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WHY SECURE APIS ARE THE KEY TO FINANCIAL CONTROL

APIs

Stefano Vaccino, Founder of Yapily

 

Consumers never owned their financial data. Banks controlled everything from how much money came into an account, to where that money was spent. While technology has already changed some of these processes, like the way we pay or move money around, when it comes to control over our data, the system has remained unchanged for decades. Until now.

Open Banking has disrupted the status quo. A decade on, and thanks to APIs that underpin Open Banking infrastructure, consumers now have more control over their financial data than ever before.

 

APIs

Stefano Vaccino

Handing back consumer control

Before Open Banking, consumers were at the mercy of the banks when it came to accessing their own data. There were only two ways to leverage the financial data in personal accounts to get better deals and access fundamental services. The first involved consumers physically printing or downloading a PDF of their bank statement to share with other banks or third party providers (TPPs).

The second saw banks and third parties utilise screen scraping. This meant users had to share their username and password to grant access to their bank account, to, for example, feed into money management tools or to access account information. Both options are long and cumbersome, but option two left consumers at risk of fraud and data breaches unless they remembered to change their passwords.

 

Reducing account fraud & data breaches

Many organisations have legacy IT systems which utilise screen scraping. This practice easily leaves systems open to data breaches. In fact, the Commonwealth Bank has reported that companies using screen scraping are at least two times more likely to experience account fraud. Not only is this bad for consumers, businesses can also be badly hit by the repercussions.

Thankfully, as of March 14th, a combination of SCA and PSD2 regulations mean that screen scraping has effectively been outlawed – significantly increasing the security of payments. The only secure way of accessing account information is through an API. Now, every individual payment requires a unique authorisation token, which once used, cannot be used again. Even tokens for recurring payments, such as standing orders for mortgage repayments, can be revoked and immediately rendered useless if suspicious activity is detected. This has greatly increased the security for consumers who make payments online.

 

Breaking down barriers with APIs

While in the UK, Open Banking was given a narrower focus than in the EU – only the nine largest banks were mandated to provide TPPs access to their services and data. However, it did specify a single, pre-defined API (Application Programming Interface) that was set as the standard for integration. While not as immediate as expected, banks did eventually make good progress in opening up these APIs, and it has led to the creation of new services. Moreover, APIs have been instrumental in handing back control of financial data to consumers.

 

Heading into an Open Finance future

Thanks to these APIs, we are seeing the global growth of Open Banking. Now, consumers can choose when to stay or go, as well as how much information they want to share, with whom and for how long. This is an important move given that as many as 15 million people in the UK could be using the wrong financial services product for them. In fact, around two million people miss out on the best interest rates and four million are denied credit each year.

Further, we’re not only in a world already reaping the benefits of Open Banking. We’re also moving towards a financial services industry powered by Open Finance, where laborious processes such as mortgage applications will be gone. Data that would have historically taken weeks or months to manually compile and send to the bank for review will be collated in minutes. Credit scores to ID verification, property affordability and residential checks will all be securely and seamlessly accessed thanks to open APIs. This will greatly reduce the lag time between application and acceptance or rejection – giving consumers greater control over the whole mortgage process.

In a world powered by Open Banking and Open Finance, consumers now have more control over their financial data than ever before. We can expect to see financial inclusion for the unbanked and a better experience for those with existing products and services.

 

Finance

AI: CUSTOMER FACING EMPLOYEES’ BEST FRIEND IN THE FINANCIAL SERVICES INDUSTRY

By Ryan Lester, Senior Director, Customer Experience Technologies at LogMeIn

 

We’ve all heard the old saying “money talks.” Well when it comes to customer loyalty and retention, good customer experience talks much louder, with 30% of customers leaving a brand and never returning due to a bad experience.

The truth is, there are a lot of companies with similar products and services, but that doesn’t mean that differentiation is impossible. So, what’s the solution? For financial services, large and small, customer experience is becoming the key competitive differentiator and the best way to deliver an impactful experience is to empower customer-facing employees to do their best work. Artificial intelligence (AI) is enabling these employees to create remarkably better customer experiences, resulting in customer loyalty, advocacy, and overall growth.

For financial institutions that have been considering new strategies for improving the quality and efficiency of their customer experience, here are a few ways AI can enable them to deliver the “human factor” that good customer experience demands whilst ensuring customer facing employees can provide a more positive experience for customers.

 

Increase employee productivity

How much of employees’ time is spent searching for answers to questions? Do they ever have to put customers on hold or even step away to get additional help? AI helps provide front-line employees real-time guidance so they can spend less time looking for information and more time solving problems. An AI-powered chatbot, for example, can be listening in the background of a conversation helping point employees to the right data, solutions, and processes to resolve customer issues faster than ever before.

 

Deliver a consistent customer experience

When banking customers engage with their financial institutions, they measure the speed and accuracy of the service through two criteria. First, how quickly can the system access their account and deliver the correct information? Is it faster than a human could type it in and share it? And second, if they eventually do need to be connected to a live customer support agent, is their information captured and passed along accurately? AI technology takes those general queries off the customer support team’s plate, providing a quick, accurate, and effective response. If a query needs a more in-depth response, AI can hand it off to support staff to address.

