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Strategic account planning is a systematic approach to boosting success in acquiring, retaining, and expanding crucial accounts, ultimately maximizing long-term revenue.

It entails evaluating the business requirements, objectives, and organizational structure of an account. The goal is to ensure that the delivery of your product or service aligns with and exceeds the expectations of key accounts.

In this article, we'll explore the intricacies of crafting an account plan using a purpose-built template to streamline a comprehensive analysis.

Leveraging the Power of an Account Planning Template

The cornerstone of an effective strategy resides in the meticulous design of an account planning template. Serving as a guiding framework, this tool ensures a systematic organization of information, safeguarding against the inadvertent omission of crucial details. 

While templates may differ, a comprehensive one typically includes sections exploring vital aspects like the customer's business strategy, initiatives, and organizational structure. It also encompasses elements such as product and revenue audits and competitive analysis, as noted by Prolifiq.

This structured approach provides a holistic view, equipping businesses with a strategic roadmap for cultivating and sustaining successful client relationships.

Unraveling the Layers of the Customer's Business Strategy

Before diving into the intricacies, it is crucial to establish a solid understanding of the customer's overarching business strategy. This foundational step involves comprehending their long-term goals, identifying target markets, and grasping their unique value proposition. This not only lays the groundwork for strategic alignment but also positions your offerings to resonate with their overarching vision. 

The importance of strategic alignment is emphasized by Forbes statistics, revealing that a modest 5% boost in customer retention can result in significant profit growth. This growth, ranging from 25% to 95% over time, underscores the substantial impact of aligning with a customer's business strategy on long-term financial success.

Deciphering the Key Business Initiatives

Understanding the customer's key initiatives is essential for customizing your products or services to meet their unique needs. This involves uncovering their short-term and long-term projects, as well as addressing any prevailing challenges. Such nuanced comprehension empowers you to position your offerings as tailored solutions that directly contribute to their overarching success. 

McKinsey's findings further underscore the evolving consumer landscape. Amid the COVID-19 pandemic, three-quarters of customers have transitioned to new stores, products, or buying methods, challenging the traditional notions of loyalty. 

In response, McKinsey emphasizes the increasing importance of personalization for customer retention. Research reveals that 71% of consumers now expect personalized interactions, with 76% expressing frustration when this expectation goes unmet.

Navigating the Organizational Chart and Identifying Key Players

Recognizing the paramount importance of extracting greater returns from key accounts, Gartner highlights that 70% of Chief Sales Officers (CSOs) prioritize this objective. To achieve this goal, it is imperative to possess a thorough understanding of the organizational structure. 

Effectively communicating and collaborating necessitates the identification of key decision-makers, influencers, and stakeholders within the client's organization. 

With this knowledge in hand, you can customize your communication and engagement strategies to align seamlessly with the nuanced dynamics of decision-making. This tailored approach enhances effectiveness and fosters more meaningful collaborations.

Scrutinizing Products and Revenue Streams

The provision of valuable insights and recommendations hinges upon a comprehensive audit of your customer's products and revenue streams. A deep dive into their product portfolio, pricing strategies, and diverse revenue sources is essential. 

This analytical approach not only allows for the identification of potential growth areas but also enables the pinpointing of strategic priorities. Embracing this proactive stance ensures that your company remains agile and responsive to the ever-changing landscape of business demands. 

Nevertheless, the journey of adaptation is undeniably challenging, as underscored by Forbes. They report that a staggering 85% of companies express that their organization's ability to navigate change often falls short. This underscores the ongoing struggle many businesses face in meeting the dynamic nature of the business environment.

Delving into Competitive Analysis

A comprehensive account plan goes beyond internal considerations and includes a meticulous assessment of the customer's competitive landscape. This involves identifying primary competitors, conducting a detailed analysis of their strengths and weaknesses, and critically evaluating how your products or services compare. 

The insights derived from this process provide a strategic advantage, enabling you to position your offerings effectively in the market. 

In summary, the art of structuring an account plan involves a strategic process that demands careful consideration of various facets of your customer's business. This comprehensive approach guarantees a profound understanding of the client's needs, goals, and challenges. Simultaneously, it forms the bedrock for cultivating stronger and more meaningful relationships.

Aligning strategies with the client's vision and leveraging organized account planning positions you as an indispensable partner in their success journey.

1. Customers want better money management 

Many households are taking a more cautious approach to spending due to soaring prices, causing consumers to reconsider their choice of payment methods. 44% of respondents have changed their habits as a direct result of the rising cost of living, the majority of whom are searching for options that enable them to track their spending more accurately. 

Debit cards were the most preferred online payment method for those who had changed their payment habits, with 59% of respondents paying via debit card in the month leading up to taking our survey — a 5% increase since 2021. Digital wallet use has also experienced a surge - perhaps, in part, thanks to their money management features, with two-fifths (41%) using them more than they did a year ago. Interestingly, 16% of those who changed their payment methods are paying with crypto more frequently.  

On the other hand, credit-based payments are trending downwards, except for credit cards which remain the second most popular online payment method (51%) behind debit cards. They're also the preferred way to pay for big-ticket purchases including long-haul flights, holidays and household appliances. 

