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At the same time, UK firms borrowed more than £100bn last year. While this was predominantly driven by government-guaranteed lending, demand for borrowing is likely to remain strong as SMEs recover and government schemes are withdrawn. Many will return to non-borrowing ways but there is also a case for businesses who may have had their first taste of borrowing and will seek finance to thrive rather than survive - particularly as the cost of borrowing remains relatively low.

Other forms of lending will come to the fore to supplement mainstream solutions such as overdrafts and term loans - asset-based lending is one such model set to play a significant role in offering support to businesses. To meet the rising levels of demand, lenders should be prepared to leverage their digital capabilities to streamline customer journeys, improve risk mitigation and enhance transparency between lender and borrower.

Operational excellence: customer experience and business value

The demand for lenders to create frictionless digital journeys for their customers was growing well before COVID-19, but there is no doubt that the need to streamline communication and digital interaction between lenders and borrowers has become increasingly important and is often the preferred channel for many businesses. With the advent of cloud computing and the drive to greater transparency, led by the Open Banking initiative, the business community is more minded to share data with trusted partners.

But leveraging digital capabilities to improve customer journeys goes beyond just enhancing the customer experience and while borrowers benefit from faster access to working capital, lenders themselves are better able to reduce risk and make informed judgements about the businesses they lend to. For lenders, the access to enhanced data provides superior insight into how they can support customers now and, in the future, and ultimately improve margins.

By utilising online solutions that allow clients to self-serve their funding needs, lenders can achieve excellent operational efficiencies and high levels of customisation, also delivering reliable and secure solutions that offer customers a better overall experience and financial support at the click of a button.

Greater visibility driven by open accounting

In an increasingly data-driven world, lenders are looking towards “open accounting” to provide greater visibility on the financial performance of the businesses to which they are lending. Lending decisions can be made much more quickly by an asset-based lender if they have the trading history of the borrower, with full transparency of sales, purchase ledgers and cash movements at their fingertips.

Open accounting can provide information vital for the lender to manage risk and optimise the funding available. Checks and assessments are completed in a fraction of the time, and with much less friction than with manual processes. Lenders who have access to their clients’ accounting data are in a far stronger position to streamline operations and deliver customer satisfaction.

A modern solution 

Taking advantage of such digital capabilities offers clear appeal to asset-based lenders, but they must ensure they deliver holistic solutions to meet their needs and customer demands, rather than delivering quick fixes which overlook the overall experience and entire digital infrastructure.

By utilising online solutions that allow clients to self-serve their funding needs, lenders can achieve excellent operational efficiencies and high levels of customisation, also delivering reliable and secure solutions that offer customers a better overall experience and financial support at the click of a button.

Overall, digitalisation has been both a natural solution to reducing friction and increasing efficiency for lenders and clients alike and a key tool in dealing with the intense demands placed on lenders during a challenging economic cycle.

In an increasingly competitive environment lenders need to continue providing advanced digitalisation offerings, such as ever-evolving streamlined journeys which build trust, speak to customer needs, and accelerate outcomes, and look to leverage open accounting to enhance insight into business performance and inform lending decisions. This evolving digital landscape is a benefit to lenders and borrowers alike as they tackle the challenges of a post-pandemic future.

This ongoing disruption, coupled with changing consumer behaviour characterised by the growing preference toward mobile and online services, is driving regulatory changes that are shaping the future of finance.

While this is happening to varying degrees in regions and countries around the world, there are local nuances to consider. This is particularly true in the United Kingdom, where speculation is rife around what the future will hold for the UK following its departure from the EU and the impact this will have on financial services.

As one of the world’s leading financial centres, the UK is well-positioned to keep pace with changes in the industry. But in terms of regulations, there are still several questions around how the UK will adapt, what legislation it will adopt or modify, and what impact this may have on the wider EU region.

Post-Brexit PSD2

The Payment Service Directive 2 (PSD2) has been a linchpin of European financial regulations since its introduction in 2018, increasing security for online transactions and encouraging more competition through open banking.

The transition period ended on 1st January 2021 and enforcement of PSD2’s Strong Customer Authentication requirements for merchants will take effect at different times. The EU’s deadline is on 1st January 2021 while the UK’s is on 14th September 2021, which will no doubt cause a great deal of confusion for consumers.

It’s well known that digital currencies have – in their relatively short history – been used for illegal activities, so building trust in the technology through compliance will be a key focus for regulatory bodies in the future.

In the case of a no-deal Brexit, a draft version of the UK Financial Conduct Authority’s (FCA) Regulatory Technical Standards on Strong Customer Authentication and Common and Secure Open Standards of Communication indicates that the UK regulators would continue to accept the EU’s eIDAS certificates (or electronic Identification, Authentication and Trust Services) for authenticating third-party providers to banks. However, the document also recognises that UK entities may require alternative methods, suggesting that both routes are still on the table.

Discussions are still ongoing, but time is running out. As security is a key component of the directive, mandating the use of transaction risk analytics and replication protection in mobile apps, any new UK-specific variant will have to ensure that consumers remain protected and banks can still offer fully seamless digital experiences.

Driving digital identities

Some of the biggest regulatory developments throughout 2020 have come in the area of identity verification, with COVID-19 accelerating digitisation initiatives and investment. As an increasing number of customers are either reluctant or unable to visit a bank branch, fully digital and seamless identity verification has become a key requirement for remote account opening and onboarding.

This is an area where regulations – such as Know Your Customer (KYC) – play a key role, and where authorities have had to move quickly. For example, in response to the pandemic, the UK FCA issued guidance on digital identity verification permitting retail financial firms to accept scanned documentation sent via email and ‘selfies’ to verify identities.

This was supplemented by a 12-month document checking service pilot launched by the UK Government in the summer. Participating private sector firms can digitally check an individual’s passport data against the government database to verify their identity and help prevent crime.

And this is just the beginning. There are plans for private-sector identity proofing requirements and work being done to update existing identity-checking laws to become more comprehensive. Perhaps most significantly, the UK government plans to develop six guiding principles to frame digital identity delivery and policy: privacy, transparency, inclusivity, interoperability, proportionality, and good governance.

This all points towards a financial future that will be driven by digital identities. With customer behaviour likely changed forever, digital identity verification will be essential to improving the remote onboarding experience, while also minimising the threat of fraud and account takeover attacks.

The evolution of AML

Anti-money laundering (AML) legislation is also set to progress in the future, driven largely by an increasing focus on cryptocurrencies. Digital currencies are currently garnering plenty of attention from European regulators, as illustrated by the introduction of the 5th Anti-Money Laundering Directive (AMLD5).

