Artificial intelligence, blockchain, cloud deployment models, fintech, insurtech, regtech, robotic process automation, big data analytics, channel diversification, changing customer expectations, and an ever more detailed regulatory environment are all part of a growing list of dynamic forces transforming financial services. Each of these has the power to be disruptive on its own; combined, they guarantee change for financial services providers of all types. But these forces are not exclusive to banks and financial institutions. IT services and traditional business process outsourcing (BPO) providers are increasingly focusing on their own technology capabilities as a means of avoiding disintermediation and gaining share in a competitive field.
In this age of unending data breaches, it is not surprising that identity crimes are the biggest fraud challenges facing financial institutions (FIs). In early April alone, Saks, Lord & Taylor, and Panera Bread announced that they had data breaches that went on for months and leaked millions of records from their point-of-sale systems or websites. The faceless nature of the online and mobile channels makes authentication hard, but the massive amounts of data that have been breached in recent years combined with fraudsters’ use of phishing, social engineering, and malware make authentication much more difficult. FIs must use new techniques to ensure they know who they are dealing with in the online and mobile channels.
Next week will be my seventh time at the FinovateSpring event in Silicon Valley and the first one I’ll attend in the new four-day format. As always, I expect excellent industry networking and first-class demos of the latest technology solutions for financial services. But this year, there will be greater depth and discussion in the way of one-on-one “fireside” conversations and expert panels. Notably on Thursday, May 10th, a fintech-focused analyst expert panel will feature my fellow Aite Group retail banking analyst Tiffani Montez.
I recently had the opportunity to attend MRC Vegas 2018 for the first time in many years. When I attended Merchant Risk Council meetings in the past, I was a fraud executive with one of the largest U.S. banks. I had found MRC to be a good event for networking and gaining a better understanding of the fraud-related concerns of the bank’s commercial clients.
This was my first experience attending MRC as an industry research analyst. I cover fraud and data security issues for Aite Group; most of my coverage is from a banking perspective, but I wanted to learn more about the challenges merchants are facing in today’s environment. I also wanted to understand how merchants’ fraud and risk challenges compare with those experienced by financial institutions.
Real-time payments have existed in some other countries for several years, and they are now a reality in the United States. Many financial institutions (FIs) are offering their customers the ability to send money in real time to family and friends quickly and easily and, in many cases, without a charge. New payment types are evolving—business-to-business payments as well as person-to-business payments, business-to-person (B2P) payments, and person-to-person (P2P) payments are becoming mainstream.
Additional FIs are actively evaluating the market demand and deciding whether to offer real-time payments to their customers.