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HOW OCCUPANCY DATA CAN SUPPORT THE BANKING INDUSTRY IN CHALLENGING TIMES

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Morphean CEO Rodrigue Zbinden looks at how understanding and using occupancy data to support operational decision making is key to helping banks remain open.

 

The COVID-19 pandemic has presented challenges across all industries. From a customer perspective, retail banks have been able to continue to operate online, thanks to mobile apps and cloud connectivity providing customers with full access to their accounts remotely. However, it is the investment banks and wealth management companies that have suffered as a result of lockdown measures, and now need to ensure that large numbers of staff can continue to work safely. Considerations must be given to the necessary steps required to maintain a safe environment in which this will continue to be possible.

Hygiene and social distancing measures will surely be at the top of any priority list. Banks are under pressure to monitor all aspects of health and safety while continuing to offer the same high levels of professionalism and reliability. With management no doubt looking with interest at the tactics employed by those providers of essential services who have remained open throughout the pandemic, it is apparent that, alongside the safeguarding of people, banks must also factor high levels of security into any solution.

 

Morphean

Gaining insights, unlocking intelligence

In comparison to the dated CCTV technology and manned access points of the past, modern security solutions have many capabilities, both from a security and business perspective. Cloud-connected network cameras are designed to provide high quality surveillance video, both externally for perimeter protection and internally, for real-time monitoring. Used in conjunction with access control systems, video can provide a second factor of identification, granting access where positive identification is made, through a system that it more trustworthy than access cards or keypads alone.

In addition, today’s network cameras and access control systems, linked via the internet of things (IoT) produce data that can be analysed in the cloud to generate powerful insights. This information can be used to inform a variety of business decisions, particularly in an environment where staff move freely around premises. Data about the most often frequented or congested areas can play a vital part in finding a solution, within the current climate, to streamline operations while minimising risk from a health and safety perspective.

 

Effective people management

Using this technology to determine, control and measure occupancy levels can prove invaluable. Understanding and being able to respond to occupancy data is an important part of not only improving onsite security and situational awareness, but is also integral to ensuring high standards of service, resourcing tasks appropriately and maintaining a secure environment.

Through the use of sensors placed at entrance and exit points, staff numbers can be effectively monitored, with downward placement ensuring GDPR compliance by performing a head count rather than identifying individuals. In addition, frictionless access control mechanisms ensure a fast and hands-free method of admitting staff to the premises, using surveillance cameras, QR codes, or mobile phone identification to avoid touching keypads, manned gates, or other procedures that will delay staff and cause unnecessary queue ‘bottlenecks’ at entranceways or on stairwells.

Audio equipment, connected to the surveillance system through simple IoT plug and play connectivity, can be used to issue messages, either pre-recorded or live in real-time, to remind staff of the importance of maintaining a safe distance from each other. In addition, failure to comply with social distancing regulations can trigger an automated alert which plays a warning message while simultaneously making security personnel aware of the situation, so that appropriate action can be taken as required.

 

Taking a long term view
With a greater need for the banking industry to be able to guarantee staff safety in the current climate, it’s also necessary to take a long range view of business decision making, in which data around occupancy, combined with surveillance and access control information can play an important role. This data can be used to prove that a bank has taken appropriate measures, providing documented evidence of full compliance. Systems can be made bespoke and tailored specifically for the bank’s requirements from site to site.

While of great benefit in these changing times, intelligent occupancy should not be viewed purely as a tool for a crisis, but as a mechanism for encouraging the right behaviours at the right time. As an example, in relation to retail banking, greater visibility results in the ability to coordinate operations across branches and, ultimately, to serve the customer better. It’s increasingly likely that awareness of proximity to others, and a need to minimise infection risks will become an ongoing concern in the absence of a Covid-19 vaccine. Businesses should therefore look to have the technologies in place that will afford them a better understanding of the use of their space, and movement within it.

 

Remote management and diagnostics

To minimise the risk of Covid-19 infection, it’s vital to ensure that only those personnel who are absolutely necessary for day to day operations are on site. Remote monitoring and operational insights can be managed virtually via tablet or mobile, removing any need to enter the premises. Again, this has applications across all areas of banking, from checking that staff in a large investment bank are following hand washing procedures, to monitoring a number of high street branches to ensure correct social distancing of customers and customer-facing staff.

