Connect with us

Banking

HOW IS FINTECH AFFECTING BANKS?

Published

on

Introduction

Fintech technology is booming and shaping the global financial system. The finance world will no longer be investment firms working off in-person advice and as financial innovators race to reach the market demands. Many fledgling businesses continue to shape the future of fintech trends and products in the industry. With the digital transformation approach, not only fintech created innovative ideas for interacting with potential customers but also emerged as an upgraded lifestyle for most millennials today.

Fintech is no longer jargon for the banking sector but now it is a relative term in technology in general. More than 70% of bank executives recognize customer banking as one of the most likely to be deranged by Fintech.

But have you ever wondered, what if the fintech sector continues to develop at breakneck speed? Does it mean the traditional banking ends here?

In this blog, we’re going to know how do financial services impact the bank sectors. So, without any further ado, let’s get started!

How does Fintech Affect Banks?

Biometric Sensors

Fintech in the banking industry addresses many innovations and one of them is biometric sensors. Biometric sensors and Iris scanners both are technological advancements that automated teller machines are observing. Besides, these tech advancements are ground-breaking since they would simply eradicate the requirement to carry your plastic card. Moreover, you’re not required to remember your pin.

Apart from providing convenience and ease of working, these technological advancements will also create ATMs more securely and it will allow you to access your own account without entering a password. These biometric censored ATMs use desegregated mobile appliances, fingerprint scanners, and eye recognition to identify the owner of the account.

Utilizing biometric technology introduces a huge sigh of relief for all the consumers who lost their ATM cards because now they can access their funds even when they don’t have their card.

Customer service chatbots

In recent years, fintech also introduced customer service chatbots that are bits of software created using machine learning that allows them to constantly learn from human interventions. Chatbots are efficiently used to streamline customer interactions such as handling queries and guiding customers to the required departments. They can perform various tasks which provide investment advice to their customers.

The rapidly growing technological advancements and innovation, chatbots have become an integral part of the banking industry that improves customer satisfaction and call agents to focus on additional value.

Mobile Banking

The usage of smartphones is rapidly increasing and it forces the banking sectors to come up with mobile applications that provide Fintech services to its customers. Many banks have their own mobile applications which have a user-friendly interface. These mobile apps also have fingerprint recognition features for the user and the application functions without any biometric hardware.

You can quickly access funds using a mobile application and perform various banking functions such as checking account balance, check deposit, pay bills, and much more.

Artificial Intelligence

Undoubtedly, Artificial intelligence and digital transformation are booming in traditional business. It has become an integral part of the financial-banking sector. The software solutions that banking industry uses for fraud detection generates alerts when any fraudulent transaction is done in the system. After generating alerts, it is backed up by the investigation and determines whether the attack was real or fake. To prevent customer data and cookies, banks are now adopting AI technology.

McKinsey says that adopting machine learning-driven statistical modeling and process automation can transform the AML tasks by implementing new efficiencies and innovations.

For instance, various data aggregation platforms can manage data and unstructured transactions for offering a 360-degree customer view. By implementing machine learning algorithms, banking sectors can leverage historical data and determine patterns of a fraud attack which will reduce human interventional up to 50%.

Branchless Banking

Fintech services are transforming the entire banking industry from a branching process to digital channels which reduces the bank’s dependency and affected mortar branches to function.

We can see that many banks are reducing their branches by adopting omnichannel banking services. You’ll be surprised to know that more than 9000 bank branches were shut down only in the European Union by the end of 2016.

Is FinTech worth the investment?

There comes various challenges that should be taken into account while implementing fintech services. But undoubtedly, it offers excellent potential to the banking industry to lower their operating costs and offer better services to their customers. If you’re not walking with the tech trends and the rising demand for fintech, you might lack behind the advances of your competitors. The fintech industry is affecting the banking sector is imminent, it depends on the bank to decide how they’ll evolve in the advances to meet their customer needs.

Businesses specializing platform in fintechs technology are incumbents in the financial industry in many ways. Various advantages enable more innovation and deliver service to their customers more quickly compared to traditional banking sectors do.

The Bottom Line

The advances in innovations and the cutting-edge digital technologies coupled with customers’ demand for user-friendly banking experiences leads financial services to readily grasp the fintech technology. Today, fintech includes everything that we just mentioned in this blog. In the future, fintech is all set to become even bigger with retail banking software and other components coming under it. Only time can predict how fintech will affect the banking sector and the world in the future, but soon technology will rule finance. If you’re still unaware of the impact on the banking sector by fintech development, then you’re probably lagging.

