Despite the mobile channel being an increasingly lucrative one for fraudsters to exploit, efforts to implement watertight authentication are being stymied by a lack of clarity around which party is liable in the event of sensitive data being compromised by hackers. It is time that mobile network operators (MNOs) and banks made a concerted effort to clear up this confusion and enable a positive customer experience to come first.

According to Aspect Software, the battle against fraud is one that is still being fought fiercely, especially as cybercriminals become more savvy in the way they conduct their activities. According to the Information Security Media Group’s 2017 Faces of Fraud survey, 52% of businesses polled stated that today’s fraud schemes are too sophisticated and evolve too quickly for their organisation to keep pace. For the mobile channel in particular, incidents of ‘SIM Swap’ fraud – which sees criminals steal money from bank accounts by digitally duplicating SIM cards via social engineering – accounted for 11.5% of total mobile fraud in the past year, according to Aspect’s own figures, attained through its work with banks and MNOs over the last 12 months.

These figures underline the importance of multifactor authentication in getting the upper hand in the fight against fraudsters. However, many organisations remain bogged down in debates over liability, which is slowing down the pace of adoption and risking compromising the trust of their customers.

Keiron Dalton, Global Program Senior Director at Aspect Software’s digital identity division, said: “The issue of liability regarding fraud can be something of a minefield. When working with third-party authentication providers to secure the mobile channel for mobile or telephone banking, it can be a challenge to establish clear, consistent lines of accountability in this area. This lack of direction and transparency can hinder the adoption of high-quality authentication which, crucially, creates a greater risk of customer trust being damaged if a data breach strikes.”

Keiron believes that MNOs and payment services providers, including banks, need to work towards re-evaluating the relationship they have with third-party authentication providers, to a point where a clear understanding is reached on the subject of liability. For Keiron, this means firmly establishing the authentication provider as a partner who provides an essential service along with recommendations on how the company can further improve its security practices, while final liability rests with the company that holds the data.

He concluded: “It is vital that businesses do not lose sight of what is most important when it comes to fraud prevention: maintaining a positive customer experience. This can only be effectively delivered if the organisation in question maintains strong relationships with its authentication partners, and ensures that the boundaries regarding liability are clearly defined. Key to cultivating lasting customer trust is being able to confidently communicate what is being done to keep data safe. If these internal relationships can be effectively managed, this assertive outward persona will come to the fore naturally.”

(Source: Aspect)

Bangalore-based software company Ezetap has developed a platform that makes it easy to pay anywhere with any device you like. It has created software allowing a merchant with a smartphone to accept any type of payment and see that money moved seamlessly into their own bank account.

Mobile shopping in the UK, France and Germany accounted for 28% of online Christmas orders in 2016, according to CJ Affiliates, with the UK bringing in an even bigger proportion at 44%. And these figures are set to grow even more in the lead-up to the 2017 festive period.

According to Keiron Dalton, mobile banking expert from Aspect Software, with the Golden Quarter set to see another boom in mobile payments and complex transactions, the opportunities for fraudsters to make their move on the shopping public is higher than ever. Keiron, head of Aspect’s global digital identity division, also argues that fraud that relies heavily on social engineering and bypassing weak security processes, such as SIM Swap, is seeing an upward trend in the UK and other regions, including Africa. According to Keiron, fraudsters not only take advantage of the upswing in mobile payments activity, but the sentiment surrounding the holiday for a lot of people.

Keiron explained: “SIM Swap fraud occurs when a criminal registers an existing phone number of a victim on a new SIM card by impersonating the victim to the mobile phone provider. Once activated, a criminal will receive all the calls and SMS notifications sent to the victim’s mobile number and can deactivate the original SIM card in the process. Once in control, criminals are able to bypass SMS-based one-time-passcodes, and steal large amounts of money quickly. This often happens before the victim is even aware they have been targeted.”

“We are working closely with the GSMA, as well as with a number of big banks and leading mobile network operators in the UK and in the rest of Europe to build a collaborative effort to fight new types of fraud like SIM Swap, but consumer awareness of the crimes has stayed relatively out of the headlines. If your phone or SIM card has been compromised, there are a number of tell-tale signs to look out for before it gets too far,” Keiron said.