Such a system is also useful for coordinating onsite activity that sits outside of regular day to day business operations, yet necessitates decision making around how best to manage people. Examples include a fire drill in which staff need to be safely evacuated, or the transit of cash, during which an armoured truck and guard will arrive at the premises to deposit or remove money from the branch. These situations will require some planning as to how best to safeguard people while also continuing to follow all of the expected security protocols. Technology can help in any decision making process.

 

A trusted solution for ongoing support

Partnering with a trusted physical security provider can deliver a future proof system that’s capable of helping the banking industry to face the many challenges of today and tomorrow. A pay-per-use business model means that systems can be easily scaled up or down in accordance with customer requirements, while monthly recurring payments remove the need for large upfront capital expenditure. Regular software updates and firmware upgrades result in a solution that is always online and always up to date, providing the very highest levels of security and surveillance, while also unlocking many operational and business benefits. Such systems can play an essential part in intelligent operations management, keeping the banking industry one step ahead in a changing world.

 

Banking

TO ENABLE BETTER LENDING FOR PEOPLE AND BUSINESSES, WE HAVE TO LOOK TO OPEN BANKING

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By Iain McDougall, CCO of Yapily

 

A recent FCA study found over 14 million people were grappling with financial issues at the end of 2020, representing more than a quarter of the UK adult population. The picture is similarly tough for SMEs, too, which have been impacted hugely by lockdowns, loss of earnings and more; it’s estimated the pandemic will cost SMEs an extra £173,000 in debt per year.

This is resulting in a lack of lending options for both consumers and businesses, as well as expensive or high interest loans, or worse, rejection from lenders all together. This in turn is driving unaffordable lending, and penning consumers and businesses in an ongoing and irresolvable debt cycle – at a time when they need the most support.

One of the biggest causes of this lies in lenders relying on credit scores and credit bureau data to inform their decisions, which simply aren’t accurate enough to truly get the full picture of a borrower’s financial situation.

The case for using Open Banking data in lending decisions has never been stronger.

Data accessed through Open Banking permits lenders to retrieve accurate information about the borrower’s financial history. This can provide more accurate assessments, and therefore enable fairer lending decisions.

 

Credit scores aren’t helping consumers

Take NHS workers as an example. Despite working tirelessly throughout the pandemic, NHS workers make up a sizable portion of the UK adult population currently struggling with debt.

Iain McDougall

An independent report from the University of Edinburgh Business School, in partnership with Salad Projects, found NHS workers are heavily reliant on long-term overdrafts and high-cost credit, where APR is as high as 1,333%. Almost all (93%) respondents said they use one or more types of credit or loan, compared with 75% in the wider UK population (according to the Financial Lives Survey). More than half (58%) use up to three loan providers and 68% use up to four loan providers.

This situation is the result of relying solely on credit scores. While these are the near-universally accepted method of determining credit terms, each credit reference agency has a different method for calculating a credit score. They rely solely on financial history, whether they’ve previously defaulted, or failed to get credit, and not a consumer’s actual financial position, whether they’ve recently got a pay rise or new income, to see how likely it is they will pay back any money borrowed. This can mean, no matter if a consumer’s financial position has changed, they can’t get a better loan because of a previous discrepancy.

 

The challenges facing SMEs

These issues are not just limited to consumers. SMEs, particularly those in the hardest hit industries like hospitality and travel, have struggled to access credit throughout the pandemic.

While many may have been thriving pre-pandemic, their lack of ability to turn a profit during lockdowns, meant they needed extra support. In an effort to keep these industries alive, we saw numerous government backed loan schemes launched, such as the Bounce Back Loan Scheme, to help struggling businesses survive. In total, these schemes have provided almost £180 billion worth of lending to date, supporting over a quarter of businesses in the UK.

However, the soaring demand from businesses in need of these vital funds meant lenders were unable to keep up and many businesses did not receive support quickly enough. What’s more, providers may register these types of loans with credit reference agencies, which means companies that previously had strong credit ratings may see their credit scores negatively affected by any delayed or missed repayments.

This is why it’s vital for lenders to get lending limits right the first time round, so SMEs can avoid potentially adding to their already growing list of debt and thrive in a post-pandemic world.

 

Enhancing lending with Open Banking 

Using Open Banking can add a much-needed layer of trust and loan personalisation for businesses and individuals. By basing credit decisioning on real-time financial data, lenders will be able to create a more accurate picture of their financial situation; and so make fairer credit offers.