EU member states were required to transpose AMLD5 into national law by the beginning of the year, with the goal of preventing the use of the financial system for money laundering or terrorist financing. One of the directive’s key provisions focuses on restricting the anonymous use of digital currencies and, as such, it now applies to both virtual cryptocurrency exchanges (VCEPs) and custodian wallet providers (CWPs).

VCEPs and CWPs that were previously unregulated must now follow the same rules as any other financial institution, which includes mandatory identity checks for new customers.

With the role of cryptocurrencies in our financial system expected to increase significantly over the coming years, we can expect European regulations to continue in this vein – particularly in a leading FinTech nation like the UK. It’s well known that digital currencies have – in their relatively short history – been used for illegal activities, so building trust in the technology through compliance will be a key focus for regulatory bodies in the future.

2020 has certainly been a year of upheaval for financial services regulations and we can expect this trend to continue into the new year. With digitisation in the industry evolving at a rapid rate, governments and lawmakers will have to work hard to keep pace. As the EU and the UK have shown, the future of finance will have plenty to offer.

Finance Monthly hears from Stan Cole, Head of Financial Institutions at Inpay, on the progress that has been made towards creating seamless cross-border payment solutions.

Modern technology continues to advance at astonishing speeds, and recent years have given us plenty of remarkable developments in the fintech sector in particular. Yet, despite phenomenal progress in other areas, the trillion-dollar cross-border payment industry was stuck in the dark ages for an inexplicably long time. Banks and other financial institutions had to make do with outdated models, which slowed down international transactions, rendering them expensive and unreliable. And to make these frictions even more frustrating, many cross-border payment systems offered very limited transparency.

Improvements were long overdue, and thanks to rapid modernisation within the industry, customers are now enjoying a far better experience. However, we’re only at the beginning of the cross-border payment revolution. In fact, changes are expected to come even faster in the wake of the coronavirus. For example, Stephen Grainger, executive vice president of Mastercard’s New Payment Platforms, believes that global eCommerce will transcend the need for face-to-face transactions, while more remote and migrant workers move overseas, and more people enter the gig economy. “As the change becomes reality, it's the financial institutions that will be expected to step up and provide efficient cross-border payment systems that their clients demand — especially in regions where the need for trusted, reliable cross-border payments is increasing rapidly,” he explained to Business Insider.

With goods and services moving more quickly and across greater distances than ever before, customers are increasingly demanding cross-border payments that are as seamless and convenient as domestic ones. Huge progress has already been made and the future is just as exciting, and we’ll explore how all of that has transpired below.

How have cross-border payments modernised so far?

Cross-border payments have traditionally been the domain of correspondent banks. While these institutions are still major players in the industry, the rapid advances in technology and consumer demands mean that times have changed. With the click of a button, people are able to send emails, photos and videos globally, and these are received in real-time. Why shouldn’t consumers expect the same convenience when wiring money abroad?

With goods and services moving more quickly and across greater distances than ever before, customers are increasingly demanding cross-border payments that are as seamless and convenient as domestic ones.

There have been a host of new arrivals in the cross-border payments sector, so people are no longer forced to undertake a costly, slow, non-transparent international bank transfer. In lots of countries around the world, innovative services have made it possible to make an instant payment to a mobile number, email address or another unique ID form. This ID is mapped to the correspondent bank details, so in many nations, sending money is already as easy as sending an email. This marks a huge evolution from the traditional way of transferring money internationally.

In the face of stiff industry competition, banks need to embrace today’s consumer demands more than ever, and speed up their product propositions, reduce costs, and offer new, modern digital solutions if they are to retain their customers.

What does the future look like for cross-border payments?

Stablecoins

The future of payments is digital and tokenised, which explains why stablecoins have been gaining such popularity. These are cryptocurrencies that attempt to peg their value to an external reference, like a hard currency or commodity, in order to resist the high volatility usually experienced by the likes of bitcoin.

We have already seen this digitisation in action in South Korea, which has started to move from card to stablecoin payments. Likewise, Chinese central banks have partnered with e-money providers to test and provide central bank digital currencies (CBDC), vowing to launch a system like this before the 2022 Winter Olympics in Beijing. “As cross-border payments involve numerous players, time zones, jurisdictions, and regulations, they are often slow, opaque, and expensive, making us believe that an interoperable CBDC could play a role in improving cross-border payments,” explained Senior Editor Mirela Ciobanu in a feature for The Paypers.

However, it remains to be seen how large financial players in the current marketplace will respond to this shift. They could try to remain in the centre of such infrastructure and charge fees to their users for making transactions, or merely provide platform access to allow users to make peer-to-peer [stablecoin] transactions. We already know that Visa plans to help partners launch cryptocurrency services through its partnerships with wallets and exchanges, while Mastercard is also introducing cryptocurrency to its network, “allowing [customers] to transact in an entirely new form of payment”.

The future of payments is digital and tokenised, which explains why stablecoins have been gaining such popularity.

Blockchain & cryptocurrency

Incorporating blockchain into the cross-border payments space will help resolve key drawbacks of using correspondent bank transfers for overseas transactions. Banks that proactively adopt blockchain solutions will be able to attract and retain customers by offering cheap, real-time international money transfers that are more reliable and secure.

As Payments Journal notes in its feature on blockchain in cross-border payments, many issues with international transfers “stem from the high number of intermediaries in the form of correspondent banks that are involved in processing a transaction. Each additional intermediary drives up the processing fee, increases the number of failure points, and adds to the risk of fraud somewhere along the payment pathway”. Blockchain means these intermediary stages are not required, and the risk of fraud is significantly reduced, as all transaction information is stored on the network and is very difficult to modify.

A big obstacle to blockchain adoption has been its regulatory uncertainty. However, the situation is changing now that governments across the world are increasingly looking into blockchain, and developing CBDCs to distribute and receive payments outside of traditional banking systems.

Collaboration between banks and fintech PSPs

As an ex-banker and an ex-oil/gas professional, I like the analogy of banks being oil tankers — they’re big and strong, but take a long time to change direction when out at sea. The key issue here is that banks tend to rely on systems for international payment products which were developed last century, requiring customers to provide standardised legacy data. And as banking systems vary between different countries, one size certainly doesn’t fit all.

Fintech PSPs, on the other hand, are speedboats — fast and agile, jumping over the waves. Collaborating with these organisations means that banks can take advantage of the right data and access new instant payment infrastructures that are being created around the world.