Banking

LEGACY INFRASTRUCTURES MUSTN’T HOLD BACK INNOVATION IN FINANCIAL SERVICES

Published

on

By

Ian Perry, Principal Solution Architect at Zscaler

 

We are living in a changed world; one of hybrid home/office work and customers who may never return to bank branches and the services of the high street. According to RFi Group, 73 per cent of UK consumers interact with their main bank via digital banking at least once a week, and only 23 per cent believe nothing can replace what they get in a branch. Meanwhile, institutions including JP Morgan, HSBC and Nationwide have all indicated an intention to retain new higher levels of homeworking.

Now that employees work from a multitude of locations and customers bank and manage their money online the race is on to adapt processes, systems and support structures for safe, secure and productive homeworking and digital access for customers. Inevitably, this calls into question legacy infrastructures in financial services and how they might impact digital progress.

 

New tools, old systems?

The question is, how can banks and other financial institutions securely provide a higher level of remote access to their systems and applications when incumbent infrastructures were developed for an entirely different time?

Of course, the first thing to note is that banks aren’t coming at the problem from a standing start. Oft-cited legacy infrastructures have been added to over time so that many set-ups are now an on-premise/cloud-hosted hybrid. In fact, the finance sector has invested heavily in cloud infrastructures and cloud-based office applications.

The issue is how to harmonise this set-up so that it works for users and organisations as a whole. Here, there is work still to be done. It’s often the case that core banking applications remain in mainframe on-premise networks, whilst other operational tools reside in the cloud. Cloud-based Office 365 is a case in point. It supports digital working, as organisations need it to, but a range of its benefits and functions are at odds with legacy network setups.

Inevitably, when a product or service innovation reaches implementation planning stage, the starting point is the existing network, its systems and processes. The hard part is flipping this approach to assess what the resulting experience will be from the user point of view, but that is exactly what’s needed. It’s an approach that competing market disruptors have been ideally placed to adopt from day one.

However, that needn’t mean that financial institutions must completely overhaul their legacy infrastructure – something that would be expensive and complicated. They can still fully capitalise on the benefits of cloud-based services, among them flexibility, productivity, business continuity and the right customer and user experience.

 

Zero Trust without friction

One way is to take a ‘Zero Trust’ approach. As a result of recognised risks, 72 per cent of companies are prioritising the adoption of such a security model. This resets a data security approach from one that traditionally secured the perimeter to one that protects users, devices and business resources.

It’s a shift in emphasis from securing the network to securing each access and doing so without introducing friction into processes for users. We can think of legacy digital protection methods as a visitor getting a key from reception and being allowed to wander around the building, and compare that to a frictionless cloud experience in which a security guard shows the visitor directly to the room they need.

The Zero Trust model lends itself to high levels of remote access, which is exactly the situation organisations are now in. Employees work from anywhere, from a range of devices, and customers access services previously provided in-person online. Applications are no longer exclusively within the data centre, they are outside the network perimeter meaning that traffic must be enabled to run securely through the internet, rather than through corporate IT. Doing so not only equips organisations for the way things are today, it can also reduce the cost of individual site maintenance and enable the full benefit of cloud-based tools.

The technology now exists to make high levels of security completely invisible and so, with a growing number of security processes now taking place in the cloud, educating customers will be key. The industry must come together to improve user interfaces to signal what’s taking place behind the scenes.

With the right security approach, financial services can deliver on new access priorities to support their workforces and serve customers. Convenience, as well as security, should be the aim along with a strategy that ensures legacy doesn’t hold back innovation. That way, banks and other finance institutions can begin to fully capitalise on the benefits of cloud, adapt to meet customer demands as they evolve and compete in a disrupted market.

 

Continue Reading

Banking

BANKS OF THE FUTURE WILL BE ASSEMBLED, NOT BUILT: HOW BANKS CAN EXPAND AND INNOVATE BY RETHINKING THEIR PARTNERSHIPS

Published

on

By

Author: Kelly Switt, Senior Director, Financial Services Strategy, Ecosystem and Strategic Partnerships, Red Hat

 

The financial services business ecosystem has been radically reshaped in recent years and is arguably more dynamic and ripe for innovation than it has ever been. Banks that take bolder steps to build strategic partnerships have the potential to dramatically transform themselves and the industry. While open banking reforms have encouraged organizations to open up their architectures to each other, there is much potential still to be unlocked: beyond the minimum of meeting regulations by the deadline and exposing the APIs required for aggregation services, there is a vast untapped opportunity for creativity in joint business models. The kind of opportunity that has long since been grasped by web-scale companies and fintech startups.

