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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The following is a sponsored blog post from Finastra.
Post-pandemic recoveries stalled by rocketing energy prices are leading to calls for stalling a green transition that has already begun. But the costs to businesses due to climate-related weather events within the next four years will be over $1 trillion.
Investors and financial institutions are increasingly applying non-financial factors (Environmental, Social, and Governance) as part of their analysis process to identify material risks and growth opportunities. Also, there is a high interest coming from consumers in the sustainability of businesses and how they impact the environment.
But because of the broad range of indicators coupled with the lack of standards, transparency, and unified reporting makes it a challenge to assess and measure true, impactful ESG credentials and the sustainability of a business.
At the same time, many banks have started to embrace/experiment in the Metaverse including DBS Bank in partnership with The Sandbox with a focus on driving sustainability. Will this be an opportunity or a challenge for financial institutions keen to demonstrate their commitment to a more sustainable future?
To help navigate these challenges Finastra invited three experts in ESG and Sustainable Finance alongside Christophe Langlois, their Global Marketing Lead, Fintech & Developer Ecosystem at Finastra, who hosted this insightful conversation:
Marcus Cree, MD Financial Technology and Services, GreenPoint Global
Tanuj Pasupuleti, CEO, Bankify
Jay Mukhey, Global Director of ESG, Purpose & Impact, Finastra
They discussed the following topics:
The case of ‘greenwashing’ in 2022 and how to identify it.
The main differences in terms of sustainable finance adoption and challenges between the key regions of the world?
The opportunities that come with sustainable finance.
The essential role open/API banking plays in fostering sustainable finance.
Metaverse from a sustainable finance standpoint.
To learn about the successful adoption of ESG and sustainable finance and what solutions are available right now on the market, watch the video by visiting this page.
This is a sponsored post by Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems, Gold Sponsors of FinovateFall 2022.
In today’s fast-moving landscape, financial services firms are under increasing pressure to remain competitive and generate more revenue by developing new products and services faster, while still leveraging their existing resources.
In recent years, this has seen many financial services organisations turn to external fintech solutions to help accelerate innovation and quickly obtain new digital capabilities. And so, fintech partnerships have become critical components of financial institutions’ growth strategies, rather than the technology experiments they started out as.
To ensure innovation success, it’s vital that financial services organizations can easily leverage and provision new fintech services and applications by seamlessly integrating with their existing production applications and data sources. But the true value and potential of fintech solutions can’t be unleashed until integration is quick and easy.
As many firms will attest, arduous and costly integration can see the value of such initiatives dwindle before their very eyes – sometimes to be lost altogether. Common challenges can range from unforeseen issues tying up precious IT resources, to costs spiraling out of control and timescales sliding drastically from what was planned or what is desirable. Ultimately, these delays can result in the loss of any competitive edge as rivals launch similar solutions much faster.
Ensuring successful integration
Fintechs have become increasingly attractive as they incorporate the latest technologies, modern application methodologies, and deployment platforms. However, for banks to make effective use of these opportunities, those technologies need to be woven into its existing infrastructure, much of which is likely to be based on legacy technology.
Consequently, successful integration requires an understanding of the intricacies and idiosyncrasies of those legacy systems. It also demands knowledge of the underlying data architecture and how to connect the new technology to systems that weren’t built to be connected to in such a way. While this isn’t an unsurmountable problem, getting it right will take resources, budget, and time.
Careful consideration is also needed when undertaking the integration to ensure that the resulting architecture doesn’t become overly complex. After all, if it comprises multiple technology layers from different vendors, all with differing versions and releases, any future change could impede the bank’s ability to take advantage of the benefits they set out to achieve.
Next will be to determine how data from existing systems will be fed into the new system and in what format. To get around this, it’s all too easy to layer extraction tools upon a myriad of other tools, including transformation tools, data lineage, master data management, databases, and data lake technologies. However, what firms are then left with is a multi-headed monster that no one person truly understands. This approach to data integration is also complex and costly to design, deploy, manage, and maintain. Fortunately, adopting a smart data fabric approach, a next generation architecture, can provide a way for financial services organizations to overcome these challenges.
Achieving bidirectional connectivity
By leveraging a smart data fabric, it is possible for institutions to connect and collect real-time event data and obtain unmatched integration capabilities using just one holistic platform. This approach eliminates the complexity and inefficiencies of manual integrations and other legacy approaches to integration and enables firms to integrate applications faster and more efficiently. It does this by essentially creating a dynamic real-time, bidirectional gateway between cloud-based fintech applications and their own production applications and data assets.
The smart data fabric integrates real-time event and transactional data, along with historical and other data from the large number of different back-end systems in use by financial services organizations. It transforms the data into a common, harmonized format to feed cloud fintech applications on demand, thus providing seamless, real-time, bidirectional connectivity and integration with the bank’s existing legacy enterprise data, production applications, and data sources.
Not only does this help firms to realize faster time to value and achieve simpler implementation that is easier to maintain, but it also gives financial services institutions the agility needed to innovate faster and keep critical initiatives on track. Additionally, it helps to futureproof their architecture by making it easier to incorporate any fintech applications and technologies available in the marketplace, thereby empowering them to react to new opportunities and changes in their environments.
Ultimately, there is immense value to be unlocked from fintech solutions and applications. However, that is only possible through swift and simple integration. By implementing a smart data fabric-enabled data gateway, financial services organizations can quickly and easily integrate new solutions within their existing infrastructure to ensure they are able to keep pace in a rapidly evolving landscape.
This is a sponsored post by Strands, Gold Sponsors of FinovateFall 2022.
Nowadays, personalization has become a must in all sectors that affect consumers’ daily lives. Companies such as Netflix and Amazon have already been able to create totally customized and customer-centric experiences thanks to advances in technology, data, and analytics. Digital Banking has also faced these expectations, demanding personalization for different user bases, needs, and underserved segments. With a focus on financial wellness, banks can generate cross-selling opportunities and create personalized journeys according to the interests of their customers.
Technology advancements have enabled companies to collect, analyze, and use data from a variety of sources, including internal and external channels, enabling banks to make better decisions, offers, and actions than ever before. Unfortunately, most banks still struggle to know their customers or to interact with them timely and relevantly – to provide the right offers at the right time to the right customers.
This is what customer centricity means, which is vastly different from product or brand centricity. When a financial institution has a deep understanding of its customers, it can provide solutions that are tailored to meet their specific needs, life stages, values, and interests beyond their typical sociodemographic information.
As part of this approach, extra data sources are tapped, such as third parties, in addition to what’s available within core banking as open banking data, surveys, social media, and other data sources consented by the customers, integrating machine learning, categorized transactional data, and other customer experience solutions that can enrich the available raw data.
How to derive and use such insights is now the question. In the first stage of data enrichment and analysis, core application data can be used to understand how the customer interacts with the bank, the recency, frequency, channels, etc. Through this information and analytical models, it is possible for financial institutions to predict proactively what the customer is likely to want or need in real time.
The customer journey is vital in today’s financial services landscape and cloud-enabled business innovation is the vital ingredient.
A good user experience is a critical factor in helping consumers differentiate between firms and helping brands build lasting relationships with customers.
According to the Harvard Business Review, firms with leading customer satisfaction rankings can grow their revenues two and a half times faster than their competitors. Moreover, research by Forrester demonstrates that customers are over twice as likely to stick with a brand when their problems are solved quickly.
Yet, great digital experiences rely on intuitive GUIs and an agile, cloud native strategy, both of which are not easy to achieve. In this article, we’ll demystify how to get started with cloud computing in software engineering for banking and help you develop a leading customer UX.
What Are the Challenges of Cloud Business Innovation in Banking?
Approximately US$1.3 trillion was spent in 2020 on digital transformation, yet Deloitte data shows 70% of projects fail. That equates to over US$900 billion wasted — so what’s going wrong?
Just as an HD TV relies on good HD content, great apps need high interactivity with data, an always-on presence, security, and scalability to perform under high demand.
Eric Newcomer, WSO2 CTO, argues that cloud business innovation goes wrong when there’s a messy middle. In other words, when there’s a lack of clarity about how strategy, outcome, and skill coordinate the microservices within a platform, cloud business innovation becomes dysfunctional.
Within banking specifically, the stakes of digital transformation are extremely high. Today’s financial services firms must deal with an onslaught of cyberattacks and regulatory constraints, not to mention increased competition from new fintech entrants better-equipped to deliver excellent customer experiences. So how can financial institutions ensure they foster an innovative and successful cloud-first environment?
How to Overcome These Challenges
Great cloud computing in software engineering needs equally great cloud native practices and technology, focusing specifically on integration and APIs. Without this focus, customers lose the always-on, always integrated feel that today’s users demand.
Therefore, financial services firms require an all-in-one platform delivering accelerated and enhanced engineering processes to speed up innovation in their cloud environment. Unfortunately, building robust and agile platforms from scratch can be timely and costly.
Instead, partnering with existing solutions providers allows financial service firms to focus on developing cloud banking innovations and better deliver security, compliance, and ideal customer experiences. You can read more about overcoming challenges for banks to generate fintech innovation here.
The Role of Digital Platform-as-a-Service Within Financial Services
An “opinionated” digital platform-as-a-service (digital PaaS) accelerates cloud banking innovation by tackling some of the core complexities of developing digital applications. As a result, you can build, deploy, and iterate new versions more easily.
Digital PaaS platforms enable diagrammatic and low-code functionality, providing a great developer experience. In turn, your teams can increase their productivity and attention to quality assurance for end-users.
Moreover, digital PaaS integrates with automated deployment tools using Docker and Kubernetes. As a result, you can test, develop, and deploy new user features for maximum customer satisfaction faster than ever before, using just a few clicks.
Digital PaaS solutions deliver seamless platform functionality and integration with your existing data warehouses, allowing you to leverage efficient and scalable consumer solutions.
How Low-Code Digital PaaS Enables Cloud Computing in Software Engineering
There isn’t a one-size-fits-all solution to cloud computing in software engineering, so what makes a digital PaaS-based method the most appropriate for financial services?
A digital PaaS approach provides a highly stable environment to create and manage APIs since it establishes core conventions and assumptions within your workflows. These assumptions include the programming language and dev environment, all the way to the publishing process on software marketplaces. As a result, you can remove barriers to collaboration and shorten project lead times. Similarly, as a cloud-enabled solution, you provide collaborative space for your teams to work.
Moreover, you can easily build platform microservices and provide teams with autonomy over their software output. Software teams can publish updates to critical platform elements accordingly without jeopardizing the rest of your platform or relying on slower project teams, keeping your user experience competitive.
However, the benefits don’t stop when you hit publish. Digital PaaS solutions allow you to run professional DevOps systems and make improvements in step with live user trends. Consequently, you can remain competitive and establish a close relationship with customers.
Finally, once your APIs are built, you can share them through marketplace and import or export data with other SaaS platforms. As a result, you can leverage other data sources for enhanced features. For example, you can capitalize on open banking ecosystems, enhance your security through additional identity checks, and more.
And so, with complex development and deployment tasks that are both easy to learn and use, you can deliver fresh digital services faster — and more accurately — than ever.
Introducing Choreo by WSO2
With around only three in ten digital transformations being successful and the heightened competition within banking today, financial services companies need to innovate at speed and scale.
Choreo is a digital PaaS that helps companies manage and develop APIs, services, and integrations quickly. Choreo enables developers and operations teams to go from ideation to production in hours or days versus weeks and months via a seamless environment that eliminates the complexity of cloud native computing.
Choreo provides a diagrammatic and pro-code environment side by side, allowing you to create an outline and make detailed tweaks in minutes. It includes a developer marketplace with over 400 pre-built connectors that makes it easy to discover, reuse, publish, and share.
With security and transparency at its foundation, you can easily trace code changes and root issues across your entire development history. You can also benefit from AI-assisted coding and enhanced governance features.
Find out more about Choreo and create an API with just a few clicks.
This is a sponsored post by Ann Kuelzow, Global Head of Financial Services at InterSystems.
A staggering 86% of financial services firms globally are concerned about using data to drive decision-making within their organizations, according to the latest research from InterSystems of 554 business leaders within financial services companies, including commercial, investment, and retail banks, across 12 countries globally. This lack of confidence largely stems from an inability to access data from all the needed sources and the time taken to access data. Given the wealth of data financial services firms have, this is a major concern, with the potential to open organizations up to risk and severely impede key business initiatives. In fact, more than a third of firms in the survey cite the primary impact of these challenges as being difficulty in gaining a 360-degree picture of customers.
As competition intensifies within the financial services sector, customer 360 is something that all firms must confidently be able to obtain. Doing so will empower firms to provide clients with the products, services, and hyper-personalized, real-time experiences they have come to expect across all aspects of their lives. But this relies on gaining access to accurate, consistent, and real-time data encompassing all touchpoints. Consequently, firms must first address underlying issues with their data architecture.
Solving data challenges
Gaining a holistic view of the customer requires firms to pull together all available information on each customer. As customers are likely to interact with a variety of different departments and personnel within the firm, this information can be spread across multiple systems and silos, including trading, savings, credit cards, loans, insurance, CRM, support, data warehouses, data lakes, and other applications and silos, as well as data from external sources and suppliers. The data is often in dissimilar structures and formats and follows different naming conventions and metadata. Therefore, making sense of this dispersed data typically requires significant effort and expense, and using it to make informed, accurate, and fast decisions is a major challenge.
As organizations look to solve these problems, data fabrics, a next-generation architectural approach, have emerged to provide financial services firms with a way to speed and simplify access to data assets across the entire organization. It does this by connecting to existing systems and data silos containing relevant data, both inside and outside the organization, and ingesting the relevant data on demand as it’s needed. It accesses, integrates, and transforms the data as it’s being requested, providing a real-time, consistent, harmonized view of the data from different sources, all from a single view. This allows firms to gain a complete 360-degree view of the customer.
Going a step further
A smart data fabric takes this approach a step further by providing built-in analytics capabilities which enable business users to understand customer behaviors and actions better and even to predict the likelihood of future behaviors, such as purchase of new services, churn, or response to targeted offers. It also provides the business with self-service analytics capabilities, so line-of-business personnel can drill into the data for answers without relying on IT, eliminating the usual delays associated with adding custom requests to the IT department’s queue.
This next generation approach also helps solve latency issues, as smart data fabrics lets the data reside in the source systems, where it’s accessed on demand, as it’s required.
Adopting this approach will help to restore firms’ trust in their data, ensuring that they can quickly access consistent, reliable, and accurate information on which to base decisions, fuel data initiatives, and build up a comprehensive view of the customer.
Elevating the customer experience
Being able to leverage the wealth of customer data inside and outside of the organization for customer 360 will empower firms to offer a vastly improved customer experience. For instance, with a single view of the customer, advisors, help desk, and support teams will be able to provide customers with the immediate answers and recommendations and thereby enhance their interactions with the organization.
Armed with customer 360, firms will also be able to increase revenue streams by predicting customer behavior to maximize cross-sell and up-sell opportunities. For example, incorporating and analyzing dozens of data points from different systems enables firms to determine which customers are likely to respond to a premium credit card offer and least likely to default on payments. This allows firms to identify which customers to target with particular offerings and services. Similarly, firms will be able to predict which customers are at risk of churning and take appropriate corrective actions in advance to reduce churn.
Together, these capabilities will help to elevate the experience and services being offered to customers, while also helping financial services firms to create and cement a competitive edge.
Restoring trust in data
Ultimately, by adopting smart data fabrics, firms will be able to overcome the data challenges that are currently preventing them from using their data to make better decisions by leveraging a more complete and more current 360-degree view of each and every customer. With a complete and trusted 360-degree view of the customer, firms will be in a strong position to fuel new customer initiatives, enhance the customer experience by delivering cohesive and personalized interactions and offerings across departments, and set their institution apart.
This is a sponsored article by Kim Minor, Senior Vice President Global Marketingat Provenir.
To compete successfully in our digital-first, instant gratification world, you need a risk-decisioning ecosystem designed to intelligently serve customers. A solution that not only connects every piece of credit decisioning and AI/ML software you own, but also enables you to access any external and internal data source in real time to auto optimize decisions—along with the impact of those decisions—across your entire customer lifecycle.
But many financial services providers are unable to tie all these elements together because legacy risk analytics offerings just weren’t built that way. So, as a user you’ve had to look to multiple products when you want world-class solutions for data and AI-powered decisioning. You’ve relied on vendors to make changes. You’ve relied on multiple user interfaces (UI) to keep control. You’ve waited months for solutions to go live, and… you’ve needed to replace technology a few years later when it can’t expand and scale with your business.
Whether you’re a startup with a single product line, or a unicorn offering a range of financial solutions, you need to create a financial ‘home’ for your customers, which means delivering a great customer experience from start to finish, regardless of changing dynamics.
Here are the five key features of a risk decisioning platform that will enable you to create world-class customer experiences:
No-Code Management: to integrate systems, change processes and launch new products
In a survey of 400 decision makers in fintech and financial services organizations across the globe, 78% of respondents cited low/no code UI as a feature they have or that would be most important when selecting an automated risk decisioning system. Inflexible solutions that require a vendor or your IT department to connect to a new data source, make workflow changes or launch a new product hinder time to market, increase costs, and put you behind your competitors. Look for a solution that has pre-built data integrations and a visual, drag-and-drop interface to easily and quickly make changes to respond to evolving consumer needs.
Connected Data: easy access to real-time and historical data
Through our survey of decision makers, we discovered that credit risk decisions rely more on historical than real-time data. Sixty-one percent of respondents use both historical and real-time data when making credit risk decisions yet only 11 percent mostly use real-time data. To make accurate credit risk decisions, easy access to data across the whole credit lifecycle is a must. And all teams must have access to the same data sets to ensure big picture decisioning. Without it, the insights needed to get new products and processes to market faster and to make intelligent risk decisions remain hidden in silos of data.
Centralized Control: data and AI-powered decisioning across the customer lifecycle
To power continuous innovation across the customer lifecycle, organizations need to be able to launch, learn, and iterate with ease, but separate solutions for data and AI-decisioning slow innovation down. Consumers expect their experiences to be seamless, giving them access to tailored financial services products while also protecting them from financial fraud. To support this consumer need and business strategy, financial services organizations need to combine data and decisioning into one cohesive solution that can provide the technology to access, analyze, and action data across fraud, identity, and credit decisioning processes.
Auto-Optimization: decisioning that gets more accurate every time it’s used
Do you know how your current risk models are performing? Or whether model drift is occurring and unhealthy? How long would it take you to respond to performance changes once they’re spotted? Traditional decisioning has relied on human intervention to spot model performance changes and identify efficiency improvement options, meaning improvements happen on an ad-hoc basis, if at all.
To operate at maximum efficiency and run the most accurate models possible, your AI-powered decisioning and data solution needs a centralized UI that connects all necessary data so it can be used to power a continuous feedback loop, where both historical and real-time data are used to auto-optimize performance on an ongoing basis. Model performance and accuracy can be monitored and adjusted in real time.
Grow and Expand with Confidence: Technology that scales and grows with your business
One of the biggest obstacles financial services companies face is having technology that can support their business as it evolves and grows. For example, people often find it a challenge to support decisioning as application volume grows and their offerings expand. Sometimes the impact can be from delays waiting for vendors or in-house teams to make changes; often it means procuring or building new solutions to fill in technology gaps or completely replacing existing solutions. Whatever the path forward, the impact is the same… delayed growth, limited agility, and user frustration. To preempt future technology challenges, look for options that empower you to grow, expand, and change direction.
To truly thrive in an increasingly competitive industry, you need to provide consumers with world-class customer experiences. A unified data and AI-powered decisioning platform lets you make smarter decisions, faster. Use your technology’s powerful data integration and automation capabilities to create streamlined user experiences and drive real-time decisioning.
About the Author: Kim Minor is Senior Vice President, Marketing at Provenir, which helps fintechs and financial services providers make smarter decisions faster with its AI-Powered Risk Decisioning Platform. Provenir works with disruptive financial services organizations in more than 50 countries and processes more than three billion transactions annually.
Companies around the world are facing increased pressure to ensure they are monitoring and screening new and existing customers against applicable sanctions lists. While having a comprehensive screening program is nothing new for regulated companies, the current regulatory climate has demonstrated that companies need to be prepared to balance the need for increased speed and thorough compliance.
As a global service provider, Trulioo must continuously innovate to meet an increasingly diverse range of regulatory compliance requirements that its customers face. Whether it’s data protection or Anti-Money Laundering (AML), the pace and scale of change for laws and regulations across the globe continue to accelerate.
Managing a rapidly evolving landscape with the updated GlobalGateway
Without a way to accurately verify identities, the digital world is vulnerable to becoming a place where criminals will have the upper hand. To protect people and information, a robust digital identity solution provides a wide range of benefits including reduced onboarding costs, mitigating breaches and the fines they incur. Ultimately, digital identity is the foundation for building meaningful and sustainable relationships with customers.
This is why Trulioo has released its latest GlobalGateway platform update: to enable businesses in a wide range of sectors to protect customers and themselves from rapidly-changing risks, and to ensure they meet all regulatory requirements.
From straight-forward eIDV to document verification, GlobalGateway has always been designed to provide customers with any combination of verification methods. The platform now delivers new, innovative capabilities to address the changing needs of customers and the market as a whole, both at the point of onboarding and beyond.
The updated platform comes with three key new capabilities: Advanced Watchlist, UtilityID, and enhanced Business Verification. These new services streamline the onboarding of users and businesses, as well as providing continuous monitoring for fraud, money laundering, and illicit behavior throughout the customer lifecycle.
Removing friction in document verification with UtilityID
UtilityID is a consent-based identity verification service that uses utility provider data, such as bills and records, to verify addresses. It removes the need for the manual download, upload, and scanning of documents and other high-friction document verification processes. With UtilityID, Trulioo customers can meet Proof of Address compliance requirements in real-time, provide a faster onboarding experience, gain a higher level of address accuracy, and significantly reduce operation times associated with manual utility document verification and review.
UtilityID is offered via the same API as all other GlobalGateway solutions, making integration easy for customers and giving them full control over the user journey and experience for the businesses they serve.
Introducing Advanced Watchlist
Also updated is the Trulioo AML Watchlist, which provides increased coverage and the ability to conduct all forms of watchlist tracking. It is an ongoing monitoring service performing Know Your Customer (KYC), sanctions, and AML checks that ensure customer userbases are at the lowest risk of:
Sanction list presence
Fraud
Money laundering
Corruption
Financial crimes
Terrorism
Some examples of the watchlists Trulioo screens against include: OFAC, U.N. Terrorism list, EU Sanction Lists, Her Majesty’s Treasury, and INTERPOL.
As one of the most complete watchlist services on the market, GlobalGateway Watchlist is the AML compliance solution of choice for the world’s largest global marketplaces, financial institutions, and trading platforms. It’s fully integrated into the GlobalGateway platform and connects to customers’ eIDV onboarding journeys via a single API integration. AML Watchlist ensures the integrity of your userbase at the point of onboarding and continuously thereafter, as it’s able to screen and continuously monitor against 6,000+ global watchlists and 20,000+ Adverse Media lists.
This improved capability increases accuracy and minimizes manual checks and reviews, potentially saving customers millions of dollars in increased operational efficiency and reduced manual oversight.
Enjoy Enhanced Business Verification
GlobalGateway also allows companies to verify a business’ details anywhere in the world, from high-level data to stringent Ultimate Beneficial Owner verification. It leverages revolutionary intelligence to address the complex challenges of conducting business at an international level, including managing varying regulations, diverse standards for Business IDs, addresses and local languages, as well as automatically selecting the best-suited source of information. Trulioo’s unmatched global network of data sources allows Know Your Business (KYB) customers to easily access accurate and up-to-date information that supports compliance requirements and due diligence.
An updated results panel also allows customers to rely on a single, authoritative view of the businesses being verified. This removes the need for businesses to spend time figuring out which business they need to do a deeper level of due diligence with. Trulioo Business Verification customers will also benefit from improved performance and data quality. All of this is supported by a revamped API guide with new FAQs and best practices.
With Trulioo, no matter what your needs are or where you want to conduct business, you’ll receive a made-to-measure solution, built with purpose, for you. For more information, or to book a demonstration of the Trulioo GlobalGateway platform, please visit www.trulioo.com.
This is a sponsored post by Ann Kuelzow, Global Head of Financial Services at InterSystems.
Amid ongoing disruption, sudden market changes, and unforeseen circumstances, the ability to leverage live data and gain a 360-degree view of the enterprise is vital for financial services firms to gain much-needed resilience and agility. However, for many organizations, a number of data-related issues currently stand in their way.
Research from InterSystems has found that the biggest data challenge firms are facing is delayed access to data. This is followed by not being able to get data from all the required sources, and not getting it in the format needed. Meanwhile, line of business professionals also cite a reliance on IT teams to analyze and turn data into actionable insights as a key frustration.
Getting to the root cause
The majority of these concerns are likely to stem from organizations having amassed overly complex data infrastructures that rely on a disjointed set of production applications and data management technologies. This has resulted in the creation of a large number of data and application silos which make it difficult to obtain information and insights in a timely manner, and in a way that is easy to interpret and share. This is evidenced by 98% of respondents reporting that there are data and application silos within their organization.
The impact is significant, hindering their ability to gain accurate and current visibility of their distributed data assets to further vital initiatives such as business 360, improving enterprise risk and liquidity management, and data-driven decision-making, for example. Furthermore, more than a third of line of business professionals say they are basing decisions on assumptions rather than real-time information. Meanwhile, an overwhelming 86% of global financial services institutions lack confidence in using their data to drive decision-making.
This has major implications for both financial services organizations and their customers and requires solutions that enable firms to gain access to consistent, accurate, real-time data to enable them to leverage live data and power their critical business initiatives. This is where new, modern approaches to data management, including smart data fabrics, are primed to help.
More diverse data, for better insights
The smart data fabric, a new architectural approach, provides an overarching and nondisruptive layer that connects and accesses information from source systems on demand. It accesses and harmonizes data from existing systems and silos inside and outside the organization, ensuring that the information is both current and accurate. Together, this helps to eliminate delays which lead to errors, missed opportunities, and decisions based on stale or incomplete data.
With so much data at their disposal, using a smart data fabric allows financial services firms to incorporate both real-time event and transactional data along with historical data. Doing so provides business users with self-service analytics capabilities, enabling line of business professionals to make “in the moment” decisions. By incorporating more data from more diverse sources, firms can obtain a more complete and comprehensive view of the business and more insightful analytics.
This approach also addresses limitations of previous approaches, such as data lakes, data warehouses, static reports, and dashboards, while allowing firms to maximize their previous technology investments, rather than needing to “rip and replace.”
Empowered by a 360-degree view
Together, the capabilities provided by a smart data fabric will help firms overcome the issues they have identified by giving them access to a consistent, accurate, real-time view of their enterprise data assets. This will enable them to gain better insights and leverage live data to drive decision making.
With a truly comprehensive 360-degree view of the enterprise, including trading activity, customers, regions, risk, capital, and assets under management, firms will be better placed to respond to growth opportunities, address challenges in an agile manner, and make more informed, accurate business decisions.
By obtaining near real-time visibility across various departments and regions, firms will be able to improve various aspects of the business, from their understanding of market risk and risk reporting, to cash flow and regulatory compliance. Additionally, they will not only be able to gain a complete, 360-degree of the business, but will also be able to establish a comprehensive view of customer and institutional client activity to fuel a wide range of initiatives.
Data as a competitive differentiator
As financial services firms look to address their data challenges, a smart data fabric approach will help to ensure their concerns around outdated, inconsistent, and inaccurate data become a thing of the past. It will also help to restore confidence in using data to drive decision making and arm them with the critical insights needed to retain, support, and grow their client base, gain better visibility for risk management, and adapt to changes and disruptive events in the moment.
Amid ongoing disruption, sudden market changes, and unforeseen circumstances, this 360-degree view of the enterprise and ability to access and utilize real-time data will give them the resilience and agility needed to weather any storms that may arise and gain a true competitive advantage.
What a week it was in San Francisco, as FinovateSpring landed back in the tech capital of America!
And as much as this show felt familiar, being back in the same city again didn’t mean that we’re returned to 2019.
We come back to find a very different fintech ecosystem. There are surface-level similarities between where financial services is now and where it was in 2019, but the last few years have brought about dramatic changes all over the world. And more changes and challenges are coming. There are so many factors affecting everyday consumers and their finances that it’s hard to keep up with them all, but the short version is that consumers need help, and it’s up to us as an industry to provide the tools and technologies that people need to secure their financial futures.
The good news is that creativity in fintech abounds, and so do new ideas. Our attendees saw both on display over the three days, as innovative demoers and industry experts took to the stage to share their insights and vision for the future of fintech. And now it’s your chance to get a piece of the action, wherever you are in the world.
This is a sponsored post by PwC, Gold sponsors of FinovateSpring 2022. Written by Vicki Huff, Global New Ventures & Innovation, TMT Vice Chair, PwC United States; Matthew Blumenfeld, Digital Assets Strategy Leader, PwC United States; and John Garvey, Global Financial Services Leader Principal, PwC United States.
If the boom and accompanying volatility in cryptocurrencies and NFTs leaves you uncertain, and if you’re not sure yet what to make of the metaverse, there’s a good way to separate hype from reality: follow the money.
Like the internet in the early 1990s, the crypto boom encompasses both transformative technologies and wild speculation. But some of the smartest money in the world — high tech venture capital — is flowing to some specific areas. These capital flows may hint at how the new, emerging digital economy will function.
Where the crypto unicorns are today
No boom is complete without turbulence along the way. Total cryptocurrency market capitalization reached almost $3 trillion by late 2021 — but market volatility at the start of 2022 wiped out nearly a third of this value. This drop, largely driven by macroeconomic and geopolitical concerns (rather than any problem with crypto technology or blockchain applications), may have given crypto speculators a rough ride. But it in no way interrupted the underlying innovation — and a crypto market gap of “just” $2 trillion is still about ten times larger than it was at the start of 2020.
The boom includes companies creating the foundation for Web 3.0 and the crypto economy. These investments began to scale in April 2021, when cryptocurrency exchange Coinbase held an initial public offering (IPO). It resulted in a valuation of over $80 billion on the first day of trading. Following this success, capital began to pour into startups which, like Coinbase, are building the foundations of a new digital economy that runs on cryptocurrencies. Crypto M&A rose to $55 billion in 2021 compared to $1.1 billion in 2020 — an increase of nearly 5000% — according to PwC’s Global Cryptocurrency M&A and Fundraising Report. Fundraising rose 645% to $34.3 billion from $5.6 billion according to the report.
The result is a new crop of unicorns (VC-backed startups valued at $1 billion or more.) Our analysis, based on PitchBook Data, identified 48 unicorns focused on cryptocurrencies, NFTs, and other foundations of a new, metaverse-based digital economy. Two of these unicorns (Coinbase in the U.S. and OneConnect in China) have since held IPOs, leaving 46.
The U.S. today is home to 24 of these 46 firms, but since cryptocurrency (and the capital that backs it) has no boundaries, companies can easily change locations. China’s crypto crackdown last year led many crypto startups to move or found themselves elsewhere. There have been concerns that potentially onerous regulations in the U.S. might also lead crypto companies here to consider relocating. But the recent Executive Order from the Biden Administration may have dispelled those fears for now.
What the crypto unicorns are building
Today, crypto and NFT unicorns are largely focused on the nuts and bolts of a new digital economy: buying and selling, digital infrastructure and analytics, and supporting the creator economy and other new digital services.
Many, for example, are offering financial services. Crypto exchanges help people and organizations buy and sell cryptocurrencies and tokens, store them (sometimes in interest paying accounts), and trade crypto options, futures and other derivatives. Crypto payments networks support more frictionless and trusted money transfers, while crypto financing startups help people and organizations use crypto as collateral for loans and other financial market operations.
Other unicorns are enabling other aspects of the new economy. They may offer hardware for cryptocurrency mining and operations, security and custody for digital assets, cross-blockchain transactions, support in building blockchain applications, blockchain-based data analytics, or blockchain-based smart contracts to help enforce contracts, automatically conduct transactions and more. Others help companies and consumers create, sell and invest in NFTs, purchase and develop digital real estate (such as digital storefronts), or invest in assets within one of the best places to reach Gen Z: gaming environments.
It’s not just crypto unicorns active here. Established financial services companies and fintech startups are also active in this rapidly accelerating effort: to build a trusted digital monetary system that is a critical building block of the metaverse.
What to do right now
Even if you have no plans to make big crypto investments, you owe it to your company’s future to keep track of this new world for financial services, data analytics, and virtual investments. Here are three steps every business leader can take today.
Start learning. You don’t have to be a crypto expert, but someone in your company should be — and you and other key decision makers should understand the basics and keep an eye on the underlying technologies and economic forces.
Get engaged. Cryptocurrency may feel chaotic at times, with volatility high and regulations still a work in progress. But given the speed at which investment is flowing and technology is maturing, if you wait until the dust settles, you may be left behind. Consider low-risk, low-cost investments (such as NFTs) to help build institutional familiarity.
Stay nimble. The speed of development means that you probably shouldn’t go all in on any one strategy — such as linking yourself too tightly with a single vendor, partner, or strategy. Continue to monitor developments in technology, user preferences, and the growth of related digital ecosystems.
With a cautious yet forward-looking approach, your company can avoid speculative bubbles and focus on the value that cryptocurrencies and related startups can provide.
3. “Coinbase IPO Exceeds All Expectations, Showing More Promise For Bitcoin,” Nasdaq.com, https://www.nasdaq.com/articles/coinbase-ipo-exceeds-all-expectations-showing-more-promise-for-bitcoin-2021-04-19, accessed 25 March 2022
4. PitchBook Data Inc. is the underlying data source for unicorn funding throughout this report. The analysis conducted by PwC has not been reviewed by PitchBook, and industry terminology used in this article may differ from PitchBook’s.
Accessing and leveraging enterprise data in a timely fashion has become one of the most definitive ways to outpace the competition in the business world. In the financial services industry, financial firms must be able to use data to generate a complete view of the business and the customer at many levels of the organization.
Until recently, data-driven insights were the sole purview of leaders, stakeholders, and team members with the right technical expertise. Now, financial organizations are searching for ways to deliver insights across their organizations, from the board room to one-on-one interactions between customers and customer service representatives.
This is what’s known as data democratization, and it will be key to driving innovation in the financial services industry moving forward.
According to a recent study sponsored by InterSystems entitled “Empowering Line of Business Users Through Data Democratization,” one of the most important steps in democratizing the enterprise’s data is breaking down data siloes. The study, produced by WBR Insights and published by the Financial Information Management (FIMA) conference series, engaged 250 leaders from the financial industry to learn just how they intend to improve access to data over the next 12 months.
Data Access, Compliance, and Analytics Are Key Projects for the Future
Researchers concluded that any company that isn’t satisfied with its current ability to democratize data may need new data technologies. They may also need to consult with third-party experts to deploy enterprise-wide data governance processes and manage changes among staff members.
Indeed, 62% of the respondents said that providing improved access to siloed distributed data is among their top data priorities for the next 12 months.
Data Siloes Are the Biggest Barrier to Innovation
Innovation in the financial services industry has taken on a variety of forms. Self-service solutions for customers have become particularly attractive to organizations recently, as customers are demanding more ways to connect with their financial companies from home. Artificial intelligence and machine learning are also making inroads among financial firms due to their ability to make predictions and offer strategic insights.
But the most important asset for all these innovations is data. Without accessible and usable data, the organization can’t make use of advanced technologies or develop innovative applications for them. Too often, enterprise data is locked in silos due to systems that don’t communicate with each other.
According to the respondents to the FIMA and WBR Insights study, data siloes were among their top three biggest barriers to innovation.
Specifically, 54% of the respondents listed “data silos” as a top barrier to innovation. These organizations know that they have valuable data locked away in their systems, but because those systems can’t communicate with each other, there is effectively a barrier between the organization, its data, and the insights that data contains.
In the context of the financial services industry, it should be no surprise that unlocking the potential of that data is a top concern. Data is quickly becoming a new currency, and the ability to use customer data for insights is driving competition across the sector.
These are just a few of the insights offered by the new report by WBR Insights and FIMA. If you’d like to gain actionable insights into how you can democratize data at your organization, download the report today.
The financial industry has made significant investments in document lifecycle management solutions to enhance productivity, accuracy, and flexibility. There is broad recognition that paper-based processes are a huge source of waste and inefficiency, but simply transitioning away from paper often isn’t enough on its own to achieve true digital transformation. That’s because performing a digital-based process manually still presents many of the same problems. In order to leverage the true benefits of digital document management, fintechs need to implement data capture and document generation capabilities as part of a broader process automation solution.
A Quick History of Data Capture & Document Generation
To understand how fintechs can use data capture and document generation technology to enable their digital transformation, it’s helpful to take a moment to understand the history of these tools and how they’ve developed since their origins.
Data Capture
The financial industry was an early innovator in data capture technology with the development of the specialized OCR-A font in the 1960s. This simple monospace font is still used today for the account and routing numbers on an ordinary bank check. Early data capture technology relied on pattern recognition, so an exact pixel match was needed to read the characters electronically and match them to a corresponding character in a font library. While this worked well enough for scanning printed bank checks into a computer system to track transactions, reading anything else on the check with an automated system required further developments in data capture tools.
Modern character recognition technology utilizes a more sophisticated feature detection approach that uses the component elements of each character to distinguish them from one another. An “A,” for example, usually consists of the same basic elements (two angular lines that come to a point with a horizontal line crossing them) regardless of the font used. Breaking characters down into their component elements has even made it possible for software to read handwritten characters as well as machine-printed text.
Document Generation
Document generation technology emerged in the 1970s in the form of document assembly, which was originally used by lawyers to streamline contract creation. Contracts are highly structured and rules-oriented, which made it easy to build a decision-tree logic that could be understood by the software tools of that era. Early document assembly programs used a collection of document templates that incorporated conditional fields the software could replace automatically each time it generated a contract.
Modern document assembly is typically used as part of a more robust document automation solution. Software extracts information from a database and inserts it into a template to generate unique documents quickly, easily, and accurately. These programs are much more sophisticated and flexible than early document assembly tools, allowing organizations to programmatically generate a wide range of documents without ever having to look at the contents prior to the final review process.
Data Capture & Document Assembly in Fintech Today
Despite being an early innovator in OCR technology, the financial industry has been slow to implement more robust data capture capabilities throughout their operations. According to a recent study, 63% of banks are still collecting information from documents manually, a process that’s not only time consuming, but also incredibly prone to error. They’ve been slightly faster to adopt document generation, with 49% of banks still relying on manual processes to create documents.
Ironically, fintech organizations are even more dependent upon manual practices than traditional banks. When it comes to data capture, 75% of fintechs are reviewing documents and entering their data manually rather than using an automated solution. The story is largely the same for document generation, as 79% of them are still creating documents manually.
Understandably, most of these organizations are planning to implement some form of automated data capture and document generation solution within the next two to three years. That’s because they recognize that it will be difficult to achieve true digital transformation without them.
Why Data Capture and Document Generation Are So Important for Fintech
Fintech companies have developed a wide range of innovative financial tools that allow consumers to take better control of their finances and help organizations manage their resources more efficiently. In order to deliver those streamlined solutions, however, fintechs need to have the capabilities in place to make their own processes more efficient.
Data capture and document generation work together to help these organizations maximize the value and potential of their document management systems. Financial information can be submitted in many different formats, ranging from digital forms and fillable PDFs to images, flattened PDFs, and scanned documents. Extracting information from each of these formats requires a sophisticated understanding of data capture that few software developers possess.
Once that data is extracted, it can be routed anywhere it’s needed by workflow automation tools. That could be a new document that’s being generated, but more often it will be sent to a database. When the time comes to generate a new document, previously captured information can be inserted wherever it’s needed programmatically. Multiple documents (or just sections of them) can also be merged or split apart to create entirely new ones filled with information drawn from several sources.
All of this can be done in a matter of seconds with the right software integrations, which saves a tremendous amount of time for fintech teams who have many other priorities to focus on. By incorporating robust data capture and document generation capabilities into their platforms, they can provide faster, better functionality to their customers. Rather than uploading a document and waiting for it to be processed, information can be extracted and routed wherever it’s needed instantly to facilitate faster reviews and resolutions.
Another key benefit of data capture and document generation is accuracy. Between manually reviewing information, entