Latest reports and research: Finextra Research

Report

Fintech, ESG and IFCs: Embedding Sustainable Business Models

A Finextra Research Impact Study in association with Jersey Finance. While the landscape for financial services is currently being re-shaped by the twin trends of digital technology and the rapid rise of sustainable finance, leading international finance centres (IFCs), always nimble and adaptable, are seizing on the opportunities. Close analysis of these trends highlights an even more significant intersection at play with both these mega trends converging symbiotically, leading to fintech playing a part in the scaling up of sustainable finance, while the latter in turn accelerates innovation in fintech. Adoption of AI is improving the ability of financial service providers in leading jurisdictions, such as Jersey, to meet compliance needs, while also driving down process costs that might act as a barrier to sustainable finance. Equally, the growth in sustainable finance leads to greater demands for fintech solutions, adapted to the specific needs of IFCs. Evidence of these major trends and their impact on IFCs are included in the findings of this latest Finextra report, a study which Jersey Finance is pleased to support. As an IFC facilitating cross-border investment through our expertise in areas such as fund governance, fiduciary and administration for private wealth, we are focussed on enhancing our capabilities in the digital space, while sustainability is already integrated into our core offering. Furthermore, this symbiotic convergence is becoming a notable factor in firms’ service delivery within Jersey’s financial ecosystem. Firms such as Apex and IQEQ are tailoring their fund solutions to include new data-driven propositions, developing new tools that deploy the latest technologies to collect, evaluate and report ESG data. Sustainable finance solutions like this are seeing strong take-up by managers, keen to meet both the growing investor demands for transparency on the impact of their portfolios and to streamline their regulatory compliance under emerging frameworks, such as the EU’s Sustainable Finance Disclosure Regulations (SFDR). It’s clear IFCs have a vital role to play during this global transition and leading jurisdictions such as Jersey, with long standing expertise in supporting cross-border capital flows and a flourishing fintech cluster, can call upon both these strengths as we gravitate to a more sustainable future. Download your copy of the paper below to learn more.

06 May 2021 292 downloads

Report

The Cloud-native journey - Why Hybrid Cloud and Open Source go hand-in-hand

The financial services industry has been turning to cloud services and technology in droves to accommodate the pressures, security demands and cost savings of digital transformation projects, as well as regulatory compliance priorities. To become and remain agile, financial organisations must move beyond legacy practices, particularly when the speed of change in the industry is at such an all-time high and accelerating. Variants in cloud technology have quickly emerged leaving financial services organisations with choices far beyond mere public cloud solutions. Security and availability demands have led many institutions to continue to rely on private cloud deployments- those within the organisation’s security perimeter or firewall. While at the same time, managed cloud services and Software-as-a-Service options have increased the number of public clouds organisations are using. Other factors such as regulatory requirements mean financial services firms need to not only keep certain data within a certain geographical location but also should review the risk associated with relying on only a single cloud provider. Compounding the regulatory challenges, the advancements and innovations around 5G and IoT are leading to new levels of edge computing, with corresponding cloud requirements. As a result of this proliferation and the arising complexity from multiple clouds, as well as the need to have enterprise-wide management thereof, banks and FIs have needed to move away from a single cloud strategy and utilise a hybrid cloud and platform approach and a cloud-native mindset. From a business, security, risk and operational standpoint, the stakes have simply become too high not to be hybrid. Download your copy of this Finextra white paper, produced in association with Red Hat, to learn more.

19 April 2021 321 downloads

Report

Sustainable Finance Live - Reimagining Risk Modelling ESG Solutions

A Visual Record from the Sustainable Finance Live workshops 8-9 December 2020. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event focused on real-time forward-looking measurement of climate change and nature loss to address transitional and physical risk, following a lean back, lean in and learn by doing model. The workshop detailed how alternative data from sources such as satellites and sensors can augment traditional risk systems and provide insights for the future of sustainable financing. Diving deep into the practical challenges of risk management, the sessions considered using alternative data to inform credit decisions, with speakers providing advice on how to embrace sustainable finance. The interactive forum welcomed a set of cross-functional skills from individuals spanning the technology, business and finance sectors. Initially taking a generalised approach to understand reporting across ESG finance sectors, it became apparent that specific use cases were needed. Richard Peers, founder of ResponsibleRisk and contributing editor for Finextra Research, outlined the key questions for the event: What are the issues and opportunities for risk management working with alternative data to inform credit decisions? How can these decisions be quantified against physical and transition risk? With a top-down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: Using alternative data to inform physical and transition risk How satellite and sensor data can provide insights for investment and governance professionals Plotting the steps to resolution of existing problems and mainstream use of data Identifying how to prevent lack of proper pricing of ESG risk Download the full report below to find out more.

