Connect with us

News

41% OF FINANCIAL EXECUTIVES BELIEVE THE DIGITAL SHIFT CAUSED BY COVID IS PERMANENT

Published

on

  • European executives acknowledge the irreversible digital transformation in the financial services industry accelerated by the pandemic.
  • Over two-thirds of financial executives say the pandemic has increased their focus on open banking.
  • This shift is propelling banks to concentrate their efforts on the creation of digital services, on improving the customer experience and restoring profitability.
  • Yet only 67% of financial executives believe Covid has increased business risk, despite clear signs of looming economic challenges.

 

A new report published today from open banking platform Tink suggests that Covid-19 has irreversibly increased the shift to digital financial services.

As a result of the pandemic, financial institutions have been forced to adapt to more digital ways of serving their customers, while people across all age groups have had to become familiar with using more digital services. This has led to the digitalisation of financial services being fast-tracked – and 41% of European financial executives believe the effects of the Covid-19 pandemic on the financial services industry will be permanent.

Open banking gets a boost

Even in light of the digital transformation efforts that have been set in motion over the past few years, 65% of financial executives across Europe still believe that banks need to increase their speed of innovation. This digitalisation shift has resulted in an increased appetite for financial institutions to leverage technology and find solutions to new challenges as a result of Covid-19. In fact, more than two-thirds (68%) of European financial executives say their interest in open banking has increased during the pandemic.

The report also shows that the pandemic has focused European financial institutions on three key business priorities. Three-quarters (74%) of executives see an increased need to enhance their digital services – to streamline onboarding and manage more customers digitally. While 70% are also focused on the customer experience – to differentiate themselves from competitors and boost customer engagement in an increasingly digital world. For 68% of financial executives, there is an increased focus on restoring profitability, through automating and streamlining business processes.

 

Lasting long-term impact or short-term blip? 

However, despite the big shifts the financial services industry has witnessed during the pandemic, 59% of financial executives still see the transition to digital as a short-term blip and expect things to return to normal. Similarly, only two-thirds (67%) of respondents think that Covid-19 has increased business risk, despite clear signs of looming economic danger on the horizon – with households under increasing financial distress, non-performing loans set to rise and businesses at risk of bankruptcy when governmental support runs out. This suggests that some European financial institutions are at risk of sleepwalking into a future of unforeseen challenges that may have a severe impact on their customers, unless they recognise the significant and lasting impact that Covid-19 has had on the financial industry.

 

Daniel Kjellén, co-founder and CEO, Tink, said: The pandemic has forced many executives to remedy the lack of personal interaction with customers by focusing on delivering digital services. But this has also provided a way of creating more value for the customer, while increasing insights to identify or even predict potential risks and new demands. Financial institutions have seen that open banking technology presents opportunities to increase the speed of innovation, introduce new commercial streams and revenue opportunities, while enabling operational efficiencies that will benefit their business long term.

 

News

Opportunities for NFTs in the Metaverse

Published

on

By

By Kaj Burchardi, Managing Director at BCG

 

The Metaverse is a term we’ve seen creeping into more and more of our daily conversations; the next generation of the internet, a virtual reality seamlessly woven into the physical world where Web3 elements are combined with VR experiences. When picturing the Metaverse, a futuristic image comes to mind, an online world in which we may all be virtually eating, shopping, and attending events in the not-so-distant future.

But this can be daunting to those of us who haven’t had much involvement in virtual spaces. And that’s a lot of people. The Metaverse will be an increasingly interesting platform for both consumers and brands and there is a growing sense of curiosity about what it claims to offer. It will provide valuable opportunities to those who choose to invest.

Well-known brands such as Nike and Adidas have already entered this space in order to make their mark in virtual reality and we’ve seen large investments made. NFTs are a substantial part of this. Viewed as collectibles, assets, or investments, we will see the buying and trading of them become increasingly common as the Metaverse economy develops. Shifting to the use of NFTs in the Metaverse will position brands as future-orientated and innovative, allowing them to have a seamless journey into the Metaverse and to collaborate with like-minded brands.

 

Preparing for mass adoption  

Current users of the Metaverse have experienced everything from a virtual Travis Scott concert to virtual restaurants and farmers markets. They have also participated in a sizeable virtual-asset economy, buying, selling, and creating goods such as clothing, real estate, art, and currency. In a relatively short amount of time, these NFTs have presented immeasurable opportunities and the market was valued at $22 billion in 2021.

Their role in the Metaverse will only accelerate the market’s growth and it’s exciting to consider where it will take us and who will be investing in them. Those looking to enter the metaverse will have more confidence to do so, which will increase virtual reality adoption.