2. Cash is turning digital

Although the majority of consumers (52%) are using cash less often, it still makes up almost a third (31%) of in-person transactions. Respondents still hold cash in high regard, with 59% viewing it as the most reliable payment method and 70% stating they would be concerned if they couldn’t access it. 

As well as remaining a popular choice for in-store payments, cash is also establishing itself as a prominent online payment method, suggesting it is here for the long haul. 

In the last year, eCash payments — online transactions paid in cash — have increased. And in further good news for the traditional payment method, 47% of respondents would prefer to make online purchases in cash, and 44% would buy online more often if they could pay in cash. 

Although our research didn’t focus on the reasons behind this trend, we imagine the cost-of-living crisis is likely a factor. 26% of those who have changed their payment habits due to inflation are using eCash more often, a method that would enable them to monitor their online spending more closely. 

Another benefit of eCash for the increasingly tech-savvy consumer is that it can protect against online fraud by acting as an added layer of security. Consumers can make online payments without sharing any sensitive financial details. 

3. Security is a top priority, but not at the cost of experience

For 44% of respondents, security is the main concern when paying online and, if it’s not addressed upfront, this is a barrier to the first transaction for consumers.  70% don’t feel comfortable sharing their financial details online, and 62% would worry if they weren't asked for any security information before completing payment. 

44% are happy with the current balance between security and convenience when making online payments, and 23% would only accept additional security measures if the inconvenience were minimal. This suggests that any advancements to security at the checkout must not interfere with a convenient consumer experience as the balance is key for customers. 

4. A golden opportunity in embedded payments

Embedded payments are one of the hottest fintech trends. Our research confirms its untapped potential, and although consumer awareness remains low - 49% haven’t heard of the term embedded payments - many have likely used the technology unknowingly.

31% can see themselves using embedded payments within the next two years if the technology becomes more widely available and they learn more about it. The 51% who have heard of the term also feel upbeat about the future of embedded payments, with the majority believing they’re safer than traditional payments. 

Given consumers' reduced appetite for risk and their unwillingness to accept more friction, embedded payments represent a huge opportunity for merchants. And with some education on the benefits of adopting the technology— particularly how it can satisfy consumers’ desire for a balance between security and convenience, it could be a win-win. For merchants, it could build a promising revenue stream, whilst boosting trust and increasing loyalty amongst consumers.

What does the future hold? 

Inflation looks set to continue rising, which means in turn consumers will likely become even more selective with their spending, particularly online. At the same time, they'll also continue expecting to pay securely with a frictionless checkout experience. 

For merchants, offering a variety of payment methods at the checkout continues to be a priority, and if there were any question marks over cash, the impact of the rising cost of living has established it as a must. Customers want more flexibility and control so appealing to this with a broad selection of payment methods will be key. 

One more complex consideration for merchants is how they build relationships with consumers by engaging and educating them on new technologies. For example, embedded payments increase security and are more convenient for consumers, however ongoing education about the benefits can only be a good thing to drive mass adoption. 

Read the full Lost In Transaction report: Consumer payment trends 2022: Navigating online payments in the age of uncertainty.

About the author: Chirag Patel is the CEO of Digital Wallets at Paysafe.

When it comes to setting the right price point, the elasticity function is the notion to consider. It is about finding the given price point to help predict the number of products being sold. Such a method is directed at boosting revenue and sales volume. If a business is there to grow and prosper, establishing good price points and using price management software is a must. 

What is the price point concept all about?

The idea standing behind the price point is evaluating the current pricing strategy and determining its weak sides. Yet, if one wants to define the price point phenomenon, it is a special retail price allowing businesses to maintain a reasonably high demand for a specific product or service. Want to make the most of your pricing strategy? Setting a good price point is the way to do that. 

The significance of price point thresholds 

Making a psychological connection between a price and a product to attract consumers is considered to be the price point threshold. It is important because it creates a favourable environment for both sellers and buyers. First, consumers pay the highest price. Second, they remain loyal to the brand. Some even argue that the price point threshold is the best strategy for maximising revenue through a pricing strategy. 

What is the core of price point functionality? 

Price points should be constantly adjusted. When doing this, always consider factors like your company’s vision, prices offered by competitors, volumes of supply, degree of demand, and the customer’s perception of the product.

Considering all these elements can be problematic. Luckily, there is advanced price management software available. It can help companies manage price points sustainably. Yet, to get the most out of the price point phenomenon, you can use several approaches. 

Approach 1: Use testing for price points

Reasonable price points are achieved through trial and error. As with many approaches, knowing what customers expect to rely on is running a bunch of tests. For the price point phenomenon, consider A/B testing.  

Approach 2: Integrate advanced solutions

It is hard to underestimate the importance of using advanced solutions to analyse the market and find grounds for adequate price points. To save time and resources, consider price management software. Such software is a massive digital aid capable of analysing and monitoring amounts of data that the human brain cannot handle. Price management software is a scalable and impactful strategy within all the stages of establishing price points.

Approach 3: Engage in price point analysis

Improving the quality of price directly depends on analysis. This strategy requires analysing data and optimising it while engaging in a phase-by-phase strategy. Along with optimisation, one should think about price perception at the same time. 