16 April 2021 72 downloads

Report

Adapting to a shifting Cards Landscape

Identifying opportunities for Issuers. The payment cards industry has changed dramatically in recent years, with new technologies and regulations spurring innovation and lowering the barriers to entry for issuers. Meanwhile, there has been a shift to digital payments, which has created opportunities for bank and non-bank issuers alike. Card payment volumes have been growing, and the world’s standout region is Asia Pacific. China is the star performer, and the number of cards in issue is staggering. And while digital wallets such as Alipay and WeChat Pay have pushed the growth of mobile payments in China, cards have a key role to play. Similarly, in Africa, where mobile money services like mPesa have been hugely popular, there is still a role for payment cards in the rapidly developing markets. Cards are also in demand in other regions. In Europe, the most recent figures from the European Central Bank show an increase in the number of payment cards issued. So far, there has been a reported shift to digital payments in various markets, such as the Middle East, and even the least internet-savvy consumers have changed their spending habits and are now shopping online. In the physical world, contactless - both on smartphones and cards - has been successful in providing convenience for cardholders in stores. Additional innovations have attempted to make it even easier for customers to tap and go. Card programmes have become increasingly cost-effective, especially for issuers who are unencumbered by legacy systems. With on-demand digital printing, for example, cards can be personalised and issuers can order a smaller print run for smaller customer segments as they are needed – such as fans of a football club – rather than committing to a large batch upfront. Download your copy of this Finextra white paper, produced in association with FIS, to learn more.

14 April 2021 626 downloads

Report

Industry Spotlight - Real Time Intraday Liquidity Management

This piece from Finextra, in association with Montran, shines a light on an increasingly dynamic industry focus- the importance of intraday liquidity management- and the benefits to banks who tackle this head on. Finextra interviewed Joost Bergen, Cash Dynamics, liquidity management specialist and industry speaker about a real time and technology-first approach to the challenge. Read the associated white paper here - Liquidity and Beyond: Building a future through certainty

29 March 2021 181 downloads

Report

The Future of Cloud 2021

Evolving the Financial Services Industry. As consumers have come to expect the same experience of their financial services providers that they have elsewhere in their lives, traditional financial institutions (FIs) are increasingly looking for ways to improve customer service and deepen engagement. For many, optimising the digital experience for customers is a priority. From leveraging omni-channel communication strategies to creating more personalised experiences, the goal is to deliver the right message, at the right time, in the right channel. Fintech firms have been faster to innovate. Many, in fact, were created to address consumer dissatisfaction with traditional financial services providers. However, many players across the banking, payments and capital markets industries such as Barclays, Broadridge, Capgemini, Calypso, Collibra, DBS, FICO, Fraud.net, Global Payments, HSBC, IHS Markit, Kx, Mambu, Nasdaq, Numerix, OakNorth, Singapore Exchange, Solarisbank, Standard Chartered and Trading Technologies are increasingly turning to the cloud as a way to accelerate their digital transformation for customers. Shifting away from legacy infrastructure reduces time and resource constraints and financial institutions can innovate and respond to customer needs with the cloud. Banks, payments services providers, and capital markets firms must take advantage of the cloud’s greater elasticity, flexibility and cost-effectiveness. Download your copy of the report below to learn more. Part of the Finextra Cloud Series, in association with Amazon Web Services (AWS).

26 March 2021 850 downloads

Report

Corporate Onboarding: Will it become a competitive differentiator for banks in a real time world?