Through adopting Open Banking principles, lenders will be able to onboard new customers and grant loans more efficiently, providing businesses with the cashflow required to maintain their workforce and support the economy.

With the borrowers’ consent, it will also give lenders oversight into how the economy is recovering, and enable them to monitor the rate at which the individual or business can expect the loan to be repaid. Meaning they can step in and provide extra support if and when required.

Open Banking provides what credit scores alone simply cannot – real-time insight into an individual’s or a businesses financial position right now, not three to six months ago. By leveraging the data that is readily available to them, lenders could achieve far better and more responsible outcomes. This will reduce the risk of loan default – for both businesses and individuals – and lead to more responsible lending decisions that can help people and businesses bounce back after what has been a difficult year.

 

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Banking

BRAND CONFIDENCE: HOW HAS OPEN BANKING EVOLVED AND DO CUSTOMERS TRUST IT?

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By Geoff Boudin, Director at Revive Management

 

The open banking industry is growing by 24% year-on-year, and is expected to be worth more than £31 billion by 2026. The implementation of the 2018 Payment Services Directive known as PSD2, was intended to boost competition in the name of open banking. The directive, which set out to make payments more secure, by requiring banks to share the data of customers who authorise it with third parties. This allows customers to share their financial information with authorised service providers such as budgeting apps and other third-party money management tools. It was initially called for by the Competition and Markets Authority (CMA) to level the financial playing field and empower consumers by giving them more ownership over their financial data.  So, two years on, what impact is open banking having on consumers? Do they trust it? If so, how can brands build on this trust to offer more a more personalised yet non-intrusive experience that delivers the data to further improve their service offering.

 

What difference has open banking made?

Prior to PSD2, which came into force on 13 January 2018, banks had full authority and jurisdiction over their customers’ financial data. The idea of a bank giving up some of that data to a third party for the benefit of their customers was unheard of. This closed ecosystem, however, runs against the drive towards digital openness, connectivity and convenience. Our digital worlds were opening up and data was becoming democratised, and banks were being left behind. Challenger banks such as Monzo and Atom, which embraced innovative new apps and features, had been making headway for years, and there was a sense that third-party customer-focused innovation was rumbling away under the surface. However, that innovation was stifled until PSD2 laid a path for it, requiring banks to open up access to customers’ data at their behest.

It’s thanks to PS2D and open banking that customers are now able to connect their bank account to a third-party app that can help them better manage their money or sign up to a platform that allows them to access all of their accounts and credit facilities in one place. This allows customers to control their finances as never before.

 

Driving innovation

Empowering and improving the customer experience is one great achievement of open banking. Another is the innovation it has prompted across the entire financial sector. Even traditional banks like HSBC prepared for PSD2 by rolling out its own ‘Connected Money’ app, which allowed its customers to view data from all of their bank accounts – as well as mortgages, loans and credit cards – all in one place. This value-add to the customer experience probably wouldn’t have seen the light of day if not for the competition spurred by PSD2 and open banking. Many other banks and financial services providers have followed suit, offering new customer-centric features based around convenience, visibility and control.

Open banking is a huge step forward in the financial world. So why do some still liken it to a sleeping giant? What’s holding it back?

 

Managing trust and data security

More than 2.5 million consumers in the UK are now happy to connect their accounts to trusted third parties in exchange for some value-added benefit. That’s up from 1.5 million in 2020, no doubt driven by the competitive innovation brought about by PS2D. However, open banking adoption across the rest of Europe seems to have been much slower, and even growth here in the UK is beginning to plateau. While some might blame this on Brexit-induced regulatory changes, such as UK firms no longer being able to use the EU’s certification standards to share customer data after June 2021, there is much more at play.

A Europe-wide survey by thinktank ING polled 13 countries – including the UK – and found that only around 30% of consumers were happy for companies to share their data even after they had given consent. What’s more, only 35% of those polled had even heard of open banking capabilities. This points to issues surrounding data security, trust and awareness – all hurdles that can be overcome by banks, financial services providers and fintech innovators.

To make the most of open banking, banks will have to innovate and forge fintech partnerships with companies using their data sets. That will enable them to enhance existing products and leverage new fintech products being created with their data which will, in turn, benefit their customers.

This process of innovation has already largely begun, but if brands are to take full advantage of all that open banking has to offer, they still need to bridge the trust gap with consumers. We see consumer education, especially in the field of security, as having a key role to play in building confidence and consequently optimising uptake of open banking.

 

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