Connect with us


Banks must seize control of their dangerous data silos



Rob Houghton, founder and CTO of Insightful Technology, says banks face a serious compliance and cost challenge with data silos. It’s time they acted.


Remaining compliant in today’s financial services industries requires a comprehensive surveillance function. Every call, message and communication between employees, customers and trading partners must be captured, stored and monitored to illustrate compliance.

As regulatory requirements have become more demanding, many banks have sought to plug gaps in their coverage by adding new point solutions to their legacy technology. Each time a regulator makes a new request, more software has been stitched into an increasingly large patchwork quilt of systems.

The result? With every added solution, comes a data silo – a collection of information that’s not fully or easily accessible to the bank because it’s recorded or stored differently to everything else. A typical tier one bank now runs countless voice-recording, trade surveillance and data-archiving systems.

Each will format and time-stamp data differently, while also referencing individual employees under surveillance in ways that are inconsistent with other systems. In short, it’s a disparate mess, both in terms of tech investment and the human resources required to filter through all the information.

Prohibitive export costs

Promisingly, banks are rightly attempting to clean up by taking on the lengthy task of reducing the number of data silos they work with. But this isn’t without its own challenges. The biggest being the web of contracts that often goes with the introduction of new surveillance technology.

The terms of many current framework agreements between banks and their archive and surveillance suppliers stipulate that data can only be extracted before the end of the contract if banks pay a charge that can stretch into hundreds of thousands of pounds for order management systems, and even higher for data-heavy voice recorders.

If a bank has to run a discovery process, the cost of exporting the data can be ridiculous – not to mention hugely time consuming. Even after this cost, it can take months for a bank to access the data, which will still be in a proprietary format. Changing the way systems record or format data can incur an extra charge.

As contracts end, therefore, banks should consider negotiating hard for new terms that allow them to change the way data is formatted or to pull information out of applications – either continuously or when required – so that a second, bank-owned copy can be created and maintained. Or a ‘golden source’, as it’s sometimes referred to.

Data in this copy can then be normalised and pooled with other normalised data sets so that anyone in the bank with analysis tools – from within compliance and beyond – is able to interrogate it as one.

Even if a bank takes the strategic decision to maintain some silos, there are two considerations that must be taken. Firstly, it’s imperative the bank is able to extract data at any point, which must be reflected in a contract. Secondly, the bank must take stock of all the costs associated with each data silo so they can plan for the future.

Tilt the power balance

This approach helps shift the power dynamic between banks and their technology suppliers back in the favour of banks. This is because the bank will be able to run all its reporting and analysis out of its own holistic copy of the data. With this in mind, the bank is free to change its technology suppliers so it can avoid being tied into silos and the costs associated with them.

Once banks have created a holistic data store that they own – albeit in copy form – they can also render it immutable, meaning nothing can be modified without leaving a clear audit trail. This can be achieved using blockchain technology, where records are distributed and therefore un-hackable.

Furthermore, the cost implications of maintaining copies also tend not to be as heavy as imagined, at least for less data-intensive applications. Although the data associated with voice and e-comms surveillance systems can be huge, having two copies of an order management system or metadata associated with every other activity a bank does isn’t a great deal of information, no matter how big operations are. In fact, the actual storage of a data silo is relatively inexpensive owing to cheap disk space.

Whatever approach banks take in solving the data silo challenge – whether fast-tracking the break-up of silos or opting for a more gradual reduction while negotiating better access to data – an essential first step is the creation of a ‘golden source’.

Once banks have control of all key metadata associated with silos, they can build a fully integrated solution that delivers an interpretation of regulations, the required policies related to individuals’ roles and the organisation’s stance towards its corporate responsibilities.

Only by doing so will banks have started to solve this problem while also remaining compliant and reducing overall costs. Now’s the time to act and begin addressing the patchwork of systems that at worst could lead to issues with regulators, and at best can cost a fortune to unstitch.