Here’s how the system works. You have a product with a price of $20. You want to sell the product to a limited pool of clients. When selling such a small batch, you can both use the basic price or set a higher one. Such a leap value approach offers a price strategy that a business can use at any given moment. 

Why does the system work? First and foremost, it serves as a great strategy for companies entering a new market. Second, it offers insights into what consumers expect for a particular price. Third, the system is there to create a feeling of urgency and limited demand. All these aspects create an impression that consumers get a good deal. 

Approach 4: Using a skimming model to find an entry for a price point

The skimming model is utilised to set a price favourable for companies entering a new market. It helps set an optimal price. What type of price is it? It is the price that leads to profit maximisation in the most time-effective manner. The skimming model often results in a higher price when a new product enters the market with a subsequent lowering of a price. 

Approach 5: Consider price perception

The factor of price perception is important for understanding how loyal the customers are to your brand. It works through price points and the perception of such. When making a purchasing decision, a consumer should have a feeling that one is getting a good deal. Remember, customers perceive your products in a subjective manner. The same is true with their shopping experiences. Yet, setting an appealing price boosts the shopping experience, thus having a positive impact on your brand’s perception. 

Approach 6: Putting price points into a bundle

Selling goods in bundles for a more appealing price is a reasonable price point strategy. When offering consumers several similar products for a decreased price, you both create the impression of a good deal and increase the sales volume. In the end, it will boost the revenue and increase customers’ loyalty

Approach 7: It is all about monitoring

Being a step ahead of your competitor is vital for reaching business objectives. It can be achieved through constant monitoring of price points established by rival companies. By tracking the market, you learn about the mistakes of others. In such a context, you can both avoid those mistakes and ensure that your business will be the one at the top. It is often worth having a market analyst on board. The professional will provide some valuable insights that can be easily turned into profitable price points. 

Considering the above, the maximisation of revenues through price points is not only possible but much needed. There are various approaches to getting adequate price points. Be it extensive market analysis or price management software, the more time and effort you put into understanding and setting a price point, the greater the likelihood that you will receive additional revenues, sales volumes, and customer loyalty. Simply put, price points are the strategy business cannot afford to avoid. 

1. Keep better track 

With every business, there is one recurring problem, keeping track of the work done so far and the work in progress. Especially when you have ten or more employees, somehow you easily lose touch with what is left to be done or what is already done. For a more productive output, however, you’ll need better control. That's where software kicks in, doing the job for you. Good business software easily outmanoeuvres pen and paper. Every software has a timetable sheet and worksheet, where you can keep tabs on what the employees are currently doing and what they have finished so far. And it is beneficial for you too, as you can plan projects based on the work done so far. 

2. More customers 

With excellent business software, you can attract more customers by simply looking at the data available, according to which you’ll know how sales and services have been going so far. You can also reach a bigger number of clients via good software, for example, take out food if you are in the restaurant world. According to the data provided by the algorithm, you can drastically upgrade customer services, attend to complaints, reevaluate the costs of transport and revenue, and more. For example, if you get job shop scheduling software, it will provide you with all the above-mentioned services and more. This software is also providing you with the possibility of looking at your cash flow, profits, and losses, and a better look at the available human resources in your business. The best part is the ability to connect to your customers effectively, as you’ll have a breakdown of all the feedback you received. This kind of control and better overlook makes you more motivated and gives you the chance to improve. 

3. Stay ahead

Do not be fooled, all your competitors are already in the game. The ones trying to stay ahead see the importance of good software. Information is power, so they say, and it has been true for a long time. The more you know about the flow of your business the better, as it can give you the chance to rethink your marketing strategy and maybe change the direction the company is heading. With more information, you can evaluate the stock movement and production, if it is too low or not high enough. As everyone is trying to make a name for themselves, you’ll have to work twice as hard, luckily you are not alone and at least you know what aspects of the business to target and invest more and where to cut down a bit. 

4. Reduce costs 

A decade ago, you would probably have to pay at least five people to make sure everything is going as planned and all the information is available to you when you need it. Now, improved software takes over and you save a lot of money, thus you can either redirect into promotions, holiday bonuses or expand the business. And it is not only efficient, but rather you’ll avoid certain mistakes from happening, and we as humans sure make them. 

Do not think twice, as your business is surely much more valuable to you. Good software provides all the services you’ll need to effectively stay in touch with your company even when you are not around. 

Stefan Pajkovic, CEO at TradeCore, shows Finance Monthly how fintechs can better understand and make use of the potential of data.

The majority of fintechs aren’t using the data they collect to their full potential, which is strange given its huge value. It can inform better, engaging communications strategies, lead to new development of products and services, as well as add greater personalisation and understanding of a business’s customers. This brings benefits to a fintech's customers, but it also means that fintechs are able to get the most value from current, as well as new customers.

Understanding the value of data

Data is a term given to facts or figures that, once analysed in depth, can enable individuals, businesses or organisations to extract and generate useful information. For fintechs, the most important data extracted originates from customer information, such as transaction activity, personal payment preferences and geographic location, all of which can be monitored using Customer Relationship Management (CRM) or Customer Data Platform (CDP) systems.