The way in which banks onboard corporate clients can impact many aspects of their business, from reducing time to revenue, to improving customer experience and loyalty, and to compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. The accuracy of data used for onboarding customers is therefore a key differentiator for banks. Relying on primary source data that is legally compliant contributes to compliance peace of mind, while banks can make better decisions based on compliant data that is 100% accurate and continuously updated. This is particularly important in the world of corporate onboarding, where vetting a company can be time and resource heavy, and a complex task with many moving parts. Accessing regulated and authoritative data from company registries to onboard a client in a timely manner is a complicated process that involves a series of manual checks. There are continual updates to regulations to comply with, such as the requirement for ongoing monitoring within the 5th Anti-Money Laundering Directive (5AMLD) as well as due diligence in ensuring that company data for KYC checks is up to date and accurate. From a business perspective, banks are keen to onboard new customers as quickly as possible to maximise income and profit. An efficient process can also be a crucial differentiator in procuring loyal clients for a lifetime of service. Expectations for a real-time experience are growing in the corporate environment, just as they have in the world of retail and consumer banking. This white paper explores how banks can deal with changing KYC regulations and the incoming 6AMLD; what technology can be utilised to assist banks achieve seamless corporate onboarding; and what stands to be lost, and more significantly, to be gained, with a seamless real-time onboarding experience. Download your copy of this Finextra white paper, produced in association with Kyckr, to learn more.

16 March 2021 758 downloads

Report

Cut through the noise: 5 key considerations when selecting your payments platform

A Finextra Research Impact Study in Association with Compass Plus. Identifying and working alongside technology vendors has never been higher on the agenda. A 2020 Lloyds Bank survey found that 88% of senior leaders within financial institutions say that tech investment will be a top strategic priority for the next 12 months, and that 62% plan to increase investment in technology and core systems. Organisations across the payments industry are facing unparalleled pressure to digitally evolve. For incumbents this is a result of everchanging customer expectations and demand for digital. These factors cause financial institutions (FIs) to look to the crowded market of technology vendors to help future-proof their business. Vendors trying to differentiate themselves in this crowded market often use convoluted tech-spin to try and attract new clients. This can make it difficult for FIs to identify which vendor, platform or service is best suited to their needs and may end up being led in the wrong direction. While FIs are facing immense pressure to evolve quickly, selecting the right vendor is a process which should not be rushed into. Financial institutions must be cautious when considering potential technology vendors by cutting through marketing vernacular to build a clear understanding of the platform’s capabilities. This impact study sets out the key considerations FIs must make to effectively deploy their strategy. From avoiding outdated assumptions, outlining clear objectives, steering clear of industry buzzwords, to asking the right questions, these fundamental tools will only assist financial organisations in their journey to enhance or transform their digital offering. Download your copy of the paper below to learn more.

09 March 2021 490 downloads

Report

The Future of Regulation 2021

Resetting the rulebook for 2021 2020 was a year of rule-breaking, 2021 is the year to reset the rulebook. Unable to grow unchecked, the regulatory framework within which innovation has been trying to flourish has shown its creaky joints, ill-equipped supervisory mechanisms and outdated mindsets. Yet, despite early concerns and predictions that Covid-19 would hinder progress across the payments landscape, the monumental shift toward reliance on digital payments has instead lit a fire under financial institutions and the regulators which oversee them. The pandemic presented unmatched challenges to the global economy, including the provision and regulation of digital financial services and fintech activities across both advanced and emerging economies, but innovators were quick to pick up the reins, and presided over a proliferation of tools and products catering to those most in need. Open banking continues to evolve, and as Open X takes hold, the obligation to place consumer protection at the heart of this growth is evidenced in the implementation of the Second Payments Services Directive’s (PSD2) requirement for Strong Customer Authentication (SCA). While financial services remain challenged with ever more malicious cyber threats, AML and fraud regulations are clamping down on crime. The deployment of sophisticated technology is also increasingly being used to identify and quash threat-actors, and particularly in the case of LIBOR’s cessation and ESG objectives. Delving into the key industry-shaping regulatory updates for 2021, the Future of Regulation sets out the insights of leading industry players including Accenture, Clifford Chance, JP Morgan, Mollie, NatWest, Oaknorth Bank, Shearman & Sterling and TrueLayer. Download your copy of the report below now to find out more.

08 February 2021 838 downloads

Report

Solving onboarding - The catalyst in creating a unique end-to-end client relationship

Financial services firms are on a digital journey across the globe, and some parts of this journey have been more seamless than others. Firms are increasingly aware that streamlined, pain-free onboarding builds the foundation for a successful client experience throughout the duration of a client’s lifecycle. Primarily, a digital experience adds convenience and competitive service for the client. Despite ranking highly on the agenda for all financial institutions, not all firms have been able to achieve a fully digital onboarding process. A ‘userfriendly and frictionless’ onboarding experience may be the ideal, but it means overcoming great technological, infrastructural, cultural, regulatory and commercial hurdles to achieve it. This research report by Finextra, in association with Box, is based on several leading industry voices on the subject to explore the current status of onboarding digitisation journeys. Experts share their insight on the current status of onboarding projects and why the need to evolve is more important than ever. The paper explores how onboarding pain points are increasingly frustrating digitally-native clients, the role that data and information management play in meeting smooth onboarding goals, and efforts being made towards what the industry describes as onboarding nirvana, based on a 360-degree view of the client. Download your copy of the Finextra industry sentiment report to learn more.