Not only this but leveraging a centralised, AI-powered knowledge solution ensures every employee has access to the same, updated information, so no matter who the customer speaks to, they can be assured that employee responses are both consistent and accurate across the board.

 

Accelerating employee training and onboarding

Like any industry, employee turnover is inevitable and can be costly. But, not training new employees correctly or in a timely manner could be much more costly. When it comes to financial services there is a lot to learn, whether it is something simple like the process for checking an account balance to all the nuances associated with mortgage loans. AI can support on-the-job training by helping new employees answer questions confidently, correctly, and much quicker than they could before.

 

Improving employee satisfaction

Today’s banking customer has all kinds of new ideas about their banking experience. “The Amazon Effect” has successfully raised consumer expectations to the extent that a consistent, personal, and relevant experience is the new normal. As a customer, how many times have you been told “I’m sorry, I don’t know the answer?” Customers want solutions to their problems and employees want to be able to deliver those solutions as efficiently and effectively as possible. AI assisting in the background helps minimise those negative moments – making employees job easier, less stressful, and overall more enjoyable.

 

Identify knowledge gaps

Do you know all the questions employees are getting asked? Do you know what’s easily answered and what’s not? Real-time insights allow knowledge managers to keep up to date on frequently asked questions and gaps in current resources. This allows them to strategically improve or add content where needed.

 

Augmenting customer service

Whether talking with an AI chatbot or a personable customer service team member, the modern banking customer has high expectations for convenience, speed, and security. Which means that the technology you choose to deploy and how you deploy it is now just as important as who you hire and how you train them.

Today’s AI solutions won’t replace customer service agents or get in the way of the human factors that drive the customer experience. On the contrary, they augment it, allowing the business to do more without adding human resources. The higher the quality of a AI chatbot solution, the better it will be at taking the routine requests off the plate of customer service agents—giving them more time to provide a personalized and positive experience for customers.

 

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Finance

TIPS TO PROTECT YOUR CASHFLOW DURING THE COVID-19 PANDEMIC

By Rita Cool, Certified Financial Planner at Alexander Forbes Financial Planning Consultants

 

The full impact of the COVID-19 pandemic is as yet unknown, but individuals have already begun to have their lives disrupted by the country’s economic shutdown, with retrenchments, salary cuts and forced unpaid leave making them take stock of their financial position.

The basic principles of financial planning are especially relevant at this time, but in the short term, cash flow is more important to many people.

To help safeguard you and your family’s financial security, here are some tips to follow to make sure you’re making your money work hard for you:

  • Draw up a budget – this is especially relevant if you’re worried about possible retrenchment of yourself or your partner. This will help you know how much you need to cover your basic living expenses and where you can save money. Don’t only look at what you need to spend money on, but also when you think you will need that money. Perhaps you paid school fees upfront at the beginning of the year, or your car registration is only due again next year.

    Rita Cool

  • Check your bank fees. Are you in the best structure for your needs? Are you paying for services that you never use? Consider moving banks to get a better deal.
  • Banks have waived the Saswitch fee payable for withdrawing cash at another ATM other than your own bank, but if you’re doing this, be aware of when this switches back as you can end up paying almost double the bank fees.
  • Did you know that you start paying interest immediately if you draw cash from a credit card and that you do not get three or six months’ interest free?
  • Go through your house while you have extra time and identify potential items which you could sell, as this will free up cash.
  • Where possible, pay cash for items as the interest rate on hire purchase items is very high and you pay around 20% more for those items than the sticker price. If you cannot afford the item and you don’t need it right now, wait.
  • Look around for bargains online rather than driving around. There are some good sales on, and you can support businesses that need your help.
  • At the same time, be aware of spending extra cash you could be saving towards your financial safety net. There are lots of deals available, so balance the need for the 70% off bikini or new laptop with being cautious about the future.
  • Use store coupons and discount vouchers. The main food retailers have loyalty programme structures that can be tailored to your specific spending patterns. Make sure you claim point or vouchers but look out for monthly costs to belong to a rewards program. Ask yourself if your monthly savings validate the cost. Optimally a reward scheme shouldn’t cost you money.
  • Check with your insurance company if your premium can be reduced because you’re driving less during lockdown.
  • Check your current insurances. Do an insurance rebroke. Make sure you are covered for what you need and take things off the list that you do not have any more and add what you have bought since the last update. Make sure you are not under or over insured and that your premium is market related. The cheapest premium isn’t always the best so be aware of exclusions and excesses and make sure you can afford the excess if you need to claim.
  • In most cases you can reduce your monthly insurance premiums by not having a cash pay-out in the future. If you want a pay-out, save the extra premium in an investment product, not a risk product.
  • Be wary of consolidating debt. You might pay a lower interest rate but it might well be over a longer period so the total interest paid will be higher. If you have debt issues, set up a debt plan with dates and goals to reduce the debt little by little. Do not give up.
  • Be aware that payment holidays are not a free loan, you still owe the money and you’re paying interest on it. Check with your service provider.

 

Remember that the pandemic will pass. Try not to panic as this may lead to rash financial decisions, which could have an impact on your finances later down the line.

 

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