Connect with us

Banking

WHAT’S COMING NEXT IN FINANCE AND BANKING? TERADATA SHARES TOP 3 PREDICTIONS

Published

on

By Simon Axon, EMEA Industry Consulting Director, Teradata

ESG will define banking in 2022

Following the commitments made at COP26, the industry will be waiting in anticipation for new regulation and legislation that will impact the banking sector. Banks have a critical role in translating commitments into actions by influencing where, how and when money is spent. Whilst regulators, like the Bank of England and the European Union, have so far shied away from directing money flows to more rather than less sustainable businesses, pressures are mounting on banks to wield their considerable financial power in support of climate commitments.

2022 will see sustainability reporting become as significant as regulatory reporting. To do so, banks will need granular information on a host of factors that determine environmental impacts over time and risk across all sectors and all kinds of assets and investments. The challenges are not insignificant – specifically around the quality and comparability of emissions data in different sectors. However, banks will play a role as both customers and providers of data that can drive more positive environmental outcomes.

2022 will be a landmark year for cloud migration in banking, creating systemic risks

Too big to fail used to apply exclusively to banks and financial services institutions, but now regulators around the world are concerned about a different type of organisation creating systemic risks to the global financial system. As more banks move critical processes to the cloud – and we anticipate that this will increase through 2022 – reliance upon a very small number of dominant cloud service providers are creating risks to operational resilience. Regulators are likely to act fast in the coming year to ensure that these risks are mitigated and that banks can manage stressed exits from cloud providers should the need arise. To prepare for inevitable tests of ability to manage these stressed exits, and for potential actual cloud failures, as well as meet regulatory concerns, banks will begin to move to connected hybrid, multi-cloud platforms, allowing for a more flexible approach to cloud migration

AI in banking will progress from ‘hype’ to actual progression

The number of bank branches in the European Union fell from about 238,000 in 2008 to 174,000 at the end of 2018, European Banking Federation figures show. This was further accelerated as a result of the pandemic, with more customers moving their banking online out of necessity. We will continue to see additional branch closures in 2022 in an effort to increase efficiency and reduce headcount, as banks strive to further digitise processes.

As a result of creating these efficiencies, banks will have more resources to allocate to ESG, as well as customer transformation. Part of the customer transformation journey will be focused on AI adoption, which has received a lot of hype over the past number of years without achieving any notable traction to date. This will change in 2022 as banks seek to transform their approach to analytics in order to improve their stagnating analytic capabilities.

 

Banking

Cloud technology in banking: Why adoption is on the rise

Published

on

By

Alpesh Tailor, Executive Director at digital transformation specialist GFT

 

The banking sector has never shied away from innovation, whether it is new products to improve customer savings habits or new ways of interacting with people and business, but embracing new technologies such as cloud has, until recently, been relatively slow. However, leading global financial institutions such as Goldman Sachs and Deutsche Bank have accelerated their adoption of cloud, which can provide insights for efficient technology transformation across the sector.

We conducted research to measure 21 medium-size and large banks’ sentiment and operations regarding cloud technology. Examining the relationship between cloud technology and banking professionals, our research provides an insight into the overall finance sector’s perception of cloud technology and how its application can improve banking procedures and efficiency.

 

Scale-up abilities

A significant trend showed that the way people use their finances and banking systems has changed, particularly when it comes to payments and transfers. Our research revealed that 86% of bankers have adopted cloud services to harness its virtually unlimited scalability, citing a definitive change in transaction behaviour as the main reason for moving to the cloud.

In the world of retail banking, buy-now-pay-later, open banking, and contactless payment systems have revolutionised the way people use their bank, making financial management easier and more efficient. However, despite these evolutions, high street banks are playing catch-up to the challenger banks who possess fewer legacy processes and, therefore, an easier migration to new technologies, such as the full utilisation of cloud and artificial intelligence.

The cloud provides a dependable, scalable, and flexible data system that allows traditional banks to modernise quickly and stay abreast of the innovations that ‘born-in-the-cloud’ challenger banks are bringing to the market. An increasingly popular way of doing this is by adopting a hybrid and multicloud approach.

Most organisations are considering diversifying their cloud technology, with 76% of bankers now agreeing with the importance of implementing multicloud systems in order to benefit from resilience and security improvements made by the main cloud providers. These cloud ‘hyperscalers’ also provide regular updates and continue to release exclusive new services and platforms as they continue to innovate.

 

Optimising costs

Our research indicates that cost optimisation is a primary reason that banks are looking toward the cloud for their future storage needs, with 81% of bankers confirming they have adopted cloud technology to save costs.