Fintech and financial services products have unique customer management needs, given the interaction between regulation and compliance, money flows, and customer transactions. By looking at the context behind the figures and truly understanding what this information means, fintechs have a real opportunity to excel. Through harnessing data, they are able to properly understand the needs and requirements of their customers and create patterns and products that map their demands.

Data is a term given to facts or figures that, once analysed in depth, can enable individuals, businesses or organisations to extract and generate useful information.

For example, data can be used to anticipate customer behaviour. By monitoring how customers have acted before in their payment habits and preferences, an understanding of future trends can be established. This in turn can be utilised to improve future customer transaction journeys, and to create new products and services targeted specifically to meet their criteria and preempt what they may begin to demand next.

So why hasn’t data been fully harnessed? 

Data can have an enormous effect on the success of a fintech company, but there are barriers in the way of unlocking its full potential.

Increased regulatory activity around customer data and privacy means there is heightened customer awareness over how personal data is used and managed. Constructing a “stack” of various third party solutions in order to provide customer management, analytics, retargeting, marketing and other capabilities is no longer acceptable. Through harnessing data, financial service companies can control all customer details, meaning no data is sent to third parties and is self-hosted in a virtual private cloud.

We are then faced with an ever-growing market that’s becoming overcrowded. Many fintechs are therefore simply focused on one thing - getting to market quickly. They want to keep up with their competitors and prove why they are a top contender in the ecosystem. But as some fintechs rush through the building phase of creating a successful fintech, many are ignoring additional data that can maximise profits. By harnessing additional data, fintechs can amplify their product or offering and improve the way their customers, or potential customers, view their business to improve the product development lifecycle.

Many fintechs are therefore simply focused on one thing - getting to market quickly.

By failing to do this, fintechs are losing sight of their purpose. Fintechs often spend an enormous amount of time and effort getting to market quickly - which can take up to a year, or sometimes longer, meaning that once they’re live, they’re slow to change focus and use collected data to build upon engagement, to maximise profits through customer acquisition and retention.

Establishing customer loyalty will build a brand. Take Revolut as an example. Despite the coronavirus downturn, Revolut has continued to grow its customer base, albeit at a slower rate. For startups looking to take on the fintech giants, through utilising additional data, they will have a real opportunity to add further value and build on both customer acquisition and retention.

Now is the time for fintechs to use data better

It goes without saying that now is the time for fintechs to utilise data more efficiently. Though the demand for new services increases, the crisis has shown that the market is tough and those who don’t use all the assets at their disposal to maintain customer loyalty are going to struggle. Data at this point is also paramount because we expect consumers' behaviours and habits to change - there will be a new set of underserved needs.

Incumbent financial services companies, for example, are stuck on legacy technology stacks, limiting their ability to compete with the new crop of challengers and match the speed of today’s market. Fintechs can serve customers at a much faster pace, using services like open banking to speed up transactions in a safe and secure way.

For instance, in the UK, fraud attempts in general were up 66% in the first half of the year compared with the previous six months. By harnessing data, fintechs are able to better understand spending habits, and spot fraudulent activity which will subsequently help speed up an economic bounce back.


Fintechs also add a sense of personalisation that can be greatly improved using data. In the current climate where businesses require flexibility, data can do just that. Fintechs are able to identify spending habits, as well as help users save money - in fact a fifth of Brits admit they are considering moving their savings from incumbents to challenger banks. Unlike big banks, fintechs focus on bespoke services that meet every demand of the customer, and this is where data comes into play.

But to fully utilise this data, fintechs need to partner with like-minded players that can provide data capture and management strategies. These players are creating one-stop-shops, which are important as data remains within the site of the fintech. They take care of back-end processes that harness the endless data touch points - specific for financial services, which fly below the radar of other generic CRM tools. This in turn means fintechs can focus on profit maximisation. And, as demand increases, fintechs more than ever need to sharpen their edge to ensure they are completely attuned to their customers' needs, and data is the key.

According to Alan Donnelly, Head of Financial Services at Salesforce, this year financial services will continue to move towards a different way of doing business; one that harnesses digital services for the good of the customer, and that will increasingly lead to partnerships between new challengers and traditional banks.

Below, Alan explains for Finance Monthly that as banking customers increasingly expect highly convenient and personalised experiences, they are in return willing to commit to wider and longer relationships.

In 2020 we can expect to see the emergence of new ecosystems that will blur the old and the new, as well as examples of financial services organisations of all shapes and sizes working together.

Challenger vs traditional bank

The current financial services market has seen challenger banks pitted against traditional banks. The wider FinTech world cannot be ignored either. Challengers are growing due to the agility, flexibility, ease-of-use and convenience of their platforms. They are digitally native, and designed from the bottom-up for a customer base which is becoming increasingly reliant on mobile.

But these young organisations do not necessarily have the wealth of data that traditional banks do. Incumbents possess information from individual accounts, gathered over many years, and have insights into how entire households spend and save – including substantial financial decisions such as taking out a mortgage.