1. Phishing messages and suspicious communications asking for information

SIM Swap fraud requires the hacker to have access to a victim’s bank details. These are often obtained through an email phishing attack, unsolicited communications asking for details, or by purchasing that information from online crime gangs. You should never respond to these types of communications or send your bank details on any platform that could be read by someone else. Your bank will never ask for this information so don’t be fooled by fraudsters imitating your bank. This leads to the initial opportunity to get account access or access to a duplicate SIM card; it also could provide criminals with the answers to personal security questions.

2. Extended loss of signal

Once SIM Swap fraud has occurred, it is not instantly noticeable to the victim. Extended loss of signal is the initial sign that SIM Swap fraud has taken place, as the control has been switched to a new device. Contact your mobile network provider to check if it is a widely known issue, or isolated to your device.

3. Floods of calls and messages

This is a tactic that runs parallel to the extended loss of signal. Criminals will send a flurry of nuisance calls and/or messages in an attempt to get victims to turn their phone off. If you’re suspicious, it’s vital that you don’t turn your phone off as this is used as a distraction to delay you noticing a loss of service when a SIM is swapped.

4. Opening links on your phone

Whether the link is sent to a victim via a phishing message or is on an unknown website, mobile phone users should be cautious when opening links on their device, and delete anything suspicious immediately. Hackers can use links that contain application packages that, if installed, will give the people behind the malware administrator rights to the victim's device.

5. Be aware of the source of any applications you download

Only download applications or make in-app purchases from approved sources or stores. To prevent suspicious applications from being installed, Android phone users can go to Settings/Security and turn the ‘Unknown Sources’ option off, which will stop the phone installing them from anywhere other than Google Play.

(Source: Aspect)

Here John Milliken, Chief Operating Officer at Infomedia, delves into the statistics and facts of online, mobile and digital payments, how they differ between regions, and why.

According to a report by UNCTAD - the United Nations body on international trade and development - online, mobile and digital currency payment systems are set to overtake credit and debit cards as the most popular ways to pay in e-commerce worldwide by 2019. The research suggests that the share of credit and debit cards in global payments will drop to 46% by 2019 from the 51% forecasted three years ago.

Last year, China’s mobile revenue hit $5.5 trillion, a figure that is 50 times more than the size of America’s $112 billion market, according to consulting firm iResearch. Similarly, in the last year alone, Japan’s e-commerce market was valued at $89 billion, with half of that coming from mobile.

By comparison, in the UK and US, many brands, from retailers to publishers, continue to struggle to deliver a mobile experience that enables a convenient and simple payment method and encourages consumers to spend. As a result, despite the fact that mobile devices have consistently driven the highest levels of engagement compared to any other platform, it continues to experience the lowest conversion rates.

So, what is it the East is doing differently to the West that has caused mobile revenue to sky rocket?

The Asian Mobile Market

The Asian technology industry - particularly mobile - has pulled ahead of what we’ve seen in the West. China and Japan, like many other developing markets, have not followed the pattern of the West in going from physical shops to PC to laptop to smartphone. Instead many consumers are going straight to smartphones without previously owning a fixed internet connection.

According to Zenith’s Mobile Advertising Forecasts for 2017, mobile accounts for 73% of time spent using the internet globally, however in the UK this figure is just 57%. By comparison, in China, internet users reached 668 million in June 2015, and 549 million of those users (almost 90%) access the internet primarily via their mobile devices. In other words, the number of internet users in China is more than twice the population of the US and almost the population of Europe, and most of those individuals are walking around with a smartphone.

With these figures in mind, it’s clear that mobile is prevalent in China - it’s a way of life, not just a medium of communication. On mobile, consumers talk, text, shop, order food, hail taxis, book travel, pay for products and services, deposit money into their bank or transfer money, amongst other things. Most Chinese companies have recognised this, and build their advertising and marketing, customer communication, shopping, purchasing, and even their payment programmes around mobile. In fact, about half of all e-commerce in China happens on mobile, compared to just over a fifth in the US and around a third in the UK.

