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  • @fintechna 3:35 am on September 20, 2018 Permalink | Reply
    Tags: , , , , crucial, , , , shifts, technology   

    Retail payments: 5 crucial market shifts 

    I always like to start from the beginning. So, let me begin my blog by introducing myself. I recently joined Accenture to lead our North America practice. After more than 30 years in financial services—much of it working with companies across the and commercial payments value chains—I am no stranger to change.

    But in today’s era of digital payments, it is not just velocity of change but the scale that brings with it both opportunity and peril. It is exhilarating, but can be overwhelming. My focus is helping payments players make sense of it all, so they can harness the potential of digital payments to drive their businesses forward.


    Retail payments is in the thick of digital disruption. That should be no surprise. Digital is reinventing daily life fast—how we watch, listen, talk, shop, travel, ride and connect. It is a powerful and profound force of change. One that is ubiquitous for everyone. The combination of consumer demand, evolving technologies and retail dynamics is creating a new future for retail payments with digital payments at the core.

    These are the five market to watch:

    1. Mobile jumps on the S-curve

      Remember when you joined Facebook or made your first online banking transaction? I bet you did it from a desktop computer. I also bet that today, you check social media and bank from your smartphone. This is the trajectory of digital adoption. All roads lead to mobile. While US consumers haven’t embraced mobile payments with the gusto we expected considering their smartphone obsession, a tipping point is near. Accenture research shows that 64 percent of North American consumers plan to use a mobile wallet in 2020—a 39 percent rise in the user base in three years.1

      This is a pivotal moment for payments players. Should they double down on the inevitability of mobile as THE consumer access point or move more deliberatively? History offers a cautionary tale. From Blockbuster and Napster to Borders and Polaroid, there’s a graveyard of companies that took a wait-and-see approach to digital disruption. Digital economies tend to scale toward natural monopolies with most markets consolidating into a handful of winners—Amazon owns nearly half of the US e-commerce market.2 I expect this consolidation to occur in mobile payments too. That’s why payments players should act now to create mobile payments experiences that capture consumer’s hearts—and wallets.

    2. The great vanishing act

      Consumers want payment transactions to disappear. Uber, Amazon and countless online subscription companies have shown that making a payment can be seamless and convenient. So much so that the payment becomes invisible. Consumer interest in frictionless payments is palpable driving recency, frequency and monetary value to digital payment savvy retailers. Consider that visits to US restaurants where payment is by mobile app jumped by more than 50 percent over the last year.3 I expect this interest across all retail categories to gain momentum fast.

      But the payments industry has work to do to meet consumers’ expectations. Today, the payment transaction is often the speed bump—actually, the rush-hour traffic jam—in the retail experience. Research reveals that consumers loathe complex checkouts. In fact, they will not stand for them. Eighty-seven percent of online shoppers abandon their carts due to complex checkout. And over half (55 percent) would not just leave their carts, they would never come back to that retailer’s site.4 The time has come for payments players to make invisible payments a visible priority.

    3. RIP, channels

      Traditionally, companies were built in a linear fashion with stores, call centers, online and mobile—a maze of departments, functional areas and channels. These silos reflect organizational structures and internal complexities, not consumer mindsets and behaviors. Put simply, channels are about companies, not consumers.

      When consumers interact with payments companies and merchants, they want to learn about a product, buy a product, or service a product. They want to do this on their own terms. And in the digital era, they have countless options to do so. For payments players to be truly customer-centric, they have to stop being product- and channel-centric. They must kill channels as we know them, driving integration and absorbing complexity to provide simple, streamlined experiences to consumers. Integration must be so seamless that channels stop existing. Rest in peace.

    4. Recognize. Remember. Recommend. Reward.

      The three Rs of education are reading, writing, and arithmetic. The four Rs of the customer-centric business model: recognize me regardless of my entry point and device, remember my history of interactions, recommend relevant products and services, and reward me for my loyalty. There’s been a wake-up call for payments providers in recent years related to these four Rs. The old days of focusing purely on payments transactions are no more. After all, the digital economy is an experience economy. More and more, the customer (and merchant) experience is becoming a critical differentiator in retail payments.