The Metaverse will act as a platform where users can showcase and trade their collection of NFTs in the form of art, music, and property between users directly – but an intricate technology stack is needed to accommodate these NFTs.

After the creation of Web1 and Web2, Web3 has been created as a platform for the modern user and aligns with the Metaverse. It will and already has shifted behaviours around content online allowing users to consume, create and directly own content independent from a platform.

The decentralisation along with blockchain technology provides trust which will enable both consumption and exchange, and this powerful technology stack will always underpin virtual assets.  There are already some 30 million NFT wallets – including 1 million active walletshighlighting the growing market and as the popularity of the Metaverse grows, virtual assets could increase in economic value and become an asset so valuable we can’t ignore.

 

Ever heard of a virtual burger? 

There are multiple applications of NFTs today already. Most notably – McDonalds commemorated the return of their McRib with their first ever NFT drop. Iconic fashion house Louis Vuitton launched Louis the Game which integrated 30 NFTs and Gucci auctioned a new NFT inspired by their autumn-winter collection. Though the value of these NFTs is undetermined, they also come in the form of entry tickets, music rights or ownership and art that all have value.

Web3, although still in its infancy, is powering this vibrant virtual asset economy and means space is being created that will attract a strong user community.

 

The Sandbox and Decentraland 

Both The Sandbox and Decentraland leverage Web3 technology and are designed to integrate with the tech stack. This is also attracting major brands. 

They, along with Web3, facilitate interoperability between Metaverse worlds such as the ability to use the same NFT-proven asset on multiple platforms, as well as interoperability between m-worlds and the web, such as the ability to buy NFTs on “traditional” websites. The combination of asset creation capabilities and monetisation opportunities is addictive for both creators and users, since they are all stakeholders.

With extensive and powerful technologies such as the above as well as blockchain, NFTs have a brilliant foundation to leverage their value and purpose within the Metaverse.

Continue Reading

News

Why Anti-Money Laundering is no longer just a tick box exercise

Published

on

By

Tremors following Russia’s invasion of Ukraine have been felt around the world. At a time when customers are already demanding more from companies, the additional pressure being felt — especially by banks and financial services — to prioritize compliance and risk management is stronger than ever before. This has been further compounded by the realization across Western democracies of the extent of the Kremlin’s financial links within their jurisdictions, adding yet more pressure on governments to implement regulatory change. The need to investigate unexplained wealth orders and provide stronger reporting measures to tackle illicit transactions is more necessary now than ever before, while simultaneously ensuring sanctions do not impact the security of ordinary citizens’ bank accounts.

Anti-Money Laundering (AML) was once merely a tick box exercise. However, those in compliance now see financial crime and any link to bad actors as a legitimate risk to the reputation and the future success of financial organizations. As the industry moves in this direction, the entire ecosystem — law enforcement, regulators, and financial institutions — must move with it. Investment in banking technology is increasingly being focused on the development of more sophisticated solutions in the AML and anti-financial crime space. Clearly, there is more to be done in establishing the openness, reliability and safety needed to ensure customers’ assets remain secure. While some of the more traditional organizations still use fairly basic tools, there is a desire to innovate quickly and effectively, with a focus on implementing high-risk–reducing activities that can provide AML alerts in real-time across both traditional finance and the growing presence of digital assets.

However, the banking sector is also on the precipice of great change and dynamism, and AML has a fundamental role in achieving this success, especially for the emerging economies market. A report by PwC highlighted that Brazil, Indonesia, Mexico, and Turkey will develop banking sectors of comparable scale to major European economies such as the UK, France, and Italy before 2040. Meanwhile, EY’s report in 2019 showed that financial inclusion can help boost GDP by up to 14% in large developing economies such as India, and up to 30% in frontier markets across Africa. These predictions are being aided by the continued rise of digital assets, growing exponentially, and projected to reach $4.94 billion by 2030, growing at a CAGR of 12.8% from 2021 to 2030, providing capital access to customers worldwide through instant decentralized transactions.

This makes the need for frictionless financial activity imperative, ensuring businesses have constant access to capital to invest alongside the security of working with banking providers with industry-leading AML services in place.

At Zenus Bank, we have approached this challenge by offering a US bank account that allows clients in over 150 countries to deposit, hold and make payments through US banking infrastructure. This form of international movement makes secure worldwide AML services an imperative.