These young organisations do not necessarily have the wealth of data that traditional banks do. Incumbents possess information from individual accounts, gathered over many years, and have insights into how entire households spend and save – including substantial financial decisions such as taking out a mortgage.

Traditional banks are becoming more agile and incorporating mobile more. Some, such as Barclays, Santander, RBS and HSBC, are evolving towards banking apps in a bid to compete with the challengers.

Customer journey mapping

This backlog of data that the traditional banks have on both the individual and the household allows them to create a comprehensive picture of the customer. This customer journey map is a visual representation of every interaction a customer has with their finance services provider throughout their lifetime. It tells the story of the customer’s experience as they progress through all touch-points between customer and financial institution, from initial contact and purchasing, to the ultimate goal of long-term brand loyalty. Here banks can demonstrate how they are learning from customer relationships and engagement throughout their entire organisation thus bringing it to bear in a meaningful context for their customers.

Many banks now realise the need to harness customer lifecycles through data and agility. By identifying those “magical moments” that make up their customers’ life, such as setting up a pension, buying a home or planning for a family, they can offer seamless and personalised services for all stages of the customer journey.


Once these moments have been identified, banks can move from product to lifestyle services and so take the customer on long term financial journeys. Banks need to create a holistic view of the customer to pinpoint when a person may want to take out a specific loan, and so develop a personalised package before the customer starts to shop around, resulting in better services for customers, more pervasive interactions, and ultimately greater loyalty. Banks cannot afford to let conversations with customers lead to a dead end and so innovations in agile technology will capture, maintain and progress this dialogue.

Creating a future of partnerships

If financial services want to truly cater to the needs of the customer, we need to end this discourse of challenger vs traditional, and instead design services that are centred around the customer.

Ecosystems offer a marketplace of financial services that consumers can dip in and out of according to their needs, whether that be a mortgage or a student loan, to access the best products out of a large portfolio. This gives traditional banks the ability to be more agile through the need to stay relevant by enabling them to bring the best of these digitally-native apps and services to their customers, while in turn challengers get access to the data required to understand customer needs and habits. It also creates compelling new business partnerships as, for example, big financial moments like buying a home involve many complexities beyond financing.

We are already starting to see movement towards ecosystems with concepts such as Facebook Pay, which is consolidating payments across all of its apps. The focus now needs to be on providing platforms that consumers will go to for every aspect of their financial lives. Competition in financial services will shift from offering individual banking products to shared marketplaces with great services.

The next year will be a crucial time for the financial services sector. As banks begin to evolve their ecosystems, launch marketplaces and create new partnerships, it is the consumer who will ultimately see the benefit of agility and personalisation of financial services. The future is all about partnerships between old and new.

This is why banks are lining up to convince business owners they are the right bank for them – however, according to Steve Morgan, Senior Director of Financial Services at Pega, there are several key factors to consider when choosing a bank for your business accounts.

In a recent Pega survey of 340 UK businesses who use credit and lending services, traditional banks continue to lead the way in terms of who organisations would choose if they were to switch providers. This is despite the rise of challenger banks like Tide, who have just recently announced that they have signed up 100,000 customers for its app-based business accounts.

However, there are businesses who are keen to switch, and the emergence of technology is making it easier. Two thirds of large organisations considered changing providers and nearly a quarter (22%) have changed their main bank in the last year. Over half of medium sized organisations are similarly placed for switching. The main reason why businesses find themselves changing providers is because of high charges, plus a requirement for better online banking facilities and improved service.

When asked about what technology innovations they would like to see from a bank, businesses said they would like to see greater use of AI for more personalised, tailored and timely offers. According to a report by Business Insider Intelligence, AI is being used by banks to improve customer identification and authentication, as well as providing personalised recommendations and insights, but there is clearly a way to go.


Another concern that British businesses voiced when it came to choosing a bank was the idea of transparency; the extent to which a corporation’s actions are visible to the customer. During the onboarding processes businesses said they would prioritise transparency, consistency and automation when choosing a new banking partner. They also want to see improved speed of service, confirmation texts/e-mails, and a greater understanding of customer needs to deliver the right products and services.

The traditional larger banks might feel comfortable when hearing that they are still leading the way in terms of customer preference, but that would be a mistake. The Pegasystems study suggests business customers like the idea of improved use of technology and AI in their banking service. This is going to be a critical competitive comparison point for the future of business banking. Switching looks to be increasing in business banking and both the technology and options for clients are improving.

Clients expect AI to be used to help identify needs better, so that more personalised products and services can be offered, and so banks can predict the client needs when they switch or take out a new product. This is the time to make a great impression.

The banking provider that a business chooses will depend on the organisational structure of the business itself. An organisation is likely to form a partnership with a bank if that bank can demonstrate their exceptional capabilities and understanding of the business’ strategic goals. Customers tend to be loyal if they believe that their needs are being met by their financial services provider. Therefore, it is important for banks to make sure that their customers are satisfied by their services. This ultimately comes down to the banking provider being well informed about the business, as well as providing outstanding service through their channels.

Partnerships are critical for incumbent banks and financial services companies to stay ahead in a crowded market. Collaboration allows them to upgrade their technological capabilities and their digital customer experience faster - and at a lower cost – so they don’t lose out to new players in the market.