Installing and maintaining on-premise IT systems is lengthy and costly for financial institutions. When using the cloud, however, purchasing and installing hardware is no longer required as the cloud service provider hosts all the required infrastructure. The management of the hardware is included within this, reducing the overall cost of IT support further.

 

 Organisational inertia

Technological innovations are usually heralded for their ability to streamline operations, making them quicker and more secure. Our research illustrates that 62% of bankers believe organisational culture and inertia to be a key challenge within the sector. Besides being flexible for scalability and cost, adopting cloud technology can bolster organisational efficiency, since banks can spend fewer resources managing the relationship between trading volumes and payment infrastructure. Bankers acknowledge this opportunity, with 95% of organisations understanding that cloud technology can reduce time-to-market.

 

Overcoming misconceptions with cloud technology

Misconceptions usually exist around any emerging technology and our research found that this theme continues with cloud technology.

43% of the bankers we spoke to admitted that security concerns have impeded full cloud migration – a concern that has frequently been confirmed when speaking to financial services institutions. However, cloud providers invest heavily in the security of their cloud infrastructure which, as a result, makes it almost always safer than its on-premise, client-owned counterpart.

One aspect of adopting the cloud that continues to cause concern, is that which is commonly termed the ‘digital skills gap’. More than half of banks claim a lack of cloud-savvy employees internally has slowed down adoption. At GFT, we understand that this is a major issue for the adoption of cloud technology in all sectors, including banking, and have committed to training and encouraging young people to learn the required skills and enter the sector. We recently launched our Manchester Innovation Hub – a dedicated location to support the upskilling and growth of tech roles in the north.

Going forwards, cloud technology is the primary option for banks seeking to evolve and scale their business, whilst minimising risk, time and cost. Bankers recognise these benefits and the overall findings of our research suggest they will continue to grow their investment in cloud technology. Whilst evolving traditional legacy systems is very challenging, cloud technology continues to advance and we believe that over time it will become a powerful mainstay within the financial services industry.

 

Continue Reading

Banking

Bringing Automation to Banking

Published

on

By

Ron Benegbi, Founder & CEO, Uplinq Financial Technologies

 

Automation is everywhere you look these days; from supermarkets to warehouses to automobiles. This prominent trend shows no sign of abating anytime soon. However, some sectors remain behind others when it comes to adopting automated technologies. Banking is one such segment, but there’s now evidence to suggest that this could be about to change.

 

What do we mean by automation?

There are a lot of ways to define automation, but broadly the term applies to any technological application where human input is minimized through design. Over the years, automation has evolved from a basic level, which took simple tasks and automated them, all the way to advanced automation powered by Artificial Intelligence (AI). In general, automated solutions work to increase productivity and efficiency within businesses and often result in a reduction in costs associated with human capital.

 

Ron Benegbi

Why has the banking sector been slow to adopt automation?

The banking sector has been built on a number of long-standing, tried and tested processes and protocols, which have been continually fortified and refined over time. This is one explanation as to why the sector has been so slow in adopting new, automated methods within its operations. Additionally, many major financial institutions have spent decades building their own internal legacy computer systems, which are often incompatible with modern automated solutions.

When combined, these two issues have caused a significant lag in the banking sector with regards to the adoption of automated technologies. This lag has created a market opportunity that a number of fintech providers have been able to exploit in recent years. Offering a more responsive and tech-first user experience, many fintech providers are leveraging the power of automation to better meet the banking needs of their customers. However, there is still time for the banking sector to start bridging this gap.

 

Does automation have a place in the banking sector?

The opportunity for automation to play a role within banking can be transformational.

To achieve this, it’s important that legacy organizations begin to learn from their more tech-savvy, smaller counterparts. If used effectively, automated financial solutions can greatly improve the experience of banking customers, both on a personal and business level. So, what exactly does this change look like, and how far away are we from seeing it become a reality?

A good place to start is the small business credit lending process, where not much has changed since the 1980’s. Over that period, the world has greatly transformed, but the methods used to assess credit worthiness have remained somewhat static. For the most part, banks assess data related to businesses’ accounting and banking records and from credit scores. For many businesses, especially the newer and less established ones, this antiquated approach is having a detrimental effect. In fact, it’s often cited as a contributor to the huge funding gap between SMBs and their larger counterparts.

 

How can automation benefit the banking sector?