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Having worked on both sides, my view is that banks and fintech PSPs both need each other. Banks have already acquired a long-standing, loyal customer base, and although fintech PSPs don’t yet have that in their favour, their freedom from client acquisition and legacy infrastructure costs lets them concentrate exclusively on product and service delivery. Therefore, teaming up with them enables banks to enhance their product offering, improve time-to-market, reduce costs, and retain their customers. Collaboration beats competition, and results in a win-win outcome for both sides.

Those companies that had invested sufficiently in digital technologies were much better equipped to deal with remote working and closed offices. But the crisis also exposed any lamentable lack of investment by companies in such technology. This was true for companies across several industry sectors. But to highlight some of the common key issues, Drooms surveyed* professionals in Europe’s real estate industry, which is certainly a good case study for a sector known for its historical reluctance to ditch paper-based processes.

Limited impact

We wanted to examine how the pandemic had impacted the adoption of digitisation in the European real estate market. Our results showed that while the pandemic did have some impact here, the extent of it was more limited than we expected.

Just over two in five (41%) of our respondents said that the European property market had only been moderately influenced by digitisation over the six months to September this year. Although a minority, this was still the most common response. Around one in four (24%) believed that digitisation had had a major impact on the sector, with 28% saying it was ‘slight’ and 4% said ‘not at all.”

However, more than two in five (43%) of our respondents also said digitisation would increase the efficiency of businesses processes, and a further 30% expect that it could dramatically reduce costs while 27% said it could create significant competitive advantages.

Digital laggards?

Although traditionally seen as a technological laggard, the real estate industry does appear to have adopted digitisation to some extent. The highest proportion of respondents (37%) said they had digitised between 50% and 74% of their processes but only 1% said they had achieved complete digitisation of all processes. But no respondents said they had no digitisation in place or had no plans to introduce it in future. 

Key weaknesses

Our respondents were clear about what they saw as the key weaknesses in the technology currently applied in European real estate.

While poor network resilience and security have historically been key drivers of real estate companies’ reluctance to entrust customer-facing processes to new technology, these appear to have diminished in importance. The most common weakness highlighted by our respondents was the lack of integration between different systems and platforms used in the sector, which was cited by 44% of respondents. Almost one third (29%) also said that another key challenge is the lack of applications that are available to replace the paper-based processes that still pervade. But 11% still believed that poor network resilience is the biggest problem, while 10% point to inadequate security.

Key themes going forward

More than a third (36%) of our respondents believed that remote working will be the most important theme for the real estate market in future. The next most common theme cited by our respondents (28%) was the expected arrival of more integrated technology that will improve efficiencies across the whole real estate value chain.

These responses were entirely unsurprising. For some time, we have seen firms calling for greater connectivity in their business processes. But this greater connectivity requires the practical use of interfaces between software solutions.

At Drooms, we are facilitating this by opening up our application programming interface (API) so that our virtual data room (VDR) platform can connect to other systems, enabling asset managers to save both time and workload effort, and reduce costs.

Virtual Data Rooms

VDRs bring tremendous efficiency and an array of functionalities to M&As, IPOs and non-performing loan and real estate transactions as well as management of assets throughout their lifecycle. Launched around 20 years ago, they served as online versions of the physical spaces where confidential or sensitive information was held for review by authorised parties. They now provide a secure, online platform for accessing confidential documents and handling business processes with a range of added functionalities.

Huge shift

Although not as significant as might have been expected, the coronavirus pandemic has had an impact on the digitisation of the commercial property market. The industry has largely performed well despite the challenges, which is no doubt due to robust online systems having been put in place.

What our research does underline however is that companies do need to continue implementing digital solutions to achieve greater efficiencies, lower costs and higher productivity. To achieve this, firms should rigorously review their business processes to assess what can and should be meaningfully digitised to enhance business performance.

For the challenges will only continue as technology evolves. The pandemic has created a huge shift in how organisations manage their operations and this has exposed a substantial need to re-think data transfer needs.

Security and the speed of transfer have become key priorities to ensure the smooth running of remote working teams and IT departments must lay the groundwork to ensure large documents can be made available at any location via a structured storage platform to help teams continue working digitally and seamlessly.

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*The study was a quantitative survey using an online questionnaire consisting of seven questions. Customers and interested parties in Europe were invited to take part in September 2020 via email. A total of 538 real estate experts responded. The full survey can be accessed here: https://bit.ly/383EHYV.

Once you realise that you need CRM software or better accounting software, you then have to decipher how to choose the right software for your needs. Fortunately, that process is a lot more straightforward than you might think.

Establish What’s Not Working

Many business owners and managers start looking at their software options when something in their line of work isn’t working. You may feel like your remote team isn’t working hard enough, or your finances are all over the place. Write down the problems you’re having so you can prioritise the systems that could streamline your daily operations. Sometimes, it can help to do this at the time of the issue so that you don’t forget. For example, time tracking software could get your remote team back on track, and bookkeeping software could shine a light on your financial problems.

Research and Compare

In an ideal world, the first piece of software you come across would be perfect for your business. That’s rarely the case, which is why using specialist companies can help you research and compare. You can gather information on each software type within a single category and compare the features of each. When all the data is laid out for you, it can be a lot easier to make an informed choice. The alternative would be to spend a fortune on software and only realising later that it’s not quite what you had in mind.

Rate the Features

When comparing one software type to the next, there’s a lot to consider. Think about the features you must have, those you may be able to do without, and some that would be nice to have but aren’t essential. It can also be worth finding out if a particular software type is customisable to suit your unique operations. Some software providers are more than happy to create plug-ins and extra features if it means it’s more compatible with your daily needs.

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Read Reviews

When your stress levels are high enough, wasting money on software that’s not fit for purpose could send you over the edge. This is why reading reviews can assist in choosing the right programs for your needs.

You’ve already looked at the pros and cons, but genuine customer feedback can be a deciding factor. Look for information relating to customisation, flexibility, price, customer support, and features. Around 91% of people read online reviews before purchasing a product, so there is certainly peace of mind to be gained by finding out what real purchasers think.

If you want your business to run like a well-oiled machine, new software can be the answer. However, the type of software you need remains to be seen. By researching and comparing options before rating the features and reading reviews, you may stand a better chance of finding that winning program that makes daily operations much more manageable.

Simon Shaw, Head of Financial Services and Insurance at Software AG, outlines three ways in which larger banks can – and must – make their business models more agile.

In the months since COVID-19 reared its ugly head and changed the way we live, there has been a noticeable uptick in conversations around digital transformation and embedding resilience. In the banking sector, the focus had been on the increased demand for online banking and questions around how banking monoliths will adapt.