 

Deutsche Bank, BBVA, and neobank bunq are examples of banks that have understood the value of creating open finance communities. However, the majority of financial organisations are yet to embrace deeper collaborations that truly take advantage of external parties’ ready-built solutions, which would save time and resources and enable inhouse teams to focus on differentiating their business where it really counts. So how can an organisation break free of legacy structures and attitudes to better integrate and engage with partners?

 

Step 1: Adopting a growth mindset

Establishing deeper strategic relationships with partners requires a mindset shift for much of the industry. Traditionally, banks have tended to see third parties as vendors, treating the relationship as a transactional exchange, in the context of legal agreements that set forth the provisions and conditions of the services to be provided. Instead, banks need to adopt a growth mindset that encourages organisations to look beyond their own four walls, and embraces participation in a wider community. By engaging with an ecosystem of partners and treating them as a valuable additional set of experts, banks can accelerate problem-solving and reach their business goals faster.

 

Step 2: Aligning internally as an organisation

Before bringing in a partner to tackle a business problem, an organisation needs to conduct an internal assessment. It’s important for all departments within an organisation (IT, sales, marketing, etc.) to contribute their perspective on unpacking why a problem exists across the organisation: what are compliance and risk issues? What are the technical challenges? In what ways is the business impacted? Once everyone is grounded on why the problem needs fixing, it is a much clearer path to identify both the business and technology capabilities needed to solve the problem – i.e. the tools as well as the people skills. If different departments aren’t set up to engage with each other, it’s time to dismantle barriers and build bridges to ensure everyone is included in this discovery phase.

 

Step 3: Be open with partners

When the business has galvanised around its key objectives and the capabilities it needs to move forward, the organisation can look at engaging partners that have experience and expertise in the right areas. The more information that is shared with a partner about the company’s challenges, opportunities and goals, the more empowered and committed the partner will be to help meet the desired outcomes. Armed with insights, partners can help connect the dots and invite further parties to a project, leading to a network effect that benefits both the organisation and the wider ecosystem. To ensure that everyone continues moving in the same direction every step of the way, it is crucial to have transparent discussions in which ideas can be exchanged freely, and to make decisions in an open and collaborative way. Disagreement and constructive feedback must be encouraged – partners should be empowered to speak up with concerns – as this is an important part of mitigating risk.

 

Step 4: Humanise business relationships

Business relationships are personal relationships. The most successful ones are built on mutual understanding of what makes each other tick, what motivates someone to behave the way they do and what drives their performance. Getting to know people on a more personal level can create deep-seated relationships where everyone feels fully invested in driving the project forward. The banking sector may not be known for encouraging vulnerability, but revealing a bit more of the human in us is a key ingredient for building trusted relationships. The pandemic has added urgency to the need for greater empathy to lead people through difficulties, and has shown how people can come together through shared emotional experiences to better manage adversity.

 

Step 5: Build on a consistent technology platform

The technical foundation for engaging in any new partnership is a strong integration strategy. An organization may need to rethink its system architectures and shift towards open platform models. In the case of using containers to take advantage of cloud scale, establishing a common platform at the base of the technology stack that runs consistently across an organisation can provide more control, security and stability. A common application management layer that is agnostic to the underlying technology and based on open APIs gives internal teams together with partners greater freedom to collaborate, accelerating innovation. It helps avert the risk of ending up with many custom integrations, which can lead to cost overruns, outages or services-related issues for customers.

 

Unleashing future possibilities

Progress is able to happen much faster when people and teams work together. As more and more businesses in banking and adjacent industries wake up to the opportunities inherent in a move towards greater openness, we will start to see unprecedented innovation in financial services, and myriad other areas of our lives, creating better and more inclusive customer experiences for societies globally. Banks of the future will be assembled, not built.

 

Continue Reading

Magazine

Trending

Business3 days ago

HOW TO CREATE A PROFORMA INCOME STATEMENT FOR YOUR STARTUP?

There are two reasons why you are on this page right now. First, you are just starting with your business,...

News3 days ago

EXPERTS SHARE SIX STEPS TO RAISING MONEY SAVVY KIDS

The ability to manage finances is not something that is known naturally; it must be taught to us as we...

News4 days ago

CORE BANKING FINTECH OHPEN APPOINTS JERRY MULLE AS UK MD TO FUEL CONTINUED GLOBAL EXPANSION

Ohpen, the first fintech platform to bring a bank to the cloud, today announces the appointment of Jerry Mulle as its new UK Managing Director,...

