The journey usually begins with data scientists pulling together data sets for experimentation and finding insights and ideas to suggest to innovation teams and business units. From there it often progresses to obvious use cases such as improving money laundering surveillance and financial crime detection. Eventually, organisations are widening the context of their data through internal consolidation and enrichment with third-party data, and running models and decision engines across multiple functions within the organisation. Depending on the use case, these can deliver streamlined digital channel processing with automated decisions – or rapid presentation of context and insight for human-in-the-loop decisions. It is the evolution leading to large scale investment, adoption of AI approaches and return on this investment, that this survey sought to illuminate. How many institutions are at each stage of this evolution? What use cases are they focusing on and what challenges are they encountering along the way?

30 October 2019 946 downloads

Report

The Future of AI: Applications for banking business transformation

While artificial intelligence has established itself as a disruptive technology for decades, AI is at the peak of the hype cycle now and banks have started to apply this technology to transform traditional models of businesses. However, being a multi-faceted technology, financial institutions must decipher whether it is machine learning, robotics, deep learning, business intelligence, natural language processing or algorithms that are the most beneficial. While some banks launch chatbot applications and virtual assistants, others do not have the talent within the business to deploy innovative products that are personalised for their customers, and an even smaller number do not understand the value of AI. Finextra’s The Future of Artificial Intelligence 2019 report will explore how the financial services industry can leverage tried and tested experiments of AI in other industries to transform how transaction services can be reshaped. The report looks at how machine learning, deep learning and robotics could benefit banks and could improve customer experience and security, aligning decision-making factors with ethics to improve how a financial institution operates.

16 August 2019 858 downloads