As a result, rather than focusing on card payments, merchants and mobile operators in China and Japan have worked together to develop truly frictionless mobile payment processes. In China in particular, much of this is driven by mobile payment services via social messaging service WeChat and AliPay, its paypal equivalent. In fact, Alipay recently signed with Starbucks to enable e-payment at all 2,800 Starbucks locations, while at a KFC, diners can pay via Alipay using facial recognition technology. In Japan however, DCB is the most popular payment method accounting for more than 50% of all ‘online’ transactions - a number that has risen consistently over the past five years as more consumers move away from card payments.

It is clear there is an opportunity for brands to deliver the same conversion rates on mobile seen in Japan and China if they are able to adapt to behavioural change. And although the Chinese market appears to be different to the West, it has actually just reached the predicted next stage for all markets quicker. By acknowledging that consumers want the quickest and easiest payment processes, we can also deliver an experience that is frictionless and encourages customers to convert from browsing to spending on mobile. In summary, it is only when brands begin to deliver and offer a mobile first experience that they too, will be able to maximise on the mobile opportunity.

Whilst recent cyber-attacks have highlighted the need for all organisations to review their IT security, many business owners remain unaware how vulnerable reliance on mobile devices can leave them to cybercrime.

According to a recent report, two thirds (64%) of SMEs currently rely on mobile phones for business purposes, with an increasing majority of these (49%) being smartphones. However, recent reports indicate that iOS devices such as iPhones are no longer immune to malware attacks and Android-powered phones remain especially susceptible to malicious mobile apps. As a result, A&O IT One Solution (www.aoitgroup.co.uk) is urging small businesses to minimise their corporate security risk by a full audit to assess their threat levels.

With 66% of SMEs having experienced cybercrime, the worldwide IT support and technology services specialist recognises that smartphones are not always covered within their computer and internet usage guidelines. As a result, employees may not realise that mobile malware could allow hackers to access sensitive information, from downloaded work files and confidential emails to login details.

Rod Moore, chairman of A&O IT One Solution, said: “As mobile devices continue to blur the lines between traditional phone and IT devices, it can be all too easy to overlook how smartphones are an extension of your IT equipment. However, with cyber-related attacks having the potential to bring small businesses to their knees, it’s essential that SMEs ensure any phone being used for work purposes has the same level of antivirus software installed on it as office computers.”

(Source: A&O IT)

Police now hold more than 20 million facial recognition images. Included on the databases are the faces of hundreds of thousands of innocent people - which the Government says don't need to be deleted.

Sky's Technology correspondent Tom Cheshire reports.

People unlock their phone and, increasingly, shop and pay with the touch of their finger. They don’t get locked out when they forget a password because it has been replaced with a simpler, more secure option – mobile biometrics.  Whether using a fingerprint, an iris scan or a “selfie” to confirm identity, banks see biometric technology as a way to provide greater convenience and security to customers as they use their accounts. But, it’s still early days in mobile biometrics, and a new report from Mastercard and the Department of Computer Science at the University of Oxford highlights a big barrier. Only 36% of relevant banking executives feel they have adequate experience to deliver.

To overcome this knowledge gap, ‘Mobile Biometrics in Financial Services: A Five Factor Framework’ explores this fast-evolving technology landscape and provides bank executives with guidelines to successfully bring mobile biometrics to life. Simply put, they need to focus on Performance, Usability, Interoperability, Security and Privacy.

Some of these factors are more visible to the consumer, having a real impact on user experience, while others operate behind the scenes. But, long-term success for a bank requires that they address all factors equally to protect against threats. The framework can help financial service companies avoid the trap of focusing only on the ones their customers see.

“Biometric authentication has a lot of potential, but it is important to address the objectives of each of the Five Factors when designing solutions. Working together with Mastercard enables us to solve for realistic threats to the industry with the best technical and scientific ideas. Users will need consistency, quality and assured security for this technology to thrive,” said Professor Ivan Martinovic, Department of Computer Science at the University of Oxford.

Ajay Bhalla, president, Global Enterprise Risk & Security, Mastercard, commented on the research initiative in a blog, saying: “Effective mobile biometrics melt into the broader experience of consumer-centric financial services, giving people the power to instantly access their financial information or make a payment. They’re driving the trend toward a password-free future where digital identity is all about who we are, not what we remember.”