27 January 2021 766 downloads

Report

What will drive the journey towards cashlessness and digitalisation?

Market dynamics and infrastructure vary greatly per country and region but the direction of innovation and change are converging on the same outcome: digitisation and cashlessness. As the world adopts digitalisation in all sectors and societies, there is greater demand for unbanked communities to be banked and for digital banking to enable better choice and control for consumers, greater opportunities for merchants and businesses, increased cross-border trade and benefits for governments. The reasons for the transition away from cash and towards digital include enabling connections between unbanked consumers, merchants and services through mobile money; greater visibility and view on liquidity for merchants, including real time confirmation and settlement; reduction in fraud and crime by implementing a digital trace and, hence, audit system; financial inclusion; for banks, greater volumes and transactions are welcomed also. System integration and standardisation are the crucial factors on this journey to grow the ecosystem and the key tenets of interoperability and ubiquity, each of which drives the other, are becoming the focus for any serious mobile money or digital financial provider. QR codes have been instrumental across the Middle East, Africa and Asia to facilitate mobile and digital payment services and they could provide a gateway to unified and integrated financial offerings, countrywide, regionwide and even worldwide. As digital payments become pervasive, API infrastructures are providing the basis for interoperable systems, but these can be supported also by third party aggregators or, often in developed markets, switch technology. The expansion of API infrastructure and the proliferated services it enables depends on standardised and harmonised interaction and integration, as well as collaboration between private and public firms. Download your copy of this Finextra white paper, produced in association with HPS, to learn more.

18 January 2021 657 downloads

Report

Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies

A Finextra Research Impact Study in Association with Global Payments and Amazon Web Services (AWS). Consumer expectations, behaviour and payment preferences are and will continue to evolve at an accelerated rate. As a result, payments processors and issuing banks must ensure they are technology-enabled and software-driven so that the financial products and services they provide are future-proofed, ready for today and tomorrow. In an attempt to keep pace with competitors, banks must recognise that collaboration between payment players and cloud service providers will help drive frictionless, more secure digital experiences for consumers. This is of paramount importance in a world where resilient commerce through contactless interactions – at scale – is key. However, some institutions are still offering traditional premise-bound services and aren’t taking advantage of the innovative technologies available in market today. In order to remain relevant, these organisations must be flexible, accelerate speed to market and provide best-in-class experiences for their customers. According to a McKinsey survey, banks that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversation rates and growth by 20%. From extending their footprint into new products, services and markets, to innovating and creating next generation, digital focused banking solutions, the goal for financial institutions is to meet the demands of the connected, digital world and keep pace with ever-changing consumers’ preferences. Against a backdrop of new payments startups, legacy players don’t have the benefit of starting from scratch but do have the advantage of a large customer base. While cloud technology can support digital transformation, financial institutions, retailers and new market entrants will also realise the benefits of a collaboration between the likes of Global Payments and AWS and how it will lead to more secure, reliable and innovative solutions for the payments industry at scale. Download your copy of the Impact Study below to learn more.

07 January 2021 559 downloads

Report

The Future of ESGTech 2020

Finding value in the data web of sustainable finance. While environmental, social and corporate governance considerations have always been a matter of importance for financial institutions, there is now greater scrutiny than ever of the ESG impact of assets, investments and lending. The adoption of United Nations’ 17 Sustainable Development Goals (SDGs) in 2015 formed a framework for sustainability in the global economy, setting out aims to reduce poverty and hunger, promote good health, wellbeing and education and protect biodiversity and the climate. SDGs do however present complexities given their wide scope and the difficulties in addressing them in equal measure. Additionally, new and different public pressures can develop such that the priorities of businesses and economies are forced to pivot as the global backdrop does. It has been commonplace in recent years, for example, for the World Health Organisation to label climate change the greatest risk to human health around the world. This now seems a debatable summation given the events of 2020, and it is likely that the threat of pandemics and poor health will receive greater attention in the years ahead. The benefits for financial institutions of undertaking ESG-driven activity are well understood but remain clouded in uncertainty due to unknown risk and reward. They, therefore, need practical solutions to work to sustainable goals that can help to bring returns while also delivering positive environmental and social impact. Initiatives that enable this are emerging in the worlds of innovation and technology that harness the data that financial institutions have at their disposal to deliver additional value for clients and stay relevant in a constantly evolving space. However, there remain many unanswered questions about the standardisation of data to make it digestible for firms across the industry, how the user experience of reported data can be transformed to improve knowledge of risks and opportunities and what role technologies such as AI and blockchain can play. This report sets out to answer those questions. Finextra Research has combined opinions and commentary from sustainability experts at Citi, Standard Chartered, BNY Mellon, Moody’s, HSBC, Latham & Watkins, Tandem Bank, and BBVA with original insights and analysis to explore the tools and processes that can assist organisations in developing their ESG offering and driving growth through meeting sustainable goals in the years ahead. Download your copy of the report below now to find out more.

21 December 2020 426 downloads

Report

Liquidity and Beyond: Building a future through certainty

Creating a strategic advantage. There is an evolving approach to liquidity management: from merely monitoring, to actively managing and optimising, to using liquidity for a strategic advantage. Achieving this requires the right tools and technology, and also an open mind about the opportunities that effective real time liquidity management can bring. Seconds, minutes or hours – whatever the definition of ‘real time’ in real time liquidity management, its speed is definitely increasing. Banks and corporates are operating in an increasingly dynamic environment: consumers want services on-demand; payments are faster; information travels at warp speed, news is rolling 24/7; and crises can unfold in an instant. This always-on environment has an impact on liquidity, which has to be managed effectively to ensure an organisation can meet its obligations; in times of stress, it can be critical for its survival. Having the right information at their fingertips – in real time – gives bank and corporate treasurers accuracy and assurance in navigating this changing environment. And if liquidity management is done well, they will do more than keep pace with their environment – they will use it to their advantage. The right analysis of information in real time brings better understanding of their customer, their business, the potential to reduce costs and hence, greater potential for planning and growth based on new levels of certainty. The possibilities and potential that the business concept of real time can bring, in conjunction with up-to-the-minute use of advanced technology, is staggering. Businesses and banks were not built to operate in a 24/7 environment, and it is no mean feat to step up to the plate to meet this challenge and turn it into potential. Real time automatic payments, settlement, account updates, exception handling and data sharing can eliminate the need for cash buffers- idle cash becomes investment. Real time can bolster banks’ credit ratings; real time analysis predicts behaviours leading to reduced risk; real time can provide instant forecasting adjustments- further finetuning an organisation’s position. It feeds a 360 view on a client, fostering better relationships, and with agile systems, enables a firm to plan and grow with a certainty hitherto never seen. Now is the time for banks and corporates to act, redefining their business goals, and crucially, their technology requirements. Download your copy of this Finextra white paper, produced in association with Montran, to learn more. Read the associated Industry Spotlight here - Real Time Intraday Liquidity Management.

17 December 2020 426 downloads

Report

Managing Compliance and Growth

For banks large and small there is no question about the sheer volume of transformation pressure currently at play. Regulatory changes on the increase, various migration deadlines to implement amid the general shift to real time means that mere survival in itself can seem like a win. More is required of organisations who want to differentiate and compete for and retain the customer’s attention. When risk awareness plays a crucial role how can banks start to carve a safe and secure route to innovation at a speed which meets market demand for new and intuitive services? For smaller and newer organisations, arguably it is easier when they don’t have legacy constraints and are more attuned to the benefits and possibilities of emerging technologies. But as they strive to diversify and grow their volumes, they are often blindsided by the associated risk and indeed the threat of suffocating a start-up culture. Becoming consumed by the here and now and not being able to see the woods for the trees is an all-too-familiar theme for many medium-sized banks. Being able to establish and refine their own agile way of working so they can learn fast and grow fast is key. But when one size does not fit all in terms of scaling projects, it becomes very difficult to take the reins on their own unique journey of growth. This research paper by Finextra, produced in association with Finastra, is based on several interviews with small and medium-sized banks, garnering their perspectives and experiences in their efforts to grow and scale while managing compliance and all that goes with it. Download your copy of the Finextra industry sentiment report to learn more.

14 December 2020 357 downloads