Building towards an inclusive financial future



By Catharina Eklof, CCO of IDEX Biometrics


From the visually impaired to displaced migrants, the unbanked, and people living with dementia – a burgeoning financial gap exists across many areas of society. In fact, as of late 2021, almost one-third of adults around the world were reported as unbanked according to the World Bank Group. That’s around 1.7 billion people – with half coming from the poorest 40% of the world’s population. Being financially excluded in this way means not having access to common financial services including savings accounts, loans, a credit rating, or even a bank account. Those who are awaiting clearance to join a country’s financial ecosystem, such as migrants, are also finding themselves left behind by the modern financial infrastructure.

As societies reliance on digital and contactless transactions over cash continues to grow, this financial gap is only set to widen. In less than 10 years, the share of Americans not using cash for payments has increased by double digits, reaching 41%. By 2031, cash payments are expected to make up only 6% of all transactions.

Fortunately, biometric smart cards can bridge this gap for people in the Global South, migrant populations, as well as those with visual or cognitive disabilities worldwide, who deserve to feel secure, included, and independent.


The challenges surrounding passwords

 COVID accelerated the transition from cash to contactless payments and the use of digital wallets, creating a challenge for many. By 2024, it is expected that digital wallets and cards will account for 84.5% of all e-commerce spend.

Digital transactions traditionally rely on the use of PINs that can easily be forgotten, as studies have found that we manage 100 passwords on average across various sites and services. In the US alone, consumers report relationships with more than three financial institutions and have more than four accounts per household. The challenge of password recollection is only growing. To counter rising cybersecurity threats, several countries now mandate two-factor authentication for retailers and service providers, creating further complexity.
However, organizations are responding to financial exclusion. Card provider Mastercard introduced its contactless PayPass offering, as well its Touch Card developed alongside Amjan Bank which enables the visually impaired to distinguish between their cards. Both look to provide a better customer experience for people struggling with the digital changeover. For those living with dementia, Mastercard has also partnered with Sibstar and the Alzheimer’s Society to create a specific card where limits, transactions, top-ups and notifications can be viewed and managed via a complementing app. Likewise, Turkish neo bank Papara introduced a Bluetooth debit card that provides visually impaired users with audio prompts when making payments.


Protecting the visually impaired

There are at least 2.2 billion visually impaired people globally. In 2019, it was found that 89% of visually impaired have been victims of fraud or have made errors when paying for goods and services. This figure comes prior to the pandemic, and the proliferation of digital transactions, suggesting an even bigger concern today.

PINs present an obvious security issue for this demographic, with others able to oversee their inputs and then manipulate them. Contactless payments go some way to solving that problem but pose the risk of fraud as there is no PIN verification below the increasing threshold amount, now at £100 in the UK, where the average annual wage is £27,756. In India, where the average annual wage is 9,45,489 rupees (roughly £9000), contactless limits are set to 5000 rupees (£48). Many accounts also require visual-based inputs to prove identity, such as CAPTCHA, proving as a barrier for the visually impaired.

Enhancing awareness on a regulatory level is key for driving change and reassuring vulnerable groups. The EU Accessibility Act is an example of how payment service providers are obliged to comply with accessibility standards. This includes making interfaces perceivable, operable, understandable, and robust, to ensure that individuals with disabilities can effectively navigate payment interfaces.


Paving the way with biometrics

 Including braille on cards for easy identification is a crucial step for the visually impaired. This can also be used on biometrics smart cards, with sensor textures to confirm the user has selected the correct method of transacting. Not only do these cards provide convenience and inclusivity, but they also promote ultimate security by linking a person’s identity directly to their fingerprints. This data is encrypted within the card itself, reducing any concerns surrounding fraudulent behaviour or of data being lost via a centralized breach or large-scale hack.

In this context, biometrics can be used to serve the unbanked and those currently unrecognized within national infrastructures. South America is an example of an early adopter of biometrics, turning to the solution to cope with swelling population sizes, and the challenges associated with accessing proof of identity when setting up traditional bank accounts. Meanwhile in India, pension payment fraud has dropped by 47% thanks to bypassing the need for prior credit ratings or credentials.

Liveness detection, however, which ensures the biometric sensor is reading a true biometric source (rather than a false or recreated image of one), is vital to the success of financial aid programs globally. Securing remittances through biometric authentication ensures transparency and better fund control. Directing funds to cold wallets or biometrically authenticated cards can also improve program efficiency, safeguarding the interests of individuals and communities.