Considering that global sales of smartphones are expected to reach $400 billion by next year, people everywhere will increasingly have access to the tool that makes mobile biometrics possible. Banks see that as an opportunity, and with initiatives like the collaboration with the University of Oxford and pioneering biometrics solutions like Mastercard Identity Check Mobile, Mastercard is a partner to deliver widespread and responsible adoption of mobile biometric solutions in financial services.

As Bhalla continued, “This framework is fundamental to accelerating the deployment of mobile biometrics for consumers and industry alike, but collaboration is key. We can only achieve this if industry, academia, governments and technology vendors understand and contribute to the evolution of the Five Factor Framework for mobile biometrics.”

“Mastercard and Oxford have done important work in exposing some of the root causes for the inconsistent adoption of mobile biometrics in financial services,” said Ravin Sanjith, Program Director: Intelligent Authentication, Opus Research. “We expect the Five Factor Framework to become an indispensable aide for industry professionals and decision makers to have better informed, strategic discussions that drive towards more efficient and successful high-scale implementations.”

Anthony Duffy, Director of Retail Banking, UK and Ireland at Fujitsu told Finance Monthly:

“The news that biometric authentication is now consumers” preferred choice for their financial services security is further evidence that biometric technologies are coming of age. Biometric solutions have been used overseas for many years, with Brazilian, Japanese and Turkish banks all using Fujitsu biometric solutions to support day-to-day banking transactions. However, it is only recently that British banks have started to deploy the technology on a significant scale. We are seeing a growing confidence in the security and effectiveness of biometric technologies, perhaps in part brought about by both Android and Apple mobile devices using finger/thumb print scanner technology as an unlocking option. After all, as the technology goes from new to familiar, there’s a natural acceptance and understanding, which breaks down previous barriers to entry.

“Financial institutions are keen to enhance their security measures further and to improve customer service. Biometric technologies, by being unique to the individual, help achieve both goals. Their use often reduces the use of passwords, or even eliminates them altogether, while often also providing an audit trail. When deployed to help identify customers, their use can speed up the identification and log-on process, by removing the need for security questions.

“The reliability, security and accuracy of biometrics make them ideal for banking. Add to that the widespread adoption of biometrics on mobile devices, and it’s clear the technology is set to flourish. Consequently, at Fujitsu, we believe that the use of biometrics in banking is something we will see much more of in coming years.”

(Source: University of Oxford)

Authored by Grant Thomas, Head of Practices at BJSS, the below provides Finance Monthly with particular insight into the top trends and movements UK financial services organizations will encounter in 2017, and increasingly in the future.

Financial services have always been at the forefront of technology. The industry was amongst the first to invest in mainframe computing, while it pioneered complex integration points to global payment switches, and in 1967 Barclays introduced the concept of self-service with the world's first ATM.

Fintech takes this innovative spirit a step further, and in spite of operational challenges, is driving the development of pioneering ideas to improve customer experience, efficiency and security in the Financial Service sector.

1. Brexit has injured Fintech. But not fatally.

One of the biggest questions to be answered this year is the extent to which Brexit will stifle Fintech innovation and if there will be an exodus towards competing financial centres such as Paris and Berlin.

At face value, things look challenging. Proposed restrictions to the free movement of talent may make it more complex and expensive to hire experienced staff. The process of securing VC funding is likely to become more rigorous as financiers look towards investing in less politically risky climates, but many opportunities still exist.

The key opportunities are that the lower value of the pound has made UK providers more commercially attractive, allowing local firms to compete against their offshore rivals. Added to this, changes to the regulatory environment, and continued R&D in complementary technologies will mean that London will continue to play a leading role in Fintech.

2. Product roadmaps will adapt to support the Bank of England’s new regulatory environment.

The UK will be keen to remain an attractive financial destination, so the Bank of England will take a critical look at its regulatory environment, deciding on which financial regulations require tweaking, diluting or eradicating. The regulator will also look at introducing new financial products, as demonstrated by a recent announcement of its ambitions to launch a Bitcoin-rival cryptocurrency. As a result, Blockchain, which automates and adds transaction security, will continue to attract investment.

