General data protection regulations (#GDPR), an EU privacy and data protection law, went live last week. The regulations seek to give citizens control over their own data and unify laws within Europe, although provisions also apply to how personal data is exported outside of Europe. These new laws will impact how #banks interact with consumers […]
Bank Innovation
When it comes to #customer satisfaction, smaller #banks do it better, according to an FIS survey released today. More than nine in 10 U.S. customers are very satisfied or extremely satisfied with their credit unions, compared with about two-thirds of consumers who use top 50 global banks. Fees incurred at larger banks may be a […]
Bank Innovation
With all the digitization efforts (PSD2 went live in January and GDPR will take effect in two days) in the banking sector, European traditional #banks still face a problem with #onboarding new retail customers: prospective customers drop out before they complete the onboarding process. The #issue has only gotten worse over the years. According to […]
Bank Innovation
Customer experience is the grand basis of competition in today’s business world. Unfortunately, most financial services institutions remain mired in manual, bespoke, paper-based processes—often siloed by customer, channel and product groups within a #bank. That is beginning to change.
RPA can reduce time to perform tasks by up to 90% and lower costs by up to 80%
A key theme from Accenture’s recent survey of 80 bank COOs in North America is the need for back-office #operations to become more digital and to act as the new front office. The survey report highlights several opportunities for #banks to improve their operations—such as re-skilling back-office workers, creating agility through digital decoupling and robotics process automation (RPA). Sixteen percent of bank COOs we polled are using RPA, while 63 percent plan to use it over the next year or are piloting the #technology. Half of those surveyed are looking towards straight-through processing and almost 75 percent have or plan to use analytics and data automation to truly unlock latent value in operations data.
This presents a unique opportunity for banks to accelerate the use of modern automation techniques given their fundamental ability to enhance the customer and employee experience.
Intelligent automation has the power to impact operations. Here are five key reasons why:
Banks should start their automation journey with the goal to look beyond cost savings. Five keys for success:
The power of RPA to invigorate bank operations is real—reducing time to perform tasks by up to 90 percent and lowering costs by up to 80 percent, by Accenture estimations. Before jumping on the bandwagon, however, business and IT must join together to strategically plan an optimal journey to an agile bank future.
Read our 2018 North America Banking Operations Survey for more insights.
The post Automating bank operations? Keep eyes wide open appeared first on Accenture Banking Blog.
Many #banks have started using artificial intelligence to enhance customer service, whether through chatbots, customer acquisition or money management capabilities. However, when it comes to using AI in the backend of banking, those capabilities remains relatively unexplored, except for the most common use cases such as security, AML, KYC or fraud. One area where AI […]
Bank Innovation
#Banks today are facing stiff competition from innovative fintechs focusing on niches in the retail banking value chain. The advent of Open Banking will also facilitate the creation of new products and services that were previously impossible to imagine.
This creation of new products and services is blurring the gaps between banks’ traditional lines of business, such as payments and #credit. Fintechs and banks see the importance of linking credit and payments, self-evident for many years with credit cards, but which is an emerging theme in payments #innovation currently.
The millennials of today are uneasy carrying credit card balances, particularly as an aftermath of the struggle with debt during the financial crisis. They lend with more certain repayment terms, which helps them fund their big-ticket as well as smaller purchases while also consolidating their debts. #Point-of-#sale lending has emerged as a new category of lending to help such consumers finance new spending and to help merchants reduce basket abandonment. By partnering with merchants and embracing digital technologies, some disruptive fintechs are competing directly with credit cards and store cards to provide customers with quick and easy short-term credit at checkout.
One such disruptive #fintech in this space is Klarna, which provides a “buy now pay later” option at the checkout. When visiting a website powered by Klarna, shoppers need to simply input their email ID and shipping address, without the need to set up an account or type in credit card information. The maximum purchase limit is different on each account and is determined by a credit assessment by Klarna. For retailers, Klarna assumes all the financial risk of encouraging shoppers to close the deal without #payment. When the online retailer ships the product, Klarna pays the merchant directly, then sends a message to the consumer allowing 14 or 30 days to pay or return the item. Shoppers can also choose to pay on monthly installments with an interest component added. Behind the scenes, Klarna does checks that quickly determine if a shopper is a legitimate person and has good credit based on his or her email and shipping address.