      As payments players develop customer experiences beyond the transaction—such as providing advisory or expense management services, offering a single view of account information, or curating real-time rewards and deals through partner networks—they should look to digital powerhouses that excel in customer experience. Amazon is a leader. The company recognizes and remembers consumers every time, recommends products they will love, and rewards them. The benefits are mutual. Amazon Prime members spend about $ 1,300 more each year than non-members.5

    5. Security&8217;s silver lining

      There is not a more serious or consequential issue for payments players than security. Without it, nothing else matters. A day does not seem to go by that there isn’t news of a breach. As cutting-edge as their technologies are, even digital-born companies like Facebook and Google are not immune.

      There is a silver lining in this storm for traditional financial institutions. Security is never absolute, and criminals are always getting better at being bad. Protecting data is central to the industry. It always has been. Compare this to the fact that digital competitors have built their business models on packaging and selling data, not on protecting it. The clarion call for payments players is to double down on security, to keep innovating to protect data while it is stored, and while it is in flight. Tokenization is the gold standard now. Expect biometrics and continued migration to multi-factor authentication to be the next wave.

    In future blogs, I will explore these market shifts in detail and how new players are taking advantage of them. In the meantime, I hope to see you at Money 20/20 where Accenture will share more insights on what’s next in digital payments.

     

    1 Accenture, “Driving the Future of Payments: 10 Mega Trends” 2017
    2 Ingrid Lunden, “Amazon’s Share of the US E-Commerce Market is now 49%, or 5% of all Retail Spend” 7/13/2018
    3 NPD Group, “In a Slow Market, US Restaurant Operators Step it Up by Offering Consumers Digitally-Enabled Convenience” 3/13/2018
    4 James Melton, “Getting the Online Checkout Process Wrong Can Be Costly, Research Shows” 8/13/2018
    5 Beth Braverman, “Amazon Prime Members Spend More on the Site— a Lot More” 7/7/2017

    The post Retail payments: 5 crucial market shifts appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 9:53 pm on September 12, 2018 Permalink | Reply
    Tags: AssetBacked, , , , , technology,   

    Using Blockchain To Record Asset-Backed Securities 

    Asset back is ripe for with just a few active in the market and outdated -keeping on paper and Excel.
    Financial Technology

     
  • @fintechna 3:36 am on September 11, 2018 Permalink | Reply
    Tags: , , , , , , technology,   

    Beyond plastic: Payments in a connected world 

    Guest blogger Jeff Crawford, Senior Manager with extensive experience in digital and mobile , discusses how the Internet of Things and commerce introduce new payments opportunities for existing players and new entrants.

    Gone is the where a watch just keeps time and a refrigerator simply preserves food. From wearables and smart speakers to smart appliances, connected cars and , the Internet of Things (IoT) has gained the attention of consumers and businesses alike. At its most basic level, IoT is the network of “smart”, connected devices or products that enable new forms of communication and new experiences. The global IoT market is estimated to grow to $ 2.9 trillion with 20 billion connected devices by 2020.¹

    IoT devices, combined with emerging payments capabilities, facilitate a connected commerce experience, providing consumers with a convenient way to transact by incorporating shopping and payments functionality into devices. For example, Amazon has enabled its customers to make purchases via its Echo devices using Alexa voice commands. Through the Groceries by Mastercard program, consumers can purchase grocery items through their Samsung refrigerators and have them delivered by the program’s grocery delivery services partners. Ford and ExxonMobil maintain a partnership to allow consumers to make Speedpass+ fuel payments through their in-car infotainment system.