Overall, the biometrics market is expected to grow to US$87.4 billion by 2028, at a CAGR of 17%. Whilst its value as a simple and secure method of transacting is growing substantially, you can’t put a price on its impact on those who have so-far fallen through the gaps of finance’s digital revolution.

Continue Reading


Preparing banks for digital transformation




By Joman Kwong, Strategic Solutions Manager, Financial Services at Laserfiche


Today, digital transformation is imperative for every industry. After all, technologies like artificial intelligence promise unparalleled efficiency improvements, while even the most technophobic customers are now accepting and using a variety of online facilities, from movie streaming to grocery deliveries. Simply, digital is becoming the dominant method of producing, improving, and selling goods and services. And this is perhaps nowhere truer than within the banking sector.

Digital transformation is crucial for banking institutions to keep pace with customer expectations, while also addressing the macroeconomic disruptions that other financial institutions are currently facing. These including lower liquidity due to hiking interest rates and inflation rates, higher operational costs, and reduced consumer spending as businesses cut back on production, which lowers loan amounts.

While digital transformation is a top priority for many banks, only 30% that have implemented transformation initiatives report success. So, what is standing in the way and how can banks break through?


Customer centricity continues to be the key driver of banks’ digital transformation strategies. Banks are using different approaches to be more customer-centric, such as:

  • Improving customer onboarding processes
  • Reducing friction in the customer journey (e.g., having AI chatbots for 24/7 customer service and automating the loan origination system to streamline lending processes)
  • Providing a self-service portal for customers to access their financial documentation and make service requests anytime and anywhere
  • Securing customer data and transactions

After deploying technologies to achieve these goals, however, banking institutions may uncover the difficulties of maintaining data integrity across applications. It’s imperative to have a secure, consolidated information backbone that enables the organisation to process data intelligently. This system can centralise data in a single source of truth, as well as integrate line-of-business applications to eliminate information silos, and leverage data to support automated workflows and drive informed decision-making.

Competing Priorities

As business leaders and teams embrace digital initiatives, banks may experience competing priorities and uncertainty about where to start. The solution here is not to try and solve everything at once — work with a business analysis team to map out operations with pain points and potential solutions and prioritise them.

Meanwhile, scarce internal resources or a lack of bandwidth, especially for IT professionals, will require the implementation of new software and the development of new solutions, which further increases the demand for IT resources. Banking institutions should always consider software manufacturers with low-code, no-code environments to develop and design apps while providing an intuitive interface for users. The ability to design and create processes should not be limited to IT professionals, either. With proper training, citizen developers and other non-IT employees should be able to create and deploy their own processes as well.

Data Security

Data security will also remain critical as more confidential customer information is released through mobile banking. Banks have also begun using AI to provide faster customer services and reduce repetitive administrative and back-office tasks, such as data capturing and migration. However, they need to be extremely thoughtful when incorporating AI into their tech stack to avoid breaching confidentiality or facing legal or reputational risks. Ultimately, tech like AI is the future of banking and commerce—but organisations must be well-versed in its use to make it a success.

With the implementation of new technologies, plus increasing scrutiny and emerging regulatory requirements to secure customer data, trading and financial services, information governance and records management become even more important. Organizations implementing records management and content services platforms should vet providers to make sure they provide the security tools needed to maintain strict access control for users in-office or working remotely, such as enterprise-level identity management; and built-in document lifecycle management functionality.

The Future of Banking Technology

With the ubiquity of smartphones, digital banking will no longer be an option but rather a must-have for the industry. Therefore, improving omnichannel operations will be one of the key priorities, along with streamlining banking processes like lending and buying homes. Take buying a home as an example: Customers are looking for a more comprehensive, connected, and seamless process. Different parties — such as brokers, insurance, mortgage providers — should be connected, allowing information to be passed along without customers having to repeat submissions.

Customers will also demand more personalised banking services, driven by millennials and Gen Z. This includes receiving quick and accurate financial suggestions from bank representatives and advisors. Banks will invest in technologies to better manage data intelligently, leveraging data across applications for more accurate, real-time customer analysis and informed alerts.

Change will continue to drive digital transformation in the banking industry, and digital initiatives will continue to evolve. The key to success lies in organizations’ business agility — how they react and adapt to today’s challenges and anticipate tomorrow’s opportunities.

