EXCLUSIVE – When The Clearing House (TCH) rolled out #realtime #payments last November, one would think #banks would quickly jump on that bandwagon, right? Wrong, according Vinay Prabhakar, head of markets strategy, Payments at Finastra. The problem, as it often is with big institutions, comes down to the bottom line. “We are all used to […]
Bank Innovation
Today, #Open Banking is gaining traction globally, through a combination of #banks’ internal efforts, market initiatives, and regulations like the EU’s #PSD2 and the UK’s CMA Open Banking. Now #Hong #Kong has also gotten on board, with the Hong Kong Monetary Authority (HKMA)’s launch of its draft Open API #framework.
Publication of the framework on January 11, 2018 marked the start of a public consultation that will run until March 15, 2018. Responses will feed into a final version that will be binding for the territory’s largest retail banks, although other banks will be able to join in the future.
One of the most interesting aspects of the HKMA’s framework is the splitting of use cases into four phases with different product categories and timelines:
Product and Service Information: Third-Party Providers (TPP)’s access to banks’ products information, which is frequently used by customers on a ‘read-only’ basis and thus helping financial product comparison sites. Banks will be expected to implement these APIs within six months of the framework’s finalization.
Customer Acquisition/New Applications: Customer acquisition via TPPs and through online applications for credit cards, loans and some insurance products. Banks will be expected to implement this within twelve months of finalization.
Account Information: Retrieval of both stand-alone and aggregated account information. It would help TPP services that aggregate multiple accounts or perform analytics to gain customer insights. The timeline for this phase will be discussed later between HKMA and the banks.
Transaction Processing: Enabling TPPs to communicate customers’ payment instructions to banks. Again, the timeline will be discussed later between HKMA and the banks.
Comparing the HKMA’s framework with the Regulatory Technical Standards (RTS) for strong customer authentication (SCA) under PSD2, one of the biggest differences is that the HKMA’s draft is a mixture of a regulatory paper with some initial timelines, recommendations on specific protocols and data formats, and high-level specifications for each product category. PSD2 is #technology-agnostic and does not define any API standards, with other initiatives like Berlin Group and STET stepping in to fill this gap.
While HKMA Open API was inspired by Open Banking and PSD2, its approach is visionary—and in many ways, unique. It remains clear that a single API standard is vital for any economy to attract global innovation and avoid fragmentation. This is a lesson that HKMA is well-placed to take on board.
My thanks to Hakan Eroglu for his research and analysis for this blog.
The post A summary of the new Open API framework in Hong Kong, and how it compares with PSD2 appeared first on Accenture Banking Blog.
EXCLUSIVE- #Cryptocurrency is not having a great year. And while many institutions (including big #banks) have distanced themselves from the phenomenon, roboadvisors in the country remain divided in their opinion on cryptocurrency as an investment. Take New York-based financial adviser Betterment, for instance. The company’s CEO Jon Stein told Bank Innovation that while he is […]
Bank Innovation
EXCLUSIVE—Consumers are impatient, and growing less and less inclined to fill out the long forms necessary to apply for a loan, mortgage, or other financial #service. This is why #banks #need to use #their treasure troves of data to make sure they don’t need to, Andy Hernandez, executive vice president and head of digital banking […]
Bank Innovation
#Banks #need to update their legacy systems and modernize their #technology, no surprise there. But just how many operational leaders at banks think their institution’s survival depends on it? That would be 79% of operations leaders in North America banks, according to a recent report by Accenture. That’s four out of five banks. The report […]
Bank Innovation
Add #HSBC to list of major #banks that have partnered with #payments company #PayPal. Today, HSBC announced that as a result of its partnership PayPal, the bank will now let its global #corporate customers make payments to beneficiaries using their PayPal accounts. In a statement released today, Tom Halpin, global head of payments in global […]
Bank Innovation
Real-time #payments depends on network effects — if a large corporate bank is real-time but his supplier’s isn’t, the process still goes slowly. FIS and TCH are piloting an #incubator to begin testing.
Financial Technology
Overdraft #fees and checking account minimums discourage the #poor from using #banks; #pawn #shops are an alternative to payday lenders.
Financial Technology
As the cliché goes, if you’ve grown tired of the current #banking and #risk climate, give it a few minutes. It’s bound to change.
By the 2020s, Accenture predicts current banking business models to be swept away by a tide of ever-evolving #technology and other rapidly occurring changes. The risk #management function is sure to be pressed to evolve in parallel and it is, according to our 2017 Global Risk Management Study.
In this blog series on banking risk management, I will offer Accenture’s perspective of the changes that have already happened, and those yet to come. I will start with an overview of nearly a decade of risk #challenges facing #banks, and then take a deeper look at the fresh challenges facing banking risk leaders today.
We’ve been studying risk management across financial services—as well as in banking—since our first study debuted in 2009. Then, banking risk managers were reacting to the global crisis, grappled with siloed organizations, with technology not fit for purpose and a shortage in risk resources.
Since then, banking risk leaders have made significant, admirable gains. Moving past the global economic crisis, by 2013 risk leaders began having a direct line to the CEO, even taking a “seat at the table” by 2015.
Meanwhile, pressure mounts with rapidly increasing data volumes and requirements, and organizational analytic capabilities require constant upgrading. Likewise, digital data management and data analysis skills are more in demand than ever, adding to the ongoing talent squeeze.
Our 2017 Global Risk Management Study findings illustrate the rapid pace of change across banking and the risk function, both driven by digital change, digital capabilities and digital competitors. Alongside this change, challenges similar to those from 2009 #remain (see Figure 1). Banks face increasing business pressure to integrate risk and finance functions. They still struggle with talent shortages. From a technology standpoint, change is ongoing, but banks are stretching to use new technology (such as automation and cognitive computing) to full potential.
Additionally, risk managers continue to face conduct risk, reputational risk and strategic risk challenges. Other new risks are still emerging, such as model risk, cyber risk and contagion risk. Complicating matters, the 2017 study finds banking risk leaders facing the #same expectations as their bank peers in terms of driving efficiency and wisely selecting the right people, technology and partnerships to get work done.
In the midst of—and to address—these challenges, banks are in varying stages of experimentation and adoption with cloud, analytics, automation and artificial intelligence. These technologies offer promise, both in terms of innovative, sleek solutions and substantial cost and efficiency gains. Can these technologies deliver beyond their promise?
Our study finds the time for modest change or incremental fixes has passed. True, we might have predicted the steady growth of technologies such as cloud, artificial intelligence and analytics, but the competitive shifts are less expected, and new non-financial risks are a bit of a surprise. But the biggest surprise is the pace of change: more rapid than we might have expected.
What can help banking risk leaders keep pace with constant and rapid change, and fend off new traditional and non-bank competitors? It’s time to innovate. Banking risk leaders may want to carve out a core, proactive strategy that can build risk capabilities overall—now and in an ever-changing future.
Figure 1: Evolution of Risk Management. For more details, view our interactive timeline.
Please join me in my blogs as I share my thoughts on how risk teams can become key organizational leaders by adopting smart technologies, playing the role of integrators of risk within the wider business, and layering existing risk talent to be multi-disciplinarian players and drivers of business value.
The post Banking risk management is changing—but some challenges remain the same appeared first on Accenture Banking Blog.
#Banks can improve their marketing if they use mobile #phone location data to better understand their customers.
Financial Technology
Reply