The reality is that big banks can adapt – albeit slower than other industries. That’s not to say that change isn’t happening; banks have been transforming for years to align with changing customer needs. However, it’s a distinctly difficult and complex challenge. In fact, one of the primary challenges with digitalisation in banking is that moving quickly doesn’t happen easily. Of course, CFOs and financial leaders would love to quickly pivot their operations to meet changing needs and new requirements, but in their current state, most incumbent banks don’t yet have that capacity.

To achieve digitalisation, banks are grappling with many moving parts. From regulatory requirements, to safeguarding customer data, to overcoming silos – and that’s before we consider the sheer cost of it all. I have identified three ways for established banks to pivot more quickly and efficiently in today’s climate.

1. Go Hybrid or Go Home

A significant challenge in the digitalisation of big banks is that their ecosystems simply weren’t designed to enable quick transformation. Changes that may seem simple, or are simple in other sectors, can require full programme rewrites when applied in banking. The legacy systems on which most large banks are built are clunky and inflexible. Since these systems don’t run in real-time, they’ll never compete with the efficiency and analytic capabilities of challenger banks. Yet, despite that, these established systems actually hold the key to future success in banking – data.

The wealth of data contained within a heritage system has the potential to entirely transform the customer experience. However, to do so, banks must be able to access and integrate that data at speed.

A significant challenge in the digitalisation of big banks is that their ecosystems simply weren’t designed to enable quick transformation.

Hybrid cloud presents the best of both worlds; it combines the operational stability of on-premise solutions with the scalability, reduced cost and data accessibility of the cloud. Breaking up isn’t easy but, according to IBM, banks that are outperforming their competitors are 88% more likely to have incorporated hybrid cloud into their business model. For banks with decades of data in monolithic technology stacks, turning certain data and tasks over to the cloud can significantly lighten the load on their ecosystem to improve efficiencies.

2. Visualising Opportunities for Change

Digital transformation has changed banking expectations. Customers want speed and convenience and banks are competing to deliver. Excellence requires efficiency, but that can be difficult to achieve.

Process mining identifies optimisation opportunities and strives for excellence in process performance. As the name suggests, process mining delves into the detail of what occurs as a process is actioned, revealing patterns, anomalies and the root causes for inefficiencies. With greater insight into processes, banks are able to make informed decisions and tangible improvements to quality and performance. To compete with the challengers, established banks need to embed the ability to adapt to changing business requirements and make transformation routine. The first step to this is visualisation.

If hybrid cloud is the vehicle by which digitalisation is achieved, process mining is the check engine light.

3. The Building Blocks of Better Banking 

One of the biggest challenges to transformation lies in evolving away from heritage applications. Transitioning from old to new is daunting and can come with a hefty price tag. Microservices enable banks to transform piece by piece and scale at a controlled rate.

Transformation in data-reliant and regulation-heavy sectors will never be a walk in a park, however, microservices start small by design. This returns much needed control to banks and ensures complex changes are developed and tested independently before being integrated into the banking ecosystem.

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To fundamentally change business operations, the very foundations of that organisation need to be redesigned. This applies across industry, which is why, between 2018 and 2023, the microservices market is predicted to nearly triple as more organisations shift their transformation up a gear.

Microservices embed agility and efficiency from the outset, making digitalisation a cultural and technological change. By returning control and enabling a customer-centric and scalable design, transformation can add big value to big banks.

Agility is essential, but moving a monolith isn’t easy

In banking, where archaic systems and rigidity have been governing organisational change for years, digital transformation really means reinvention and growth. While the end-goal is easily defined – agility, resilience, scalability, digitalisation, etc. – it’s difficult to know what’s needed to achieve it. When the dependencies, regulatory requirements and price of change are thrown into the mix, it’s no wonder that change takes time in the financial sector.

Hybrid cloud, process mining and microservices create the foundations for development by embedding transformation capabilities into the very core of a banks system. While financial institutes will always be subject to a high level of scrutiny, strategic solutions that bring order, visibility and an ability to compete with smaller and more agile banks are truly transformative.

Lee McDarby, Managing Director, Corporate Foreign Exchange and International Payments at moneycorp, offers Finance Monthly his advice for SMEs and corporates looking to keep their financial requirements stable as they expand.

With Brexit on the horizon, and COVID-19 likely to be around for a little while yet, it’s more important than ever that businesses across the UK have access to experts, and know that they can access their money at any time, wherever they are in the world. In the past decade, the payments sector has moved at an increasingly fast pace. With this continuing to develop, there’s a need to further drive innovation that supports financial inclusion for all corporates, SMEs and individuals, to enable international success.

If you’re currently looking at expanding your business to different markets, or adapting your supply chains, and thus payment routes, it’s important that your banking partner can take the stress out of your financial requirements, enabling you to focus on elevating your business. So, what should you be on the lookout for when it comes to your banking and FX needs?

Multi-currency International Bank Account Number (IBAN)

The multi-currency IBAN supports British businesses looking at international expansion. We know that some traditional banks require you to open multiple bank accounts for different currencies – bringing an increasing amount of hassle to the simple act of receiving a payment. It can also take months to open multiple euro and/or dollar accounts, so a modern multi-currency IBAN is the hassle-free and significantly simpler option.

With one multi-currency IBAN, businesses can receive international payments in varying currencies across the globe. Supporting UK corporates to enhance their supply chain and take their business to the next international step in their global expansion.

With one multi-currency IBAN, businesses can receive international payments in varying currencies across the globe.

Security of funds

When choosing a provider for your payments and foreign exchange needs, it’s important to ensure it has safeguards in place to protect your funds. There are a number of specifics you can look out for to ensure the security of your accounts. These include:

The human touch

Customer service is key when it comes to the relationship between a business and a bank. While it is imperative that customers have 24/7 access to their account regardless of where they are in the world, talking to a person at the other end of the phone is just as important.

While our society has moved to be digital-first, when there’s an issue, the first thing the customer wants is to speak to someone. As such, access to a support team, across a multitude of channels, is irreplaceable when you need it most. To support all of your customers across the entire spectrum, it’s imperative that customer services are multi-faceted.

Ease and speed

Varying customer needs are echoed in the diverse range of Application Programming Interface (API) solutions. For an SME, corporate, or individual trading in various currencies across the globe, a seamless API that integrates ease of user experience, along with speed of delivery is crucial. However, one API doesn’t fit all.

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At moneycorp Bank, we’ve been able to seamlessly align the agility of fintech with substantiative banking networks to create bespoke API solutions, dependent on the client requirements. In addition, the central API endpoints built as part of the programming allow clients to have access to the core banking facilities on a multi-currency wallet, peer-to-peer facilities for instant transfers, global and local beneficiary validation, view balances, 24/7 multi-bank dealing, international payment and transactional and statement capabilities as standard.

Having a banking system that offers API integration gives you access to an array of benefits that leave you with more time to invest into your business. It also gives customers the capability to monitor exchange rates and automate conversions at a desired value, putting FX hedging tools right in the palm of their hands.

Looking ahead

Fundamentally, whilst we are currently navigating extraordinary times, there are also opportunities afoot for UK businesses to look at expansion. At moneycorp Bank, we believe that by picking the right partner for their payment needs, businesses can assemble best-in-class services when it comes to technological advancements in the sector, security, and customer service – without needing to trade one for the other. This in turn, will allow companies to start a new journey on the international stage, putting their best financial foot forward.

Vince Graziani, CEO of IDEX Biometrics ASA, analyses the impact of this shift and what it means for those who rely on cash.

As lockdown eases and shops begin to reopen their doors, many retailers are encouraging customers to use contactless card payments or mobile apps to pay. This move has come as a result of the concerns around the virus staying on bank notes for around 48 hours, and therefore able to transfer via point-of-sale terminals and ATMs. In reaction to this, many of us have embraced touch-free payments to help improve hygiene in the payment process and reduce the risk of contamination.

Advancement in technology and the use of touch-free authentication allows consumers to make a transaction without having to touch a shared PoS to tap in a PIN number, sign for their purchase, or hand over cash. It is common when tapping a contactless card or using a mobile payment app and is an increasingly vital step in the process of making the payments industry safe in the world of coronavirus. However, there is a significant segment of society that still rely on cash who are unable to embrace touch-free payment authentication.

As we move more towards a more digital-focused society, government bodies are increasingly worried about the effects on vulnerable members of society. In particular, the elderly, those who remain un-banked, or those without a smartphone are still reliant on cash and could be left excluded in a digital-first payment ecosystem. In a post-COVID world, these same groups are those who could be most exposed to further viruses from cash circulation.

So, with touch-free payments important to improving hygiene, there is an important question to consider for those unable to access contactless payments: could digital exclusion be a barrier to a COVID-free society?

There is a significant segment of society that still rely on cash who are unable to embrace touch-free payment authentication.

Developing an inclusive digital payment system 

Those who are digitally-excluded have limited or no access to digital tech that can make life more convenient, such as a smartphone or payment apps. According to the ONS, 9% of UK adults, or almost 5 million people, don’t have access to the internet, while in the USA, FCC data suggests around 42 million Americans lack broadband internet. As a result online banking would be inaccessible to many. In the UK, the government-commissioned Access to Cash review found that 17% of the population – over 8 million adults – would struggle to cope in a cashless society.

Exclusion from the digital world can lead to lower skills and confidence, but it can also lead to social exclusion and wider economic problems. As payment technology continues to advance, the use of basic IT devices could become essential to access goods and services. While touch-free digital payments offer many benefits, not everyone is ready to embrace a fully digital society just yet. But in our new normal, we must also consider the need to remove the concerns around transmission of the virus on cash.

Therefore it is important to be more innovative in our approach to payments and ensure that governments and banks work together to develop new digital payment technology in a more inclusive way, to bridge the digital exclusion gap.

Failure to do so will see those without access to digital services and payment options locked out from everyday services that so many of us take for granted and forced to continue using cash. Meanwhile more digitally-included members of society are able to avoid touching paper notes and coins or ATMs amid the threat of the virus. With more and more banking services moving online the need for simple and secure access to these digital services is more important than ever before.

The importance of biometric technology to support digital inclusion 

In The Access to Cash review, the commission highlights biometrics in digital payments as an innovative technology that will make payments even easier in the future, which will support the pace of change towards a cashless society.

Biometrics are likely to be key to revolutionising digital inclusion in the coming years. As people get used to using fingerprints and faces to identify themselves, biometrics will become a more familiar and accepted touch-free way to validate transactions. Now, fingerprint biometric sensors can be incorporated into smart payment cards providing a speedier, personal and more secure means for consumers to authenticate payments.

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During a transaction, a consumer only needs to touch their finger to the sensor on their own payment card, and then hold it over the contactless card sensor. This will allow them to authenticate a payment of any amount, without a payment limit. By extending biometrics to payment cards, authentication will no longer rely on what you know, or what you can remember, but who you are. This is valuable for those who struggle with PINs as well as in countries with lower literacy levels or less reliable identification systems.

The use of fingerprint biometrics in smart cards are also an affordable way to ensure touch-free authentication in the payment process while effectively banishing the concerns people currently have about the implications of devices being lost or stolen. For those that don’t have access to a smartphone, they will still be able to bank and pay for goods securely and in a touch-free way without a large upfront cost.

Providing cost-effective touch-free payment methods for all

We must recognise that whilst tackling digital exclusion remains complicated, the latest advancements in biometric fingerprint technology are leading the way to a more inclusive payment method.

With the rise of digital and mobile payments, a cashless society is fast approaching, and it’s becoming increasingly important for government bodies to work alongside payment method providers and banks to ensure an inclusive future for everyone.  Providing access to cost-effective touch-free payment methods, such as biometric payment cards, can help to not only reduce the risk posed by a second wave of COVID, but also help to protect people from the spread of viruses in the future.

This industry has never been noted for leading technological progress. Its reliance on paper-based processes, even among the larger, better-resourced firms, is well known. Unfortunately, these technological shortcomings have been exposed in stark fashion as the COVID-19 pandemic forces most companies to rely on remote working and communications. This extreme stress test has made even some of the larger real estate companies realise their digital capabilities are woefully inadequate.

In particular, the crisis has revealed the poor quality of networks at many real estate companies and the low priority often given to data security and protection. This lack of security has even led in some cases to the ‘free’ software they use tapping into the data of users for advertising purposes. ‘Cookies’ and spyware can automatically collect individuals’ shopping and viewing habits via search engines to better direct adverts that provide revenue, raising concerns about organisations’ own levels of privacy and security, too.

Essential steps to digitalisation

If real estate companies are to take on board the lessons of this crisis and successfully modernise their digital systems, then they must:

Recognition of these challenges and appetite for change is certainly prevalent in the industry. New research commissioned by Drooms1 found that two thirds (67%) of real estate professionals say their organisations’ efficiency would increase if their systems were to have seamless integration with third-party platforms that give them access to a variety of functionalities. Nearly a third (32%) believe this improvement would be ‘dramatic’.

API offers a seamless integration solution

A leading-edge solution for achieving seamless integration is an Application Programming Interface (API), which enables the interconnection of software systems and data between businesses and third-party providers, representing a major step forward in streamlining workflows. Nearly two in three (65%) respondents in our survey nominated APIs as the IT feature they would most like to see incorporated into the tech they use, versus 29% who cited ‘security’ and 15% ‘blockchain’. More than half (59%) of real estate professionals would like to see APIs improved, ahead of other tech features, such as security (41%).