As demand for our services has grown rapidly this year across Asia, Europe, and South America, we knew to scale at speed we needed to have a secure AML system that would allow us to grow our operations remotely without compromise. Adopting systems such as Identity Onboarding Authentication (IOA) has been key to achieving this. The technology streamlines the onboarding process for all our new customers using facial and voice recognition combined with artificial intelligence, all but eliminating the risk of individuals or businesses setting up fake accounts. IOA also validates thousands of identification documents in seconds, comparing the customer’s ID when submitting transactions to their facial recognition to provide financial security for us and our customers against money laundering. This type of full cycle integration of customer biometric validation and frictionless connectivity with multiple vendors is essential for financial irregularities and fraud prevention, eliminating old protection systems such as the need for passwords, personal questions, or other weak links in the security chain.

And so, the future of AML is two-fold: helping to fight the rising risks of financial crime that come with the increase of embedded financial services, and to ensure the ever more complex forms of payment can be completed at speed while monitoring the legality of each transaction in real-time.  AML is no longer just a tick box exercise — it is key to the future success of the financial industry.

Continue Reading

Magazine

Trending

News2 hours ago

Opportunities for NFTs in the Metaverse

By Kaj Burchardi, Managing Director at BCG   The Metaverse is a term we’ve seen creeping into more and more...

Finance2 hours ago

Weathering the Crypto Storm

Crypto investors may be left reeling from losses over the last few months. But that is not to say all...

Top 102 hours ago

How insurers benefit from digitalisation

Oliver Werneyer, CEO & Founder, Imburse   Insurers need to embrace digital transformation to stay relevant. Customers nowadays are well-informed...

Business4 hours ago

The perfect storm: new regulations and an inflationary environment will cause an upswing of M&A and consolidation

By George Netherton, Partner, Head of Europe Insurance & Asset Management at Oliver Wyman   As Q2 results roll in,...

Business4 hours ago

Accounting software: the future is not what it used to be

By Lyndon Stickley, CEO of iplicit; an award-winning accounting software developer Escape your discomfort zone US Navy Seals have a...

Business5 hours ago

Retailers: don’t let today’s complex customs costs land you in hot water

By John Finnerty, Indirect Tax Director at Digital River   Online retailers want to make the most of international opportunities...

Business16 hours ago

Let’s Not Talk Ourselves into a Slump!

By Dominic Bourquin, Head of the Tax Consultancy and Corporate Finance team at Monahans   In the face of the...

Business2 days ago

How established financial organisations can break down the barriers to innovation

By Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems   Often perceived as more agile and innovative than traditional banking...

Business5 days ago

How can businesses boost employee experience for finance professionals?

By Martin Schirmer, President, Enterprise Service Management, IFS Over the course of the last year, The Great Resignation has seriously...

Business6 days ago

CBDCs: the key to transform cross-border payments

Dr. Ruth Wandhöfer, Board Director at RTGS.global   If you work in finance, you’ll have been hearing a lot about...

Business6 days ago

Green growth: The unstoppable rise of climate technology investment

With the investment community focusing more and more on renewable technologies, investor interest is at an all-time high. Ian Thomas,...

Business6 days ago

Bolstering know your customer processes as regulation tightens

Nick Payne, banking services, customer advisory, SAS UK & Ireland, discusses how new technologies allow financial services companies to develop rigorous KYC...

Finance6 days ago

The penny has dropped – the finance sector needs Data Governance-as-a-Service

By Michael Queenan, Co-Founder and CEO at Nephos Technologies   In our data-driven world, the amount of data is growing...

Business6 days ago

Seven tips for financial services brands using mail

By Cameron Russell, Head of Marketing at Marketreach   Customer experience (CX) is a powerful differentiator for modern brands. If...

Top 106 days ago

Turn the data landfill into an insight goldmine

Andrew Watson, CTO, MHR Today, businesses have access to a wealth of data, with vast amounts of information created daily....

Business6 days ago

A Culture of Cyber Security Throughout Financial Services Organisations

Michael Cantor, CIO, Park Place Technologies Financial Services organisations have long been a top target for cyber-attacks given both the...

Business1 week ago

Financial Stability Board Gives Full Support to Wide LEI Use in Global Payments

Clare Rowley, Head of Business Operations at the Global Legal Entity Identifier Foundation The strongest recommendation yet by the Financial...

Business1 week ago

On-demand pay: why payroll needs a modern approach

Byline:  Paul Bartlett, CEO, CloudPay   While the world of work has evolved drastically over the last decade, payroll has...

Business1 week ago

 ‘What should real estate investors be doing now – has the market hit rock bottom or is now the time to buy?’

Korosh Farazad, Founder & Chairman of Farazad Group Ltd.   Following many years of housing prices soaring and competition steadily...

Banking2 weeks ago

Augmented automated underwriting and the evolution of the life insurance market

By Alby van Wyk, Chief Commercial Officer at Munich Re Automation Solutions   It’s almost inevitable. Spend your working life...

Trending