Also, evolving regulatory directives such as Open Banking and PSD2, will create an even more difficult operating environment for established players – there will be great demand for Fintech providers to help plug this gap.

3. Mobile devices will become Fintech’s primary channel.

According to Ofcom’s 2016 Communications Market Report, Smartphones are now our preferred channel for accessing online content. Now they are set to become the main way of managing personal finances. Already three out of every ten mobile internet users use their devices to access their bank accounts, while two out of every ten use their devices to complete electronic payment or transfer transactions.

While most consumers are already familiar with services such as Apple Pay, Android Pay and Samsung Pay, Fintech providers will exploit online as well as built-in NFR and biometric technologies to introduce peer-to-peer payments, digital-only banking, forex, and mobile wallet products.

But mobile is just one part of the future of Fintech, and the ability to crunch diverse and deep datasets will drive greater innovation.

4. Customer take-up will be driven by Big Data, Data Science and Analytics.

Fintech providers will look at exploiting tools such as Hadoop, Python, NoSQL and Spark onto Private and Public Cloud services in order rapidly to deliver outcomes and to identify and understand customer behaviour and target markets.

Big Data will be combined with sophisticated machine-learning algorithms to upsell products and services based on key life milestones. This use of data science will proactively push financial products based on customer behaviours, instead of simply waiting for clients to submit product applications. Modern computing and advanced mathematical techniques enable personalisation, at any scale, and without human intervention.

5. Artificial Intelligence and machine learning will use this data to put a human face in computing decisions.

AI technology presents a huge opportunity for Fintech providers because it combines the rules-based reality of computing, with a human interface. It enables providers to take quick, business-safe decisions while reducing the processing time of routine customer enquiries. The model can be adjusted to accommodate customer preferences, their demographics, and interests. Thanks to language interpretation, a customer will be able to ask a question, which will be processed and answered by a Bot either by through text to speech or instant messaging services.

AI has development commitment from the big players. Apple, Amazon, Google, Facebook, IBM, and Microsoft have partnered on a non-profit joint venture which aims to “conduct research, recommend best practices, and publish research under an open license". AI is becoming mainstream.

By adding machine learning to the mix, the accuracy of chatbot responses is improved. When combined with AI and superior user-driven service design, Fintech providers are able to provide compelling and personalised customer interaction products to improve reliability and customer satisfaction. Those Fintech providers who focus on using AI and machine learning will pioneer a customer experience revolution: CX2.0.

This will lead to the death of ‘off the shelf’ and proprietary one size fits all.

Wide-ranging standards such as Blockchain, mobile, Big Data, AI and machine learning preclude a single one size fits all “off the shelf” solution. Fintech providers with ambitious roadmaps will embrace low-latency products based on enterprise-grade Open Source which are proven and secure.

Also, given the speed at which this new technology is evolving, Fintech providers will adopt an Agile approach to building their products. The benefit of Agile is simple. It accelerates delivery processes, and through on-going planning and feedback, ensures that value is maximised. Crucially, Agile also supports continuous delivery, ensuring that quality is maintained and that any risk of failure is reduced. With Agile and continuous delivery, Fintech providers will be able to rapidly develop and refine their products to support an ambitious roadmap. They enable Fintech providers to ensure that the engineering of their products, integration, functional and non-functional tests, deployments and provisioning are catered for throughout.

Britain’s role in the Fintech space is secure and, thanks to a range of next generation technologies, coupled with an improving operating environment and Agile development processes, will provide compelling products and innovation that will boost service provision and reduce costs.

Two thirds (64%) of 18-25 year olds in the UK now use a mobile wallet, according to research released by social money transfer app Moneymailme.

The research reveals that 48% of 18-25 year olds believe that physical money will be obsolete within 20 years, while more than a third (38%) say that we will no longer need it in 15 years’ time. Less than three in ten (28%) say that they don’t think cash will ever stop being used or produced.

The research, which surveyed 1,000 18-25 year olds across the UK, known as Gen Z, revealed that young people prefer alternative methods of payments to cash, even for small purchases. Eight in ten (79%) say that they make purchases under £20 at least once a day, but when asked how they feel when faced with a ‘cash only’ sign at a bar or a shop nearly two thirds (62%) say that they felt frustrated. One in seven (14%) said that they would be frustrated enough to leave and go elsewhere.