Drooms has opened up its API to its clients, meaning they can seamlessly integrate their VDRs with a range of software systems. These systems include real estate market analysis software that enable clients to consolidate fragmented data and make immediate comparisons of their portfolios against the wider market. This means data-driven decisions can be made quickly without having to log in and out of several systems, draw on various information siloes or work between applications.

With so many staff having to work from home across Europe, the fragility of companies’ IT networks has been exposed. It is now clear that for teleworking to work successfully then companies must implement adequate software tools. They must invest in high-functioning and secure technology that is going to optimise current workflows rather than demoralise their staff.

These tools must reduce pressure on servers, include appropriate data file sharing and storage systems, solve any issues with document formats and make data easily accessible to authorised people and teams, enabling access via a range of devices e.g. browser, app, mobile, etc. This latter function can be problematic given that the security in place inside company firewalls is completely different from that in homes, presenting a tough challenge for many companies.

COVID-19 crisis is likely to change attitudes

Many real estate companies have yet to fully address these issues. While some generic file sharing and storage systems can help companies, these can only provide make-shift solutions. For a complete and secure set-up, companies should look to specialised services, and ensure they take great care in vetting their providers.

The COVID-19 crisis is highly likely to change attitudes and focus company leaders’ minds on bringing about such changes - especially when they realise that a lockdown could be re-instated at short notice for some time, possibly even into next year.

(1) Source: Survey conducted between 28 January and 21 February 2020 by PollRight. The panel of 34 real estate investors covers both fund managers and investors across Europe.

What is the current state of digitalisation in the Middle East? 

We need to consider that digitalisation is an important driver of transformation in the financial services space globally. Additional dynamics such as low-to-zero interest rates, a challenging global economic environment (US-China trade war, coronavirus, etc.) and changing regulatory environments add to this challenge. Moreover, in the Middle East, markets are highly competitive due to the number of financial services players present. In combination, these dynamics put the traditional business models of banks and insurance companies into question.

Many established financial services players have started experimenting with digitalisation, often with the aim to improve customer experience through new forms of interaction such as chatbots, facilities to conduct business online (e.g. insurance renewal) and financial planning tools such as mortgage calculators. In addition, some financial institutions have started replacing their legacy core systems, ranging from full replacement of the core system to light-core system and middleware connected by a host of API-linked systems.

Digitalisation is a topic that continues to occupy substantial mind-share with financial services executives on transformation projects and as a strategic challenge to their market positioning.

What is happening beyond the existing financial services players?

Digitalisation also allows players from outside the financial services space to make inroads into banking and insurance, often leveraging highly developed customer insights. One example in this regard is telecom providers moving into financial services in a bid to broaden their traditional offerings. They leverage extensive information about customers for businesses such as micro-lending, crowdfunding, credit scoring and others. Other players in highly customer-centric industries are considering similar models – retailers are a good example.

The current low-interest-rate environment not only threatens traditional business models in financial services but also serves to push the emergence of FinTech companies as direct challengers to financial institutions.

The current low-interest-rate environment not only threatens traditional business models in financial services but also serves to push the emergence of FinTech companies as direct challengers to financial institutions. They are fueled by cheap money seeking return and the substantial efforts of governments to attract new industries in their bid for economic diversification and development. FinTechs are interesting not only because they seek to innovate, but also because they have a different risk profile: where established players need to get their digital strategy right in order to not jeopardise existing business and employment, FinTechs can take a stab at one specific problem time and again. In the worst case, they go out of business when they run out of capital. The founders then have the choice to pivot and take another stab at the problem with a new company – so long as they manage to continue raising funding. Fail fast approach to innovation is now becoming a norm and many corporates are in the early stages of figuring out how to embed this in their own organisations.

As the popularity of FinTech in the region increases, banks are no longer bound to innovate internally. Instead, they may carry out the process through partnerships with the startups. Currently, the choice between organic innovation and partnership stands as a crucial decision that could have a significant impact on the outcome of substantial effort and investment. Therefore, firms must be cautious about the advantages and disadvantages of each option before making a decision.

How has digitalisation affected the banking and finance industry in the Middle East? 

Digitalisation has a substantial impact on the financial services industry in the Middle East. Just think of three key developments: drive towards simplicity, development of best-of-breed partnerships and the innovation strides of regulators.

Moving from complexity towards simplicity is prevalent in many industries. In the automotive industry, the combination of internal combustion engines and fuel is being replaced by a combination of electric motors and battery packs. The key to optimising electric motors and batteries is in the software that manages the systems, hence, Tesla's ability to improve performance over-night through software updates. Similarly, the financial services industry is increasingly making use of flexible, lighter cores that are complemented by a variety of other systems – held together by software that connects and makes sense of the data. There are a number of providers of such light tech-stack solutions that enable new forms of partnerships that allow for digital onboarding, personal finance management and digital loyalty programs to be provided from various sources, held together by a flexible middleware.

We are also noticing the rise in multiple FinTech arms of big established players from non-Financial Services sector like telcos, retailers, logistics, etc. across the region.

So we are talking more about a patchwork of partnerships and integrations that are emerging as a solution?

Yes, developing best-in-breed partnerships has become a key advantage: the usage of SDKs and APIs allows real-time connectivity between systems from a variety of specialised providers. This enables a fast and flexible roll-out of services compared to cycles of pure in-house development. One important effect from this is an increase in the overall level of product quality if the technical aspects are properly resolved. Another important effect is to reduce the advantage of pure size for financial institutions and thus to further increase competitive pressure in the market. As a specific example, consider telco providers partnering with financial institutions to provide micro-lending via a smartphone app like Tamam.life in Saudi Arabia.  Originating from such simple beginnings like microlending and wallet solutions, telcos can build strong offerings to become serious digital banking contenders.

This is welcomed by many regulators in the Middle East, it seems?

Innovation strides by the regulators are an important driver of innovation overall. The Middle East has seen a massive increase in activities of the regulators to attract, encourage and adopt innovation. Open banking regulations are one example of the introduction of innovation through regulation. Regulatory sandboxes are another, very relevant example as they allow new players to test new business models and partnerships without the full burden of comprehensive regulations. In free zones, there have been deliberate strides in creating a robust innovation culture paired with light regulation so that startups have a home for experimentation. Some free zones then aim to bridge and communicate with the regulators to slowly migrate these innovations into the mainstream economy. None of these dynamics would be possible without support from the regulators.

