For complex customer relationship management (CRM) #Thomson #Reuters Financial and Risk, now known as Refinitiv, has partnered with #Squirro to make better use of the multiple CRM systems that #wealth #managers and #commercial #bankers often have to rely on.
Financial Technology
Following the rollout of #Open #Banking regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable #banks to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.
#Singapore’s approach has matured rapidly to make the city one of the leading jurisdictions for Open Banking in the region. The groundwork was done as early as 2014, under the government’s Smart Nation Singapore initiative to drive the adoption of new digital technologies, starting with open data and payments.
In November 2016 the Monetary Authority of Singapore (MAS), in collaboration with the Association of Banks in Singapore (ABS), published a comprehensive roadmap—Finance-as-a-Service: API Playbook—which, in effect, set the gold standard for regulatory advice on the topic in Asia. The playbook set out a comprehensive framework that introduced governance, implementation, use cases and design principles for application programming interfaces (APIs), together with a list of over 400 recommended APIs and over 5,600 processes for their development.
In May 2017 MAS, the International Finance Corporation and the ASEAN Bankers Association launched the ASEAN #Fintech Innovation Network. AFIN aims to accelerate financial sector development, boost access to finance, improve the customisability of products and reduce banking costs in the region. AFIN is scheduled to launch their Industry Sandbox, which will sit between banks and fintechs, in late 2018. This interoperable and scalable infrastructure will act as a method to standardise banking infrastructure and data while also allowing institutions to test applications.
The launch in September 2017 of the Network for Electronic Transfers (NETS) nationwide payments service, including the NETSPay eWallet, was another major milestone. Also in late 2017, the government built an API Exchange (APEX) to serve as a centralised data-sharing platform, which allows government agencies across the city to share data securely through APIs. It has also established a Financial Industry API Register, updated semi-annually, which tracks APIs by functional category as they are launched.
The approach of Singapore’s authorities to Open Banking has been characterised by a willingness to shape innovation with a comprehensive, non-mandatory regulation and governance framework; to lead by example by opening their own data for APIs, and to establish scalable data practices and a payments infrastructure that underpin innovation in the area. MAS officials have preferred not to force the issue and to approach the development of Open Banking services in an organic fashion, according to comments made in recent media interviews. There is no specific timeline mandated for compliance or adoption.
The reason for the regulatory light touch is principally because banks in Singapore see the opportunities of the #technology and are already keenly pursuing them, with competition driving innovation.
DBS, for instance, launched an Innovation Plan in mid-2015 that had over 1,000 experiments in APIs, cloud computing, microservice architecture and Machine Learning. In May 2016, OCBC Bank launched the first open API developer platform in Asia, Connect2OCBC. CitiBank’s Global Developer Hub opened its first platform in Singapore in late 2016; Standard Chartered did so in early 2017, and DBS in November that year launched an API platform with more than 20 categories and 155 functions. More recently UOB announced plans to launch an open, digital-only bank.
So far these efforts have been characterised by a focus on retail opportunities, with competition driving banks to move quickly and establish large API platforms while also releasing novel products that showcase Open Banking capabilities.
Many banks in Singapore, unlike elsewhere in the region, have partnered with fintechs and developers to launch applications that use their publicly available APIs. One example is Standard Chartered’s The Good Life service, which provides its Singapore customers with an ecosystem of merchants that offer deals, alternative payment methods and reward-point options. UOB, by contrast, has been more selective: instead of launching a public developer platform, it has selected specific fintechs and launched applications that leverage their APIs.
Banks in Singapore have monetised their APIs through a combination of private partnerships with third-party platforms, predetermined pricing models (including subscriptions, per-call and flat-rate charges) and also pricing models determined by sales functions.
There are risks in Singapore’s approach: Without enforced compliance, API standardisation across the country is difficult. There is also uncertainty around when the MAS will impose regulation.
Nevertheless, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.
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 The brave new world of Open Banking in APAC: Singapore appeared first on Accenture Banking Blog.
#Salesforce has expanded its #financial #services offering to support front line employees such as wealth managers and insurance agents.
Financial Technology
#DTCC knows the markets have #risks, but it doesn’t expect history to repeat itself, so it surveys the horizon for potential problems.
Financial Technology
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 #Payments practice. After more than 30 years in financial services—much of it working with companies across the #retail 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 #market dynamics is creating a new future for retail payments with digital payments at the core.
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 #technology 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.
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.
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.
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
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.
Asset back #securities is ripe for #blockchain with just a few #banks active in the market and outdated #record-keeping on paper and Excel.
Financial Technology
Gone is the #world where a watch just keeps time and a refrigerator simply preserves food. From wearables and smart speakers to smart appliances, connected cars and #beyond, 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 #technology 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, #blockchain/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
Jeff Crawford, Senior Manager, Payments
The post Beyond plastic: Payments in a connected world appeared first on Accenture Banking Blog.
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 #technology, 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 #payments 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.
Casey Merolla, Senior Manager, Payments
The post Chasing ever-shifting payments fraud appeared first on Accenture Banking Blog.
#JPMorgan #Chase is on a roll with its digital hiring and currently has #more #than 2,000 #open positions. The bank is looking for a senior digital #fintech expert to join its Digital Strategy, Innovation and Partnerships team, as it continues to recruit talent as part of its effort to revamp its #technology team. Last week, Adam K, […]
Bank Innovation
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.
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 #technology 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:
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.
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.
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.
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.
Dan Kreis, Industry Senior Principal, Payments
The post Delinquent debt collections in the &8220;New&8221; appeared first on Accenture Banking Blog.
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