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HOW OCCUPANCY DATA CAN SUPPORT THE BANKING INDUSTRY IN CHALLENGING TIMES

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

SEIZING THE OPEN BANKING OPPORTUNITY

Nick Maynard is a Lead Analyst at Juniper Research

 

Open Banking has made significant progress in 2020, having recently launched across much of Europe and now starting to emerge in other markets too. And there are two primary reasons why Open Banking is disrupting the banking industry so much:

  • Banks have begun to discover the real competitive advantage of a more open approach to banking. Offering a superior Open Banking experience to customers can be a compelling differentiator from other competitors as part of a wider digital app experience. Open Banking also creates a level playing field in markets where regulatory intervention has led to Open Banking deployment. As all banks are required to deploy APIs in this scenario, the situation is the same and does not put any one particular bank at a disadvantage.
  • Legislation – for example, in October 2015, the European Parliament adopted PSD2 (the revised Payment Services Directive). By early 2020, major banks in the EU had adopted Open APIs. There have however been many cases of late deployments of APIs and problems with the availability of APIs.

 

Nick Maynard

The Disruption Factor

Open Banking is a major disruptive factor for banks. The reason for this being that it opens up account data to both AISPs (Account Information Service Providers) and PISPs (Payment Initiation Service Providers), which can attempt to carve out a role in the banking area.

  • AISPs: These new vendors are able to access transaction data and balance information, as well as related information. This has, in particular, led to the rise of vendors such as Emma, Yolt and Connected Money. These vendors combine information from multiple sources, adding value to the user.
  • PISPs: In this case, the vendors are able to leverage Open Banking API connections to initiate payments directly from the bank accounts in question. This means that these players are able to bypass traditional payment methods, such as cards. Vendors such as American Express and PayPal have already launched solutions that have taken full advantage of this action.

 

PSD2 Changes

Generally, the implementation of the new PSD2 European regulation for electronic payment services effectively reduces the entry barriers for new digital players. It also opens up banks to the potential for competition, enabled by their own APIs. This allows these players to compete with existing services in fields currently offered by the banks. In the case of AISPs, it is possible that third-party applications could displace the role of the apps from incumbent players, which would dilute the bank’s relationship with their users.

As with any fundamental change to markets in the banking area, there is the potential to bring a number of both opportunities and challenges to consider with Open Banking.

Open Banking Opportunities & Challenges to Consider

Source: Juniper Research

Banks and other parties that are looking to become involved in the Open Banking ecosystem must weigh these opportunities and challenges carefully. Open Banking certainly needs a more collaborative approach than traditional banking models, which will require significant effort to make them successful.

 

The Forecast for Open Banking

The total number of Open Banking users is set to double between 2019 and 2021, reaching 40 million in 2021 from 18 million in 2019. The ongoing Coronavirus pandemic is increasing the need for consumers to have the clarity of combining their accounts and gaining insight on their financial health, and also boosting momentum in the adoption of Open Banking.

This extraordinary growth is being driven by Europe, where the regulator-led approach to Open Banking has created a standardised market, with low barriers to entry. This contrasts with markets like the US, where a lack of central regulatory intervention is limiting growth potential.

 

Open Banking – Delivering Opportunities and Threats

It is worth noting that Open Banking can be both a threat and an opportunity for traditional banks. While Open Banking exposes user information and access to potential competitors, this threat has the potential to affect all players in the market equally. Consequently, established banks must create innovative Open Banking services that will provide benefits for the user, while also attracting customers from less innovative competitors.

Payments will be critical to the emerging Open Banking ecosystem; accounting for over $9 billion in transaction value in 2024. However, payments in this ecosystem are at a particularly early stage. While eCommerce is dominated by card networks, there is the potential that this role will be eroded over time by ‘direct from account’ payments. Consequently, card networks should look to offer Open Banking-enabled payment services, in order to offset the risk of future disruption.

Open Banking Users in 2021 (m), Split by 8 Key Regions: 40 Million

Source: Juniper Research

 

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Banking

2021: THE NEW-NORMAL LIFECYCLE FOR BANKING

Laura Crozier, Global Director of Industry Solutions, Financial Services at Software AG

 

It would be impossible to talk about predictions for the banking industry in 2021 without mentioning the cataclysmic impact that 2020 and the pandemic has had on people, businesses and countries.

Unlike with the global financial crisis, banks have been able to step up as “good guys” this time around, rebuilding their reputations as well as accelerating digital transformation. One of the main outcomes is increasingly smart, efficient online payments.

In 2020, the banking industry innovated like never before. This is the new normal. Overall, customers and society will be the beneficiaries from the changing industry. Here are my predictions:

 

Reputations are reborn

Banks across the globe pulled out the stops to integrate and adapt systems and processes to help customers during the pandemic. They offered accommodations in loans, assisted governments with the distribution of financial relief, and supported consumers by upping contactless spending limits and virtual deposits.

In 2021, banks will risk losing that rosy glow as economic circumstances drive them to deal with non-performing loans, mortgage foreclosures, layoffs etc. But, beyond their role in society as providers of capital and liquidity, banks will invest to sustain their reputations as trusted and good corporate citizens and use their power to persuade their customers and providers to adopt higher environmental and ethical standards. This will be in the areas of bank carbon-neutrality, sustainable financing, serving the unbanked, diversity and gender equality (as the number of women running a major global bank will double from one (Jane Fraser at Citi) to two). It’s a start.

 

Coming of age in the way of working

Back in Q1, when bank employees cranked up their laptops on their dining room tables, banks that were strategically undertaking business transformation accelerated their efforts. Those that were tactical, or on the fence, now understand with painful clarity that this work must be undertaken strategically.

Cracks in process and the way of working and their resulting risks can be crippling. Especially from a back-office perspective, it is not enough to rely on “organisational memory” and collegial proximity for work to get done right. Advanced banks pushed the boundaries of remote work, and the proof of concept was successful. So, they’re doubling down on developing digital twins and moving to the cloud. They’re adopting the hybrid office/WFH approach to reduce health risks and reduce cost permanently. The watercooler will never be the same.

 

The death of cash

Ok, maybe the rumours of the death of cash are a bit exaggerated since there will always be the need for cash (and, to some extent checks; the USA, for example, cannot seem to live without them). But the pandemic has permanently changed the way that consumers and small businesses bank, and the demotion of cash has been accelerated by a decade by the pandemic. For example, the Norwegian central bank said that cash payments in that country have plummeted to just 4% of transactions since March.

Implications? It will be critical to continue evolving payments to be smart, safe and flexible to compete in new world, in both retail and commercial banking. Also, the permanent change in the mix of channels will see banks’ face-to-face engagement with customers fade. Branches aren’t going to go away entirely, but they will be reserved for high value activities – by appointment only. To compensate, the personal touch has to be delivered digitally and intelligently.

The role of the bank as a “financial wellness partner” is being born. Banks will use customers’ data, not just to personalise and differentiate banking experiences, but to make recommendations for products and services beyond traditional banking from across their ecosystem to serve their customers well. Just as customers own their cash (physical or digital), in the future they will demand that they own their data (and can share it with whom they choose). Then retail and commercial clients will share their data in return for value.

 

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