Does it seem like there is more to come?

Online and mobile banking indeed changed the industry. However, they represent how customers access banking services instead of a change in the core workings of a bank. We think that this presents a real opportunity and threat at the same time. As FinTech and BigTech become more important threats to traditional players in the industry, banks must consider the way they innovate. In this respect, we believe that banks should pursue "real across the value-chain innovation" rather than "superficial front end services".

These three developments are just the start of how digitalisation is changing the financial services space in the Middle East. A look beyond towards the US, China and Europe provides some perspective of what is yet to come, including fully digitalised banks and insurers, algorithmic support in core processes such as claims management or credit scoring and much more. Take China for example - just to name one example, Ant Financial operates Alipay, the world's largest mobile and online payments platform as well as Yu'e Bao, the world's largest money-market fund. Ant Financial also operates credit payment company Huabei, as well as an online bank called MYbank. In 2015 Ant Financial launched Ant Fortune, a wealth management platform. Another example is Ping An, the insurance company that has developed from a brick-and-mortar insurer into a veritable tech platform over the past decade or so. These super apps and large-scale platforms are only in their infancy in the Middle East. They are mostly a matter of creating scale and cooperation between players, and will sooner or later also land in the Middle East.

A low-interest future poses major challenges for central banks around the world.

What are the key challenges that financial services in the Middle East face? 

The first key challenge for financial services players in the Middle East is customer-centricity. Banks and insurance companies have traditionally been cumbersome to deal with – and many still are if you just think about the average claims experience or mortgage application. Simple processes like KYC and document collection are often still manual and e-signatures are not considered legal means of transaction yet with applications such as eSignOnline waiting yet to be adopted. Products are developed mainly from the perspective of financial institutions' and the legal environments' needs when customers may require entirely different solutions for their needs. The second key challenge is scale, or rather the lack thereof. With the exception of Egypt, Saudi Arabia and to some degree the UAE, markets in the Middle East are mostly small in size (both in terms of GDP and population). This limits the ability of companies to grow and to, therefore, invest in new technologies. This is a particularly significant issue in the insurance space but by no means less important in banking. The third key challenge is the transformation of organisations and along with this, the skills, mindset and capabilities of employees. This includes, for example, the acceptance of new working styles, agile management methods and the embracing of innovation by an industry and workforce which has traditionally been very conservative.

If we look at customer centricity, what specifically needs to be done?

Being able to adjust interactions to the specific demands and needs of customers is key for customer-centricity – ideally down to the level of the individual customer. This is what financial institutions are not very good at, which opens opportunities for more customer-centric organisations such as telcos, retailers, native online players, and others to create viable value propositions. For example, not many financial institutions in the Middle East analyse their NPS or their customer complaints registries in a structured and continuous manner for improvement potential. Social media posts (Twitter, Facebook, LinkedIn) are mostly ignored as a means for gathering customer feedback – and these are low hanging fruits. Augmenting this through platform use and technologies can help in making substantial progress towards understanding their customers better and deeper.

This is where the scale problem comes into the mix. Domestic markets in the Middle East are often comparably small in terms of the addressable market. In addition, some are (over-)saturated with financial services players and therefore faced with strong competition. This combination of small scale and often fierce competition limits individual companies’ ability to justify the required substantial investments into new technologies and innovation. The obvious solution of consolidation has been on the cards for over a decade now – but it yet has to happen at scale. As an alternative option, some players are already considering pooling and partnering as viable options to enable themselves to utilise technology, e.g., across the value chain in insurance to enhance the customer experience.

Can you give a specific example?

Open Banking is an interesting example because regulation is forcing banks to share data with not just other banks but any unaffiliated businesses looking for that data.  This data portability has created several innovative business models like DAPI (a UAE born company), the first financial API in MENA that lets FinTech apps leverage open banking by initiating payments and accessing real-time banking data. But that is just the beginning, Open Banking will fundamentally change the landscape of banking and insurance.

Technology and digitalisation also allow regulators to become faster and more focused themselves.

Yet, this will raise an entirely new set of questions around ownership and usage of customer data, level playing fields, channels to the customer and many more. Will banking and insurance truly become open, or will the incumbents create artificial barriers to protect their data? Many a new business model is hidden in the answers to these questions.

In what ways have regulatory pressures and the low/zero-interest-rate environment in the Middle East affected the financial services sector? 

A low-interest future poses major challenges for central banks around the world. Their initial measures to reverse negative interest rates were heavily criticised and more recent interventions, such as a graduated interest rate (introduced for example by the ECB), indicate that monetary remedies are reaching their limit.

The low-interest environment changes the dynamics of the game at two levels – the first one is the traditional business and revenue model in the financial services space as it is based on interest (or a profit markup in Islamic Finance that is at least loosely oriented on interest). On the second level, low-interest rates lead to a diversion of substantial funds into more risky asset classes such as early-stage funding and venture capital, which in turn fuels a growing number of challengers in the banking, insurance and asset management sectors. As a result, low-interest rates endanger the profitability of the incumbents and prop-up their competitors of tomorrow.

Regulation, on the other hand, is here to stay, albeit likely in a different shape. Mis-selling of financial products, the protection of consumer interests and rights (especially in a world where the product cycle is faster), the stability of the overall financial system and other dimensions warrant continued scrutiny by the regulators. Regulators will continue to focus on stability (capital adequacy, illiquidity, etc.), security (AML, Sanctions, Cyber, etc) and financial inclusion.

Technology and digitalisation also allow regulators to become faster and more focused themselves. This may lead to the current approach of creating relatively comprehensive licenses with extensive compliance and reporting requirements being replaced with a more nimble "a la carte"-approach for regulation. The regulatory sandboxes are the first step in that direction. To fully enable and support digital transformation, regulators will have to think about creating larger markets than the ones in existence today. This may require solutions such as passporting of financial services, a realisation amongst players that their individual positions are untenable and therefore they have to find (institutionalised) partners incl. through M&A and consolidation. What we have seen work in Europe can also work in the Middle East if the framework conditions are right.

The sector needs to accept that the changes brought about by digitalisation are real, fundamental and that they’re here to last.

What do you think are the best solutions for financial institutions to address these challenges and navigate digitalisation effectively? 

First and foremost, the sector needs to accept that the changes brought about by digitalisation are real, fundamental and that they’re here to last. Once this realisation arrives in board rooms and executive management floors, the real work of transformation and change management starts. Addressing digitalisation is as much a question of creating the right mindset as it is of implementing new technologies.

To make a very simple and straight-forward example, certain Silicon Valley companies have KPIs on business model failures. They measure managers successes and failures. Too many successes and not enough failures mean that the managers are not pushing far enough. This is an interesting mentality at the very edge of management and meant to create an innovative culture by design. Could Middle Eastern financial institutions adopt a model of this nature?

However, the realisation of a changing world also allows rethinking business models in financial services, as the boundaries between financial services and other, adjacent industries, become less pronounced – think of the impact of self-driving cars on insurance. As banks and insurers are more closely integrated into the surrounding industries, customers can have a more seamless experience – think of microlending at the point of sale with just a swipe. This gives rise to platforms centred on customer needs, and financial services providers are natural candidates to organise such platforms due to the overarching nature of the services they offer, and the broad understanding they have of the economies and customers they serve (even if the latter is not apparent today).

The change of mindset in the board rooms and on executive floors of financial services players often starts with something as simple as an inspirational experience innovation in other places first-hand. This doesn’t have to be Silicon Valley as there is enough tangible, down-to-earth innovation and transformation going on elsewhere. Organisations then have to go through honest stock-taking of where they are - they have to understand what their assets are (tangible and intangible - incl., relationships, knowledge, etc. - idea of an asset repository) and where their liabilities are (financial and non-financial such as a legacy core system that doesn’t allow for change). On this basis, they can then determine the strategy going forward, which should integrate their existing business and any new businesses - it really is more of a bank strategy rather than a bank's digital strategy. The important element here is to make the strategy process tangible through an approach that aims to create minimum viable products that allow for quick testing with customers followed by the according adjustments in iterations, as well as the inclusion of partners in the process.

There are sweeping changes in banking which are changing the landscape and most of these innovations are coming from outside in. The ubiquity of the internet has produced warehouse/basement bankers who are disrupting without any legacy burdens. The regulators are sometimes sleeping through the change and in odd times struggling to catch up. For the sake of a brighter future, we hope everyone wakes up to this new reality.

 

Each year, technology introduces new trends and benefits into the healthcare industry. So, what can we expect to see throughout the coming year? Here, we’ll look at some of the key health care technology predictions for 2019.

  1. More focus will be given to digitalisation

This is perhaps the most unsurprising trend the healthcare sector is expected to focus on in 2019. More providers will be looking into adopting Electric Patient Records, helping to better monitor and manage patient treatment. Allowing practitioners to receive updates and records in real-time, this digitalisation is gradually revolutionising the industry.

It’s also likely more services will become digitalised, such as booking appointments, and managing repeat prescriptions.

  1. Security and privacy will dominate

Due to changes in data privacy, it’s likely the healthcare sector will see policy changes adopted in 2019. As the sector becomes more comfortable managing its data, it’s also expected there will be a move from big cloud data storage to smaller, more specialised cloud storage.

Security wise, cyber attacks are expected to become more prevalent over the next year, forcing healthcare providers to tighten their security.

  1. Patients will be able to monitor their own health

There has already been an increase in the number of at-home monitoring devices introduced onto the market. However, as pressure is placed onto the sector due to cost cuts, it’s likely we’ll see an increase in patient-controlled health monitoring.

Currently, patients can purchase testing kits for a range of illnesses and conditions, as well as test things such as their cholesterol and blood pressure. As technology continues to advance, we’ll likely start seeing more testing and monitoring devices introduced onto the market.

  1. Collaboration with innovators

Innovation is a big factor all businesses should be concerned about. In 2019, it’s thought the healthcare sector is going to focus a lot of its efforts into innovation. Pharmaceutical companies in particular, will be seeking out innovators to boost their portfolio. From digital health companies to biotech upstarts and AI start-ups – there will be a lot of collaboration taking place within the healthcare sector this year.

  1. More tech for mental health

It’s no secret that the mental health sector is under extreme pressure due to lack of funding and staff shortages. So, in order to try and bridge the gap, in 2019 focus is being placed upon introducing more tech into the sector. This will allow patients to monitor and manage their mental health much more effectively. There will also likely be more tech introduced to help treat and support mental health patients.

The above are just some of the health care technology predictions of 2019. There are certainly a lot of changes occurring within the sector at the moment. Digitalisation in particular, is going to be a huge focus and one of the biggest benefits to the industry.

Without a doubt, 2017 has been a rocky year for financial services; with political upheavals, economic uncertainty and planning for numerous regulatory changes coming into effect in 2018.

In 2017, Brexit was the talk of the town, with “uncertainty” a word bouncing around the finance sector. As such, the key focus was on the financial services industry crafting their post-Brexit strategy, namely how to continue having access to both EU and UK markets and in turn catering to their clients’ needs.

According to Brickendon, while political events will continue impacting financial services, including Brexit negotiations, next year digitalisation and data will dominate alongside Robotic Process Automation and Blockchain, making larger waves in the sector and paving the way for uncapped growth and innovation.

  1. A Data Future. Access to it, and the ability to mine data, will be central to everything that happens in the future of financial services. Now that the data is loaded, and the toolsets are understood and available, 2018 will see it being used for operations and technology processes.
  2. The Rise of Robots. Robotic Process Automation (RPA), which uses software robots or ‘bots’ to mimic human activity, has the potential to unlock yet more value by freeing up employees to focus on value-added work – ultimately transforming the way the financial services sector operates. In 2018, we will see how this will impact RegTech, data analytics and ultimately how organisations service their clients. A gamechanger for the industry will be the start of the processes to replace people with robotics and machine learning.
  3. The Reality of Blockchain. The use of the distributed ledger technology will no longer be just hypothetical. The opportunities for financial services who invest in such technology are endless from reducing operational costs to improving efficiency.
  4. Simplifying Digitalisation. Business is becoming more about the user experience. Automated user interfaces can go a long way to helping this and embracing digitalisation is key in making it happen. The upcoming year will be all about the simplification of processes and digitalisation.
  5. The Changing Political Climate. Brexit will remain a buzzword and continue to make headlines. As more details of the UK’s departure from the EU become clear, we will see banks and institutions adapting accordingly. Many will have to keep a close eye on their strategy if they are to survive and thrive in 2018.
  6. Banking Regulations. 2018 will be a turning point for financial regulation. Alongside General Data Protection Regulation (GDPR) and Markets in Financial Instruments Directive (MiFID II), the requirements for central clearing and the second Payments Services Directive (PSD2) will force significant changes to the banking environment, with the innovators and disrupters emerging as the winners.
  7. FinTech Collaboration. One of the largest technology shakeups in banking in recent years has been the use of advanced data analytics techniques to catch rogue trading activities within banks. In 2018, banks will have to decide whether to service clients in house or through a third party to stay competitive.

(Source: Brickendon)

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