Other companies in this space, like PayPal credit (formerly known as Bill me Later), have been steadily growing since 2008; PayPal credit offers a digital reusable line of credit to shop anywhere PayPal is accepted. Customers get up to six months to pay on purchases of $ 99 or more. Another player in this space is Affirm, which is also partnering with merchants to offer payment options, including financing as an alternative to credit cards.
Payments systems, like those offered by these players, are growing, are profitable and are encroaching more and more on traditional banking systems. The primary benefit of such a service is that removal of the payment step greatly reduces friction and shopping cart abandonment in the checkout process. The model proves to be a win-win for the customer and the retailer alike. The granting of a banking license to Klarna has enabled the fintech to move into ‘big bank’ territory and start offering its customers a larger range of financial services.
Banks such as Wells Fargo and Citigroup have been big players in point-of-sale loans historically—but these types of loans are now becoming increasingly popular. This is due to the advent of #technology that enables merchants to offer the option of a loan at the moment of purchase, where they may have previously only accepted cash or credit cards. Of late, consumer loan growth has become a top priority for banks to diversify their loan books, which historically have been over-burdened with commercial loan portfolios.
Some banks have taken the route of partnering with fintechs to have their share in the POS lending scene—e.g. banks like SunTrust, Regions Financial Corp, Fifth Third Bancorp, etc. have been offering their loans through GreenSky, a fintech which enables merchants selling furniture, home improvement and medical firms to provide POS credit to their customers. GreenSky provides loans—from $ 5,000 to $ 55,000—which are funded in minutes by any of the banks in their network.
POS lending provides the much-needed portfolio diversification which banks need in their books. Burgeoning fintechs in this space are claiming their share of these loans from customers—and banks need to ensure they have their own plans in place to either partner with them, or speed up their digital innovation processes to get their fair share of the POS lending market. With the advent of technology and regulations aimed at removing friction in the customer journey, the linkage between payments and credit are strengthening like never before, and banks need to have their strategies ready to retain their dominant foothold in this space.
The post Payment innovation extends the marketplace for credit at the point of sale appeared first on Accenture Banking Blog.
#Conversational #banking is in the spotlight. Google’s recent voice demo with Google Assistant has led many to look for — or create — an equivalent in the banking industry. Some larger #banks are trying. Bank of America is in the middle of rolling out its AI-driven virtual assistant Erica in stages across the country; Capital One has […]
Bank Innovation
On 13th January 2018, the second Payment Services Directive (#PSD2) came into force, defining a new chapter in the European payments market. It requires #banks to open their systems to third parties and provide interfaces to them to initiate payments on accounts, retrieve account information and a confirmation of availability of funds on accounts. Application programming interfaces (#APIs) play a vital role and standardized APIs are required to avoid fragmentation in the European market, and promote the digital ecosystem. PSD2 does not come with an API standardization. To help fill this gap, the Berlin Group—consisting of almost 40 banks, associations and PSPs from across the EU—has defined a common API standard called “NextGenPSD2”, which provides guidelines to reduces XS2A complexity. It is ready to be used by banks and TPPs for implementing PSD2-required bank account access.
Berlin Group’s NextGenPSD2 is the leading API framework that helps banks to #build API standards. Since NextGenPSD2 does not specify one single API standard, banks #should follow basic principles of API design and build API standards that are state of the art:
Time is short. By 14th September 2019, banks are mandated to be RTS-compliant and even make APIs available for testing and piloting six months before the market launch. Having the optimal APIs in place that follow best practice principles will be crucial for banks’ “#Beyond PSD2” open banking strategy.
Have a look at my complete blog and share your views.
The post How banks should act now to build state-of-the-art APIs for PSD2 and beyond appeared first on Accenture Banking Blog.
#Cryptocurrency is going mainstream, or rather, #banks and cryptocurrency exchanges are growing #more enmeshed. Jamie Dimon and Warren Buffett may still think #bitcoin is a Ponzi scheme, but in the meantime, Goldman Sachs has reportedly opened a crypto trading operation, apparently a first for the banking industry, and #Coinbase, the market-leading wallet and exchange, is […]
Bank Innovation
Even more than winning on mobile, #banks would like to minimize security threats. Banks lost $ 16.8 billion to fraudsters last year, according to a Javelin report, and the number of U.S. customers victimized by such attacks increased to 16.7 million, up from 15.4 million in 2016. Protecting customers is paramount for executives. A global study […]
Bank Innovation
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