In terms of mobile wallet preference, PayPal seems to remain one of the most frequently used online payment services among 18-25-year old’s (52%), while newer entrants to the market like Apple Pay (18%) and Google Wallet (9%) are starting to gain more market share.

While 36% say that they currently don’t use a mobile wallet only 14% say that they have no interest in having one, suggesting there is room for considerable growth in this market for services that appeal to the younger generation.

Nearly half of respondents (49%) say that they pay back their friends up to £10 per month, but almost a quarter (22%) wouldn’t consider a bank transfer for under £10, which currently leaves them reliant on cash to share money unless they have access to a mobile wallet.

Moneymailme CEO Mihai Ivascu said: “This generation of young people has grown up with mobile technology and for many of them using cash seems like a very dated concept, especially with the range of alternatives available to them. In 2015 electronic payments overtook cash for the first time in the UK and as this generation gets older this trend is only going to continue until producing physical cash is no longer desirable.”

Moneymailme, which combines social interaction with the instant sending and receiving of e-money in over 130 countries, recently launched the fintech industry’s first app to offer video calls with cash transfer capabilities to make sending cash to a friend or family member a more personal experience.

(Source: Moneymailme)

From chatbots to instant payment solutions, Finance Monthly has heard from Ralf Ohlhausen, Business Development Director at PPRO Group, who gives his top 10 on the ever-changing payments sphere, the fintech disruptions of 2017, and the latest regulatory updates for the coming year.

1. Usability of payment methods

Payment methods need to become more user-friendly to appeal to various platforms of commerce from the till point to online, taking differing devices into consideration in order to stay competitive. This is especially important for providers of e-commerce payment methods who need to come up with optimised user experience and facilitate the growing trend of mobile payments.

2. Strong Customer Authentication (SCA)

SCA becomes a mandatory part of the Payment Services Directive 2 (PSD2), which will be implemented in the member states of the EU over the next two years. Unfortunately, the SCA’s increase in security will likely affect usability, which is completely contrary to what merchants and consumers want. New innovations around authentication methods may reduce the problem, but may also lead to more advanced concepts overall, making SCA obsolete.

Going forward, we will see increasing discrepancies between fast moving technology and slow moving regulatory changes - a difficult dilemma, which can only be overcome by fundamental changes in the regulatory approach. If you are impacted by SCA watch out for exemptions that might be granted and new authentication methods mitigating the adverse effect on usability.

3. Mobile payments

There’s been some bad news for mobile-payment sceptics. According to the 2016 Visa Digital Payments Study, in just one year the number of European consumers using mobile payments has increased by 200%. Previous scepticism may have been prompted by the fact that it took mobile payments longer to take off than originally predicted.  Bashing mobile-payments also became a favourite sport for some journalists.  But that doesn’t change the fact that mobile has now reached its tipping point. And with companies such as Apple and Samsung now getting serious about mobile payments, it seems a fair bet that the pace of that change is about to accelerate.

ApplePay is now rolling out to most major markets. And it’s doing so, as it turns out, exactly as consumers are starting to accept mobile payments. Given how often Apple has got it right before, particularly in terms of user experience, there’s every reason to be optimistic this time too. That can only be a good thing both for mobile payments and for the alternative-payment market as a whole. On a more wide-ranging note, this is a lesson for all of us in the industry. New developments invariably go through the whole of the hype cycle — including what Gartner refers to as the “trough of disillusionment”, when everyone is pointing to early failures and disappointments and saying “it will never work.”

As an industry, we’ve got to get better at recognising this cycle for what it is. We need to stick with good ideas, even when they don’t seem to be fulfilling their early hype. Because good ideas don’t go away. And no one wants to be the late adopter when, suddenly, everything starts coming together at last.