Technology4 days ago

BIOMETRICS: BALANCING SECURITY WITH CONVENIENCE

Jean Fang, Authentication Product Manager and Joël Di Manno, Authentication and Biometrics Laboratory Service Line Manager at Fime   From...

News4 days ago

THE VALUE OF A HEALTHCARE ADVISER

By Rachel Janssens, principal consultant at Alexander Forbes Health   Navigating the vast number of schemes available and sifting through all...

Wealth Management5 days ago

WHAT WILL TRADING FLOORS OF A POST-COVID WORLD LOOK LIKE?

Ganesh Iyer, Chief Marketing and Strategy Officer, IPC   The last year brought around a monumental change to the way...

Business5 days ago

WAYS TO KEEP YOUR HYBRID WORKPLACE SECURE FROM THE IRREVERSIBLE DAMAGE OF A CYBER ATTACK

By Alex Bransome, CISO at Doherty Associates, specialists in managing and securing cloud services in the finance sector.   A recent in-depth study into 3000 UK...

News6 days ago

CONTOUR DRIVES TRADE GROWTH FOR BANGLADESH BUSINESSES WITH DOMESTIC LETTERS OF CREDIT

Aims to onboard 50+ corporates supported by Bangladeshi and international banks in next six months   Contour has launched its...

Business6 days ago

A LOW-CODE LONDON MARKET – THE KEY TO INDUSTRY FUTUREPROOFING

By Richard Farrell, Chief Innovation Officer at Netcall   Aged 332 years, the London Market isn’t new to the need to modernise....

Banking6 days ago

LEGACY INFRASTRUCTURES MUSTN’T HOLD BACK INNOVATION IN FINANCIAL SERVICES

Ian Perry, Principal Solution Architect at Zscaler   We are living in a changed world; one of hybrid home/office work...

Finance6 days ago

HOW CFOS CAN TAKE A HOLISTIC APPROACH TO ENTERPRISE AGILITY

Frederic Portal, Financials Product Marketing Director, at Workday   Whether brought on by a market shift, technological innovation or as we...

Technology6 days ago

HOW CAN THE PAYMENTS INDUSTRY PREPARE FOR SCA WITH BIOMETRICS?

By Vince Graziani, CEO, IDEX Biometrics ASA   Significant developments are afoot in the retail and payments industry, with vendors...

News6 days ago

NEXO STANDARDS EXPANDS SCOPE BEYOND CARD-BASED TRANSACTIONS

Advancements will ease integration of payment acceptance solutions across a range of transaction technology   nexo standards, which offers the...

News6 days ago

TRUSTONIC AND SYNTHESIS PARTNER TO MAKE PIN ENTRY POSSIBLE AND UNLOCK THE MOBILE POINT OF SALE MARKET

Cybersecurity technology leader Trustonic today announces its partnership with software and consulting company Synthesis Software Technologies to increase the opportunities available to businesses...

Business6 days ago

HOW TO ENHANCE THE CUSTOMER EXPERIENCE IN YOUR RETAIL STORE

Do you own your own retail store? Are you hoping that 2021 is the year you are able to grow...

Finance7 days ago

THREE STEPS TO ENSURE RECOVERY OF COVID LOANS GOES SMOOTHLY

In the wake of the pandemic, the government acted quickly to provide financial Covid support packages to help struggling businesses....

News7 days ago

SALESFORCE EXPANDS ITS FINANCIAL SERVICES OFFERINGS WITH NEW PRODUCTS FOR CORPORATE AND INVESTMENT BANKING

Tailored tools integrated into Financial Services Cloud support the industry’s transition to digital-first, helping deals get done from anywhere New...

Finance7 days ago

FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

Marieke Saeij, CEO of Visma | Onguard   It’s clear that Intelligent Automation (IA) is still very much an emerging...

Technology7 days ago

READING BETWEEN THE BUZZWORDS: DISCOVERING THE POWER OF INTELLIGENT AUTOMATION?

by Yad Jaura, Product Marketing Manager at Netcall    The nature of automation means that new technologies, ideas and solutions are frequently...

Finance7 days ago

FOR THE FINANCIAL SERVICES INDUSTRY TO THRIVE POST-COVID-19, AUTOMATION WILL BE KEY

By Anubhav Mehrotra- Vice President and Head of Financial Services, UK & Ireland, HCL Technologies.   The economic challenges emerging...

Trending