    The physical device is only one component of the infrastructure required to support IoT payments. It also must include a user interface, which is often a screen, but may also be a button, voice interaction, or geo-location. The IoT device must establish and maintain connectivity to a back-end platform that receives the data; this connectivity may be supported via Wi-Fi, Bluetooth or LTE. Payment credentials must be tokenized and maintained in a secure environment, either locally or in the cloud, and security is embedded through advanced authentication, often in the form of biometrics (such as voice command).

    IoT payments require a coordinated effort through the device manufacturers, payment providers and integration partners. Visa and Mastercard are seeking to accelerate IoT payments engagement and enablement as part of the companies’ respective digital payment readiness programs, Visa Ready and Mastercard Engage. Both efforts have focused on facilitating secure payments across the value chain and connecting IoT device manufacturers to financial institutions. Discover and American Express have also linked payment tokenization platforms and security protocols to third-party products (namely, wearables) to enable their cardholders to take advantage of IoT-based products and services.  Such market activity represents a logical progression for payment networks to push new use cases for their tokenization offerings.

    As expected with any new payments technology, IoT payments have a heavy focus on security. Large chip manufacturers (including NXP and Intel) have entered the space, providing secure elements to store payments credentials. Other entrants focus on innovative methods of enhancing payments security. MagicCube, which names Visa² and Mastercard among its partners, offers device manufacturers a trusted execution environment (TEE) security platform to provide payments security in lieu of a secure hardware element or software-based encryption.

    It was not long ago that consumers, issuers, processors and networks were responsible for maintaining and securing only a single payments device: the card. As smart phones, refrigerators, watches and cars, among other things, become payment devices, card volume should start to migrate from the physical card to digital payments via IoT devices. Issuers must focus on developing strategies to ensure their cards remain top-of-wallet for consumers who make IoT purchases. Card networks are likely to continue facilitating partnerships with device manufacturers to optimize use of the emerging technology.

    For traditional card processors, there may be an opportunity to enhance the processing of solutions with features to support device management. For example, card processors might use a data field that tracks the device (card, phone, watch, refrigerator) and authentication method used to make a payment, thereby increasing the opportunity for more insightful customer analytics. There may also be opportunities for alternative, non-card payment mechanisms (real-time payments, /distributed ledger-based, and such) to take hold. We expect IoT payments to remain a key source of value, innovation and growth for both traditional payment providers and new market entrants.

    I invite you to read more about Accenture’s capabilities and offerings in the IoT and Connected Commerce space.

    Special thanks to David Cencula, who also contributed to this blog.

    1 https://www.gartner.com/newsroom/id/3598917
    2 Visa is also an investor in MagicCube 

     

    Beyond plastic: Payments in a connected world fintechJeff Crawford, Senior Manager, Payments

    Beyond plastic: Payments in a connected world fintechBeyond plastic: Payments in a connected world fintech

     

     

     

     

    The post Beyond plastic: Payments in a connected world appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 pm on September 9, 2018 Permalink | Reply
    Tags: , Chasing, evershifting, , , technology   

    Chasing ever-shifting payments fraud 

    Guest blogger Casey Merolla discusses how the shift from stolen consumer credit card data to synthetic identity is a growing problem.

    2017 was a monumental year for data breaches. Some 1,500 data breaches exposed the records of nearly 179 million Americans, affecting approximately 55 percent of the total US population.1 The increase in consumer data available to fraudsters is driving bank fraud losses higher every year, propelling the shift from counterfeit cards to identity theft and synthetic identity fraud. To combat these trends, financial institutions must look to more advanced tools and technologies to keep up with—and get ahead of—increasingly sophisticated fraud attacks.

    Until recently, fraudsters’ primary focus was on obtaining the card data needed to produce counterfeit cards.  Since the US rollout of EMV chip , however, counterfeit fraud is falling fast. In fact, credit card issuers reported a 60 percent decline in counterfeit card losses between 2014 and 2016, according to the Nilson Report’s most recent data.2 Now that the proverbial low-hanging fruit of counterfeit card fraud is effectively guarded, fraudsters are moving on to new areas. They have found a ripe opportunity in identity theft and new account fraud. They’re no longer looking just for card data to steal; they’re looking for personal information they can use to create new fake accounts.