4. Instant Payments

The Euro Retail Payments Board (ERPB), a successor of the SEPA Council, is currently pushing very hard to make sure that SEPA is not falling behind the many national initiatives for implementing faster and even instant payments. The European Payments Council (EPC) just published their first rulebook for instant SEPA credit transfers (SCT Inst), which will bring down the crediting of the beneficiary’s account from one business day to a mere ten seconds. Similar instantaneous funds availability shall also come to SEPA Direct Debits, Cards and other payment methods. Implementation of SCT Inst will be optional for all the banks (at least for now) and may take some time, but the future of payments will be instant – just as it happened to messaging, the purchase of books or music and many other things of our daily lives already.

5. Access to Account

January marks one year until the Second Payment Services Directive compliance deadline, which will bring the new concept of “Access to Account” (XS2A) into the EU. Licensed Third Party Providers (TPPs) will be granted access any bank account in the EU to provide payment or account information services to their customers. 2017 will see increasing competition to the additional layers of value-added services (VAS) presented to banking customers.

6. Chatbots

At the beginning of 2016, internet giants rushed to incorporate an Application Programming Interface (API) into chat programs – also known as chatbots – for automated communication with customers. After a year of creating a firm presence in the UK, chatbots will become one of the biggest innovations in 2017 since the introduction of smartphones and it won’t take long until “chatbot payments” are the norm.

7. Blockchain Technology

The underlying blockchain technology behind bitcoins will certainly make further headlines in 2017. Blockchain is a database where all bitcoin transactions are saved. It consists of a long chain of data blocks in which one or more transactions are being compiled, encrypted and securely stored. Transactions are very fast with blockchain, and although they are not made in real-time, they are very cheap. Ideas, where the blockchain technology might be used in the future, are only just being developed. Basically, however, it is already clear it could be beneficial for all transactions that are currently in need of a “trusted third party”. One example is smart contracts. Instead of solicitors, computers take over the contractual management, meaning that they are proofing all preconditions in live mode and are able to realise individual agreements automatically.

8. Anti-Money Laundering

It has been much speculated whether the fifth Anti-money laundry directive (AML5) will actually come into play in 2017. If it does come in the form currently proposed by EU legislators, it will have a massive impact on e-money institutions. The already low limits for e-money usage without Know Your Customer (KYC) processes will be further decreased in a way e-money will lose its appeal over standard banking. That would through the baby out with the bathwater and could collapse the whole EMI industry.

9. Peer-to-Peer (P2P) payment

Person-to-Person or Peer-to-Peer (P2P) payment solutions have been popping up across Europe and the rest of the World for quite some time, but we can expect 2017 to see the method to gain traction here in the UK. The European Retail Payments Board (ERPB) is working to facilitate the co-operation of existing and future P2P mobile payment solutions to ensure interoperability on a pan-European level. The vision is to provide any person with the ability to initiate a pan-European P2P mobile payment safely and securely. 2017 could finally see a standard brought into place which reaches a critical mass of people and enables P2P payments without the need for knowing lengthy bank account numbers.

10. Cashier-free stores

Amazon recently unveiled plans to bring a chain of cashier-free stores to the UK next year. By using technology to track which items have been selected, the store will remove the need for products to be scanned or for customers to queue at a checkout as customers will be able to pay via smartphone as they exit the store. The introduction of such stores will accelerate the UK’s move towards a cashless and even encourage a card-less society in 2017.

New mobile payment platforms have contributed to a surge in bank account holders in the developing world with more than 700 million people leaving the ranks of the “unbanked” in the past three years, according to a World Bank survey.

Anne MacRae, Head of Financial Services, Fujitsu, emphasised the importance of the progress that is being made in the sector and how digital uptake needs to be continued. “The digital enabled hyperconnected world is powering an industrial revolution in developing countries turning people into consumers and consumers into entrepreneurs. Banks have stepped up to their role in this social change by delivering mobile application enabled banking services, which support new business models and creating new consumers through access to this digital ecosystem,” she commented.

The 140-country survey of 150,000 adults conducted in 2014 and released in April also highlighted the huge challenges that remain in meeting a goal of getting universal access to financial services by 2020.

Some two billion people in the world — more than a quarter of the global population — remain without bank accounts the survey found. More than half of the poorest 40% of people in developing countries still do not have accounts.

A significant gender gap also remains in the access to accounts. A similar survey in 2011 found that less than half of the women in the world had a bank account. That number rose to 58% in the latest survey.