Continue Reading



Finance18 hours ago

Investing In Bitcoin: What You Need To Understand Before You Buy

Bitcoin—the digital currency that launched a financial revolution—is more than a trending investment. This decentralized currency, free from traditional banking...

News3 days ago

How the LEI Can Help Financial Institutions ‘Address’ a Growing Challenge in ISO 20022

The vast complexity and inconsistency of address formats globally presents significant challenges for financial institutions. In this blog, GLEIF’s Head...

Banking4 days ago

Building towards an inclusive financial future

By Catharina Eklof, CCO of IDEX Biometrics    From the visually impaired to displaced migrants, the unbanked, and people living...

Business4 days ago

Euro deep tech M&A deal value expected to reach $20bn+ in the next 15 months

Written by Oliver Warren, Associate at DAI Magister   Investment in European deep tech has mirrored the broader decline in...

Business5 days ago

Why ESG Investing Is Becoming More Important

Author: Urtė Karklienė, Sustainability Manager at Oxylabs   Environmental, social, and governance (ESG) term was first mentioned in a 2004...

Banking6 days ago

Preparing banks for digital transformation

By Joman Kwong, Strategic Solutions Manager, Financial Services at Laserfiche   Today, digital transformation is imperative for every industry. After...

Finance6 days ago

The critical tech to deliver personalised digital financial experiences 

Jay Sanderson, Senior Product Marketing Manager, Digital Experience at Progress   Providing customers with outstanding digital experiences is now a must...

Banking6 days ago

Bank-fintech partnerships can shape the future of cross-border payments

Steve Naudé, Head of Wise Platform   People and businesses are more interconnected than ever. In today’s global economy, international...

Business1 week ago

DORA Compliance in Financial Organisations: What You Need to Know

Nick Hogg, Director of Security Training, Fortra   The regulatory landscape is tightening for European banking, financial, and insurance institutions....

Business2 weeks ago

How sound investment research can revive the City of London

Author: Neil Shah, Director at Edison Group   A few months ago, leading portfolio manager Nick Train described the modern...

Finance2 weeks ago

Why Finance should stop leaving inventory to Operations – a guide for CFO’s

Matthew Bardell, Managing Director, nVentic   Traditionally, Finance is the only function within a company that really focuses on net...

Banking2 weeks ago

Vertical thinking: Why banks need to decouple their payments processing value chain

Esther Groen, Head of Payments Centre of Excellence, Icon Solutions   The traditional payments processing model for account-based payments is...

Finance2 weeks ago

Front-door, personalised delivery – why more effective last mile data integration is critical in financial services

by Martijn Groot, VP Marketing and Strategy, Alveo Financial services firms invest significantly in the acquisition and warehousing of many data sets...

Business2 weeks ago

Navigating equity markets in a high-interest rate environment

Marios Chailis, CMO, The Libertex Group   For over a decade, investors have become used to navigating equity markets in...

Business2 weeks ago

How can your office support the collaboration demands of today? 

Rob Quickenden, CTO, Cisilion Over the past decade, the office environment has evolved, with online collaboration tools becoming the norm. But...

Banking2 weeks ago

Improving CX in digital-first banking

By Nina Mack, CX Director at CTI Digital   The financial industry has undergone a seismic transformation over the past...

Business2 weeks ago

How data engineering can effectively support financial institutions

Adding efficiencies, automating processes and strengthening cybersecurity efforts: data engineering can be crucial in support scaling fintechs, says Krzysztof Michalik,...

Technology2 weeks ago

Industrial Revolutions – How AI Refactors Finance, Manufacturing & Healthcare

Author: Lori Witzel, Thought Leader Alumnus, Spotfire, a business unit of Cloud Software Group   Today, Artificial Intelligence (AI) is...

Business2 weeks ago

Beyond money: What private equity needs to bring to ventures on the African continent

By Bryan Turner, Partner, Spear Capital   If you ask an entrepreneur or even the leadership team of a larger...

Technology2 weeks ago

Will AI lead to a better business?

Article by engineer Sara A. Al-Emadi, Research Associate at Qatar Computing Research Institute (QCRI – part of Qatar Foundation), an...