Viktoria Ruubel, Chief Product Officer at IPF Digital, looks at the ways that partnerships can be a win-win-win situation: for the bank, the FinTech and ultimately, the customer.

Building synergies around product, technology, or talent access

One way that banks and other financial institutions are collaborating is through licensing technology or software from other businesses in the form of a white-label. This provides financial organisations with immediate access to the latest, state-of-the-art technology stack, gives access to new products and speeds up time to market. Meanwhile the FinTech start-ups, that are often providers of the technology, get access to consistent revenues streams, and the software providers have the opportunity to invest in adding new capabilities to their portfolio of services. There are many examples of this type of partnership including Mambu and N2, Starling Bank and Raisin.

At a time where there is a battle for top talent across multiple industries, the financial services industry is not exempt from the challenge of finding talented engineers, scientists, and other skilled employees to design, build and serve new digital platforms, products and offerings. It is therefore not surprising that many companies partner with specialised service providers to tap into the world’s best expertise. A good example of this is the partnership between Discover Financial Services and Zest finance, which are leaders in artificial intelligence (AI) software for underwriting. They announced a partnership tasked with the creation of one of the largest AI-based credit scoring solutions in the financial services industry. Partnerships of this kind drive faster innovation and the adoption of new technologies like AI.

At a time where there is a battle for top talent across multiple industries, the financial services industry is not exempt from the challenge of finding talented engineers, scientists, and other skilled employees to design, build and serve new digital platforms, products and offerings.

Until a few years ago, no one would have anticipated the extent to which big industry players have invested in and become reliant on partnerships. These partnerships also present great opportunities for smaller companies looking to increase their market share.

Building seamless customer experience

Another common form of collaboration we have seen is banks choosing to set up partnerships with the aim of improving the ‘digital experience’ of their existing customers. Partnerships create a massive opportunity for businesses: enabling them to streamline internal processes, add technological capabilities, and most importantly, improve the end customer experience.

Customers are increasingly turning to digital channels to manage all aspects of their life, and financial services is just one industry being revolutionised by digital. With customer expectations for a seamless service ever-increasing, providing fast, convenient digital services has become critical for banks if they want to keep customers satisfied and sustain their competitive advantage.

Until a few years ago, no one would have anticipated the extent to which big industry players have invested in and become reliant on partnerships.

For established banks, partnering with a FinTech or Backend as a Service (BaaS) organisation offer an accelerated path to providing the best customer experience, which can be difficult to develop in-house due to legacy systems. At IPF Digital, we have partnered with several innovative players (e.g., Kontamatik, ElectronicID) to utilise their technology capabilities in ‘know your customer’ (KYC) and online verification, to provide a seamless digital onboarding experience for our customers.

Aiming for the win-win

For partnerships to be truly successful they must be equitable and aligned with both of the companies’ strategy and values, and they should benefit both partners in order to support the longevity of the collaboration.

One of the real challenges facing any high-growth oriented company, be it a young challenger bank or a mature FinTech aiming to speed up its growth, is finding and sustaining efficient customer acquisition channels. Partnering organisations with an existing, large customer base is appealing as it provides access to hundreds of thousands of customers that can benefit immediately from the attractive FinTech offering. Meanwhile the partner provides additional value to the consumer and adds the possibility of new monetisation opportunities. An excellent example of this is the collaboration between Affirm and Walmart announced in February this year.

By combining their resources and brand power with the innovative solutions created by FinTechs, banks will find they are able to serve new customer segments.

By combining their resources and brand power with the innovative solutions created by FinTechs, banks will find they are able to serve new customer segments. An example of this type of collaboration is the partnership launched between Kabbage and ING in 2017, which allowed ING to expand its small business lending into France and Italy.

Finally, partnerships can help businesses at both ends of the size spectrum to achieve efficiency, enable faster time to market, and ultimately speed up revenue generation. For established financial institutions, there are significant benefits: from fostering internal innovation to ensuring customer satisfaction and retention. The benefits for FinTech start-ups are also substantial, enabling the FinTech business to gain access to funding without giving away equity, and secure an alternative cashflow.

This week Finance Monthly hears from Caroline Hermon, Head of Adoption of Artificial Intelligence and Machine Learning at SAS UK & Ireland, on the adoption of open source analytics in the finance sector and beyond.

Open source software used to be treated almost as a joke in the financial services sector. If you wanted to build a new system, you bought tried and tested, enterprise-grade software from a large, reputable vendor. You didn’t gamble with your customers’ trust by adopting tools written by small groups of independent programmers. Especially with no formal support contracts and no guarantees that they would continue to be maintained in the future.

Fast-forward to today, and the received wisdom seems to have turned on its head. Why invest in expensive proprietary software when you can use an open source equivalent for free? Why wait months for the official release of a new feature when you can edit the source code and add it yourself? And why lock yourself into a vendor relationship when you can create your own version of the tool and control your own destiny?

Enthusiasm for open source software is especially prevalent in business domains where innovation is the top priority. Data science is probably the most notable example. In recent years, open source languages such as R and Python have built an increasingly dominant position in the spheres of artificial intelligence and machine learning.

As a result, open source is now firmly on the agenda for decision makers at the world’s leading financial institutions. The thinking is that to drive digital transformation, their businesses need real-time insight. To gain that insight, they need AI. And to deliver AI, they need to be able to harness open source tools.

The open source trend encompasses more than just the IT department. It’s spreading to the front office too. Notably, Barclays recently revealed that it is pushing all its equities traders to learn Python. At SAS, we’ve seen numerous examples of similar initiatives across banking domains from risk management to customer intelligence. For example, we’re seeing many of our clients building their models in R rather than using traditional proprietary languages.

A fool’s paradise?

However, despite its current popularity, the open source software model is not a panacea. Banks should still have legitimate concerns about support, governance and traceability.

The code of an open source project may be available for anyone to review. But tracing the complex web of dependencies between packages can quickly become extremely complex. This poses significant risks for any financial institution that wants to build on open source software.

Essentially, if you build a credit risk model or a customer analytics application that depends on an open source package, your systems also depend on all the dependencies of that package. Each of those dependencies may be maintained by a different individual or group of developers. If they make changes to their package, and those changes introduce a bug, or break compatibility with a package further up the dependency tree, or include malicious code, there could be an impact on the functionality or integrity of your model or application.

As a result, when a bank opts for an open source approach, it either needs to put trust in a lot of people or spend a lot of time reviewing, testing and auditing changes in each package before it puts any new code into production. This can be a very significant trade-off compared to the safety of a well-tested enterprise solution from a trusted vendor. Especially because banking is a highly regulated industry, and the penalties for running insecure or noncompliant systems in production are significant.

What use is power without control?

When it comes to enterprise-scale deployment, open source analytics software also often poses governance problems of a different kind for banks.

Open source projects are typically tightly focused on solving a specific set of problems. Each project is a powerful tool designed for a specific purpose: manipulating and refining large data sets, visualising data, designing machine learning models, running distributed calculations on a cluster of servers, and so on.

This “do one thing well” philosophy aids rapid development and innovation. But it also puts the responsibility on the end user – in this case, the bank – to integrate different tools into a controlled, secure and transparent workflow.

As a result, unless banks are prepared to invest in building a robust end-to-end data science platform from the ground up, they can easily end up with a tangled string of cobbled-together tools, with manual processes filling the gaps.

This quickly becomes a nightmare when banks try to move models into production because it is almost impossible to provide the levels of traceability and auditability that regulators expect.

Language doesn’t matter

The good news is that there’s a way for banks to benefit from the key advantages of open source analytics software – its flexibility and rapid innovation – without exposing themselves to unnecessary governance-related risks.

The language a bank’s data scientists choose to write their code in shouldn’t matter. By making a clean logical separation between model design and production deployment, banks can exploit all the benefits of the latest AI tools and frameworks. At the same time, they can keep their business-critical systems under tight control.

SAS plus open source

One SAS client, a large financial services provider in the UK, recently took this exact approach. The client uses open source languages to develop machine learning models for more accurate pricing. Then it uses the SAS Platform to train and deploy models into full-scale production. As a result, model training times dropped from over an hour to just two and a half minutes. And the company now has a complete audit trail for model deployment and governance. Crucially, the ability to innovate by moving from traditional regression models to a more accurate machine learning-based approach is estimated to deliver up to £16 million in financial benefits over the next three years.

OneSpan (NASDAQ: OSPN), recently released The Future of Adaptive Authentication in the Financial Industry, a report prepared by the Information Security Media Group. Based on a broad survey of US financial institutions, the report reveals the sector’s challenges in authentication practices and strategies, and highlights the growing tension between improving security, reducing fraud and enhancing the digital customer experience.

The survey results reveal the biggest challenges stopping banks and financial institutions from being able to confidently authenticate customers and step up security include:

As a result of these challenges, more than 60% of respondents plan to invest in new multifactor authentication technologies in 2019, including those that rely on biometrics and AI/machine learning.

“The report’s findings echo what we are seeing with our customers,” said OneSpan CEO, Scott Clements. “Financial institutions are under pressure to improve their defenses against continuing and evolving threat vectors. Many are now choosing innovative technologies that dynamically respond to attacks as part of a layered security approach that stops fraud while improving the customer experience.”

The report features Aite Group’s Retail Banking and Payments Research Director, Julie Conroy, on the need for financial institutions to improve authentication methods using the latest authentication methods and technologies, including artificial intelligence, machine learning and behavioral biometrics. These emerging technologies, paired with digital identity technologies, provide a better customer experience and help financial institutions remain competitive.

Great strides have been made in protecting the banking infrastructure from network-based attacks and securing the web and mobile application layer – often the front door into banks through customer interactions. Here Mike Nathan, Senior Director – Solutions Consulting EMEA at ThreatMetrix, A LexisNexis Risk Solutions Company, delves into the ins and outs of cybercrime in the banking sector, offering some insight into the most targeted and vulnerable victims of cybercrime.

Interestingly, fraudsters are not always responding by upping their own technological prowess but turning to con artist style tactics to simply circumvent increasingly sophisticated cybersecurity measures. We have seen a dramatic rise in social engineering attacks, a more analogue approach to hit the banks where it hurts and as a result, customers have now become the new weakest point.

So, what can be done to anticipate or prevent this sort of attack?

Based on my observations, several years ago around 70 percent of attacks against banks involved account takeovers. Accounts can be hacked into using stolen identity credentials, or off the back of a phishing campaign where the customer is tricked into entering their login credentials on a fake site. Once the account has been compromised, the fraudster then accesses their digital banking account and commits the fraud.

Today, however, account takeovers only account for half of the problem due to the rise in social engineering attacks, also known as Authorised Pushed Payments (APP). APPs involve fraudsters contacting account holders directly and tricking them into making a payment. Given that the customer appears to give consent to the transaction, and it is originating from a device that is associated with that user, these attacks tend to be more difficult to detect.

A phone call from a concerned “member” of the fraud team at a bank may make a consumer panic, and instantly put all trust in that person. The consumer might then willingly send all his or her money to a separate account for “safe keeping”. In reality, that money has disappeared and so will the member of the fraud team who made the initial call. This is a simple method of APP attacks      used today.

These fraud techniques are especially effective with some of the most vulnerable people in our society, who tend to struggle with the evolution of banking and fintech. Advancements in certain remote access tools that allow the cyber criminals to access and control the customer’s computer are making the job even easier.

If fraudsters are evolving, so must the banking industry. The first step to tackle APP is through education. Ensuring all customers have extensive knowledge on the “dos and don’ts” when it comes to digital and phone banking is of paramount importance. Email alerts reminding customers that their bank would never ask for certain information over the phone, as well as adverts raising awareness on the risks of letting another person access their computer, are but a few options that can be used to ensure customers are protected and well-informed.

It is also imperative for the bank to place protections throughout the customer journey by monitoring user behaviour and spotting anomalies that indicate fraud. Banks must be actively looking for indictors of social engineering and account takeover attacks at crucial customer touchpoints including login, setting up a new beneficiary, and making a payment. By assessing activity in the context of historical activity for that individual, key red flags can emerge to identify suspicious behaviour. An example of this could be a payment from a desktop when the customer traditionally uses the mobile app, or a longer time between login and payment than normal or remote access tools being on the device for the first time.

Once the suspicious behaviour is identified, banks can choose between blocking the transaction or alerting the customer through other means to advise them that something is out of the ordinary. The art here is to strike the delicate balance between maximum protection against fraud – while avoiding blocking or questioning legitimate transactions, which can annoy customers and drain internal resources.

Avoid basing decisions on the typical banking customer but use advanced behavioural analytics to assess how that particular individual typically transacts. By using real-time intelligence on a user’s digital identity and their historical behaviour, banks can deliver security and customer satisfaction without compromise.

Banks implementing protocols like these can help ensure that customers are not placed in harm’s way and that cybercriminals are not entering into bank systems.

It is important to follow the latest fraud trends order to keep ahead of the curve. There will always be new technologies and techniques that increase the threat posed by criminals. However, in the same way technology may sometimes play against us, it also provides us with a number of tools which help us undermine attackers and keep businesses and customers safe.

According to recent research by IDEX Biometrics, more than half (53%) of cardholders would trust the use of their fingerprint to authenticate payments more than their PIN.

A further 56% of research respondents stated that they would feel more secure conducting purchases with their card, if they were authenticated with their fingerprint. It seems that payment card users are very aware of the limitations of their PIN with almost half (45%) admitting that they never change them. And a third (29%) expressing concerns that PINs cannot be relied on to keep their money secure.

This scepticism around current card security measures also extends to contactless payments with 63% questioning their security and 70% believing that they actually leave them exposed to theft and fraud when used.

It is evident, that as a nation, we are ready for the introduction of biometric fingerprint card authentication. The only area of concern users admitted to, was how their fingerprints would be stored. 45% were worried that criminals could mimic their fingerprint biometric data and a further 51% was concerned about the possibility of it being stored in a bank’s central database - leaving them exposed to identity theft or their personal information being used without their knowledge.

These findings highlight that banks need to provide reassurance that biometric fingerprint authentication can be used in a user-friendly manner. There is no need for this information to be retained centrally and that any fingerprint data is kept with the user on their own cards. Providing customers with the confidence that they can embrace fingerprint biometrics as a more secure and personal method of authentication for their payments.

“Consumers are ready for the use of biometric fingerprint methods of authentication for card payments and it is set to be a reality in 2019, but banks have a responsibility to address security concerns, particularly in relation to how and such data is held. It is ultimately up to the banks and the financial services sector to reassure consumers to drive adoption and ultimately tackle fraud head-on,” comments Dave Orme, SVP at IDEX Biometrics.

“With a resounding 53% of consumers stating they would trust the use of their fingerprint to authenticate payments more than the traditional PIN, this must be where the UK banking industry focuses its attention. Chip and PIN is now 12 years old, and has seen its course. The consumer demand for fingerprint methods of authentication is a reality, with two-thirds (66%) of UK consumers expecting their roll out to authenticate in-store card transactions by 2019,” added Orme.

(Source: IDEX Biometrics)

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