By adopting more automated technologies, lenders in the banking sector can begin to assess more comprehensive information when making credit decisions. Notably, new methods exist, which enable additional data sets to be evaluated, in order to build a more accurate financial depiction of a business’ overall position. This data can come from sources like external market attributes, economic indicators, demographic data and exogenous shocks.

By leveraging additional data sets through new methods of financial automation, banks are now in a position to respond more effectively to small businesses, including those in emerging and evolving markets where there is a lack of conventional sources of information.

With more ways to access funding, facilitated by alternative data and automated processes, small business owners can improve their operational efficiencies and accelerate their growth efforts. In doing so, legacy oriented financial institutions can now better equip themselves in protecting against new, nimbler tech-based disruptors.

 

Continue Reading

Magazine

Trending

Business2 days ago

What Every Small Business Should Do

The majority of the difficulties associated with establishing a business stem from failing to accomplish the small things correctly. The...

Business2 days ago

5 Ways That Businesses Can Get the Most Out of Their Digital Marketing

Everyone knows that the world of marketing has been changing for the last two or three decades. The days of...

News2 days ago

Transact365 launches seamless cross border payments in India

Transact365 enables merchants to transact locally in India Merchants can partner directly with Transact365 without needing to source local partners...

Banking2 days ago

Cloud technology in banking: Why adoption is on the rise

Alpesh Tailor, Executive Director at digital transformation specialist GFT   The banking sector has never shied away from innovation, whether...

Technology2 days ago

A Smarter World: What role will electronics play in 2022

There has been a sharp increase in technology and devices designed to make our lives simpler, faster and more productive...

Business2 days ago

Top 4 Electronics Development from 2021

Phil Simmonds, Chief Executive Officer of EC Electronics.   As we embark on a new year of business, it is a good time to...

Top 102 days ago

Investing in workforce intelligence now, leads to an optimised tomorrow

Michael Cupps (Senior VP, Marketing, ActiveOps) discusses four critical ways in which a new world of workforce data improves organisational...

CRACKING THE CRYPTO CODE CRACKING THE CRYPTO CODE
Business2 days ago

The Evolution and Challenges of Crypto Regulation

Cryptocurrency regulations are evolving quickly around the globe with authorities responding to developing risks professed by criminals exploiting the latest payment...

News2 days ago

Europe’s first blockchain neobank, BENKER, opens for pre-registration

BENKER(http://www.benker.io/) is to become the first officially licensed blockchain neobank launched in Europe following approval by the Bank of Lithuania under the Electronic Money Institution...

Technology5 days ago

AI-Powered Fraud Prevention for Digital Transactions

By Martin Rehak, CEO of Resistant AI Fraud is on the rise, thanks to the rapid escalation of digital channels...

Top 105 days ago

The future of retail trading

Joe Jowett, CEO of StrikeX   The 2020s look set to be the decade of the retail trader. As the...

Business5 days ago

Dissecting the expansion of online checkouts

Daniel Kornitzer, Chief Business Development Officer   Card payments have long existed as the preferred payment method for online consumers....

Business5 days ago

How bug bounty programs can help financial institutions be more secure

Rodolphe Harand, Managing Director at YesWeHack   Financial services have been one of the most heavily targeted industries by cybercriminals...

Business5 days ago

Resolving the unintended friction of Web 3.0

Marten Nelson, CEO, M10 Networks   Media is buzzing about Web 3.0 and the metaverse. Companies and investors are scrambling to get...

Wealth Management5 days ago

Predictions for Alternative Data in 2022

Neil Chapman, CEO of Exabel   2021 saw various firsts for alternative data. The $1.6bn flotation of SimilarWeb evidenced the...

News5 days ago

Why Zero Trust and securing the supply chain is key to post-pandemic recovery

Jim Hietala, Vice President, Business Development and Security at The Open Group   Banking and finance have grown to provide...

Finance5 days ago

Five predictions set impact the finance teams in 2022

By Rob Israch, GM Europe at Tipalti   The CFO now has a very different set of responsibilities in comparison...

Finance5 days ago

Three ways to reduce uncertainty in financial services marketing

By Patrick Costello, Senior Product Strategy Director, Optimizely    According to Bain & Company, uncertainty is one of the key factors affecting marketing...

Banking6 days ago

Bringing Automation to Banking

Ron Benegbi, Founder & CEO, Uplinq Financial Technologies   Automation is everywhere you look these days; from supermarkets to warehouses...

Finance6 days ago

Why financial services is stepping into a new era

by James Mingard, Head of Retail & Finance at Maintel   When comparing industries, financial services has arguably fallen behind when...

Trending