    “Synthetic identity theft” has emerged as a major driver of fraud in the US. These are cases where criminals weave together real and fictitious information to create new, digital-only identities, and then use them to open new accounts of all types. This form of new account “theft” is attractive to fraudsters because it allows them to obtain control of the account, cultivate high credit limits and bypass account alerts—all to facilitate high-dollar transactions with low risk of detection. A recent Accenture survey indicated that losses on fraudulent credit card applications can be up to 4.0 bps of card sales volume3—and that that loss rate is increasing. On top of the identified fraud losses, synthetic identity fraud may also be hiding in a financial institution’s credit loss line item, with up to 20 percent of credit losses attributable to synthetic identity fraud, according to 2017 Auriemma research.4

    The government is taking some steps to help, enacting the Economic Growth, Regulatory Relief and Consumer Protection Act in spring 2018. The Act will allow financial institutions to validate social security numbers in near real-time with an electronic signature, rather than the current paper-based process, which can take weeks. The law also brings with it complex technical requirements, however, and has no official implementation start date or deadlines, leaving financial institutions to fend for themselves for the foreseeable future.

    Addressing synthetic identity theft will require financial institutions to develop more rigorous tools and processes for compiling and validating customer data at the time of account opening. Financial institutions should validate each data point provided by a new applicant, using both internal and external sources. These data points should include not just the traditional name, address and phone number, but also less-obvious information, such as the use of the same address, phone, email or even IP address by others. Chances are, a criminal will attempt fraud at the same bank multiple times, so capturing data through all contact channels can be highly valuable for use in identifying fraudulent applications later.

    Artificial intelligence engines and Machine Learning will likely play important roles in synthesizing the enormous pool of data, and the first step for financial institutions will be working to collect the data in a usable form. The task is daunting, but so is the future loss potential. Fraudsters continue to evolve their technologies and techniques, and if financial institutions want to keep up, then they must do the same.

    1Identity Theft Resource Center, 2017 Annual Data Breach Year-End Review
    2Nilson Report October 2017 – Issue 1118
    3Accenture Card Fraud Study, July 2017
    4Auriemma Consulting Group, Synthetic Identity Fraud Cost Lenders $ 6 Billion in 2016

    I invite you to join me at Money20/20, where I will be moderating a panel called Fraud Whack-a-Mole: Securing Payments in a Post-EMV World, Monday, October 22 from 1:00 pm – 1:40 pm.

    Chasing ever-shifting payments fraud fintechCasey Merolla, Senior Manager, Payments

    Chasing ever-shifting payments fraud fintechChasing ever-shifting payments fraud fintech

     

     

     

     

    The post Chasing ever-shifting payments fraud appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 12:18 am on September 9, 2018 Permalink | Reply
    Tags: 2000, , , , , , , , , technology,   

    JPMorgan Chase Has More Than 2,000 Open Tech Jobs 

    is on a roll with its digital hiring and currently has 2,000 positions. The bank is looking for a senior digital expert to join its Digital Strategy, Innovation and Partnerships team, as it continues to recruit talent as part of its effort to revamp its team. Last week, Adam K, [&;]
    Bank Innovation

     
  • @fintechna 3:35 pm on September 6, 2018 Permalink | Reply
    Tags: “New”, , , , , , collections, , Delinquent, technology   

    Delinquent debt collections in the “New” 

    Guest blogger Dan Kreis looks at the impact that a new generation of consumers and technologies will have on .

    Everything we know about collections is about to be challenged and reinvented. The magnitude of the shift can be observed through three key lenses: strategy, analytics and operations, as shown in Figure 1.

    Figure 1. Key collections migrations
    Delinquent debt collections in the “New” fintech
    Source: Accenture market observation and analysis

    What is driving the change?

    Unlike prior evolutions, the new age of collections is not being ushered in by economic downturn, runaway lending or regulatory fluctuation. It is being beckoned, primarily, by two phenomena: digital revolution and Millennials.

    Digital revolution

    At present, collections managers listen in on live or recorded collections calls to assess whether agents are performing adequately and inform potential corrective action. Such manual call monitoring practices are prohibitively time-consuming at scale. In practice, this means some 90+ percent of calls go unmonitored, leaving management largely in the dark as to their customers’ experience.

    Growing ever-cheaper and faster, voice transcription could monitor and collect data from every inbound or outbound customer call, for example. Detection of certain keywords, such as “bankruptcy” or “illness”, and customer tone could drive tailored treatment strategies in real time.

    Millennials 

    The number of Millennials in the US will soon pass that of the Baby Boomers, becoming our largest generation.  This group of young adults is dramatically different than their predecessors:

    • Few have landline telephones
    • Texting is their preferred mode of communication
    • Many will not answer calls from unknown caller IDs
    • Many have never activated or checked their voicemail

    Moreover, it is critical to understand that Millennials are not only our customers, but our collectors as well.  Having collectors who may be equally as unreceptive to conducting cold calls as customers are to answering them will require lenders to define new tactics to effectively collect in this new age.

    What do strategies look like in the &;New&;?

    Consider a hypothetical queue of delinquent customers whose accounts are two cycles past due. In the old-world order, an adaptive control strategy may have looked something like the scenario in Figure 2.

    Figure 2.  Illustrative Old-World Collections Strategy
    Delinquent debt collections in the “New” fintech
    Source: Accenture market observation and analysis

    Note that in the old-world order, past-due customers with similar data profiles and dollars-at-risk are treated the same.

    In the “New”, the collection strategy builds upon what we have learned over the years—and augments the treatment in real-time based on sentiment, keyword recognition and additional information as shown in Figure 3.

    Figure 3:  Potential New-Age Strategy
    Delinquent debt collections in the “New” fintech
    Source: Accenture market observation and analysis

    Under the potential new-age strategy, the treatment approach is tailored by incorporating sentiment, keywords and other alternative data. Barry, for example, is not assigned to an auto-dialing queue as his keyword indicator is “bankruptcy”, which suggests a different approach (a top reason people give for filing bankruptcy is to “stop the numerous collections calls”). Instead, Barry may be most responsive to push notifications or texting, given his activity on social media. For Jill, more traditional methods may be effective considering her concerned nature and lack of social media activity.

    The new-age approach greatly expands on the collections strategy design to include advanced machine learning beyond that of the traditional champion-challenger testing capabilities in the adaptive control decision engine. Not only will there be dramatically more treatments, but the results will be captured more rapidly using intracycle behaviors and payments. We also imagine the use of real-time sentiment and word recognition to inform the collections approach and negotiations with the delinquent customer.

    To remain competitive, debt collectors will need to understand the implications of today’s changes for their business, develop a plan to adapt and dedicate the resources required to execute successfully. Accenture is leading the industry into this exciting new era, bringing to bear our experience in advanced Machine Learning, Robotics and deep understanding of the collections and behavior sciences.

    I invite you to learn more about the data imperative and its potential.

     

    Delinquent debt collections in the “New” fintechDan Kreis, Industry Senior Principal, Payments

    Delinquent debt collections in the “New” fintechDelinquent debt collections in the “New” fintech

     

     

     

    The post Delinquent debt collections in the &8220;New&8221; appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 12:18 am on September 5, 2018 Permalink | Reply
    Tags: , , , , , , , technology   

    Which Fintech Companies Have Over 1 Million Customers? 

    startups, particularly neobanks, have long suffered from having great , but few using it. Simple and Moven had more innovative offerings than traditional peers, but that didn’t translate to more customers or more revenue. What was BBVA paying for when it bought Simple for $ 117 in 2014? It wasn’t the customers, which [&;]
    Bank Innovation

     
  • @fintechna 3:35 pm on August 28, 2018 Permalink | Reply
    Tags: , , , , defining, doomed, , , , , technology   

    Open Banking: defining moment or doomed from the start? 

    The impending arrival of in Australia may not be news to many in the financial industry. But judging by research we conducted recently, it certainly is to everyday consumers. Of the approximately 2,000 consumers we surveyed, a mere 17 percent were aware the government is implementing new Open Banking laws that will allow them to grant more third parties access to their financial information.

    The poll also showed consumers are concerned about the management of their money and financial data, and that although the whole idea of Open Banking is to have more of that data flowing to companies outside the financial sector so they can use it as a building block for innovative consumer-led products and services, people aren’t necessarily inclined to let that happen in practice. Just 17 percent said they would be willing to share banking data with non-bank third parties—even if they would benefit as a result.

    A question of trust

    All this may seem like a pretty grim indictment of an initiative that’s less than a year away and supposedly destined to reshape the financial landscape. The data certainly indicates there’s some work to be done in terms of educating consumers about what Open Banking entails and its implications. It may even cause some bankers to throw up their hands and wonder whether the whole thing is worth the effort, or dismiss Open Banking as just another regulatory box to tick. But that would be a mistake. And here’s why.

    Australians may be deeply protective of their financial data—but they also seem to trust their with it more than anyone else. Over 80 percent of those surveyed said they would only trust their bank with their financial data, and just 20 percent said they would be open to giving that data to a -up, a large company or a retailer—again, even if there were an incentive to do so.

    Be that as it may, many of these companies will be watching Open Banking closely and looking to develop exciting new products and tools that take full advantage of the new regime. Those products and tools may run up against consumer resistance initially, but if there’s one thing consumers value as much as security, it’s convenience. This is particularly true of an emerging category of banking customer we call the ‘Nomads’: digitally savvy, demanding and accustomed to getting services on demand. These are the needs third parties will be looking to meet—and that banks themselves will increasingly have to deliver on in the future.

    The relative trust that banks enjoy—and the fact that consumers may be slow to share their data with other organisations—gives banks a solid head start in the race to innovate on the back of the data Open Banking makes available. It’s up to banks to maintain and build on that lead by quickly developing targeted, on-demand services that address real customer pain points. Failing to act on the possibilities of Open Banking will eventually result in those customers—and their data—migrating elsewhere.

    Of course, not all Open Banking-based experiments will succeed. But with other organisations trying, and change all but inevitable, a certain degree of boldness is required. Banks shouldn’t be afraid to try, test and fail. These are exciting times for the industry—even if most Australian consumers don’t know it yet.

     

    Accenture at Sibos

    We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.

     

    The post Open Banking: defining moment or doomed from the start? appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 12:18 am on August 28, 2018 Permalink | Reply
    Tags: , , , , , , , technology   

    3 Notable VC Rounds in Alternative Credit 

    funding this year has been on the rise. In the second quarter alone, funding for financial companies around the world reached $ 20.3 billion in nearly 400 deals. Right now, venture capital firms, , and investors are pouring funds into companies Artifical Intelligence, the clear flavor of the year. But AI means more than chatbots [&;]
    Bank Innovation

     
  • @fintechna 12:18 am on August 26, 2018 Permalink | Reply
    Tags: , , Chooses, , , , , technology, Unity   

    Unity Bank Chooses Finastra for New Digital Loan Product 

    Today announced a partnership with Wis.-based for a solution. Unity Bank, with $ 450 million in assets, has begun to leverage loan to streamline its commercial lending and consumer lending processes. Bank Innovation spoke with Unity Bank senior vice president and commercial lending manager Darrin Wilson on what “streamlining” will mean [&;]
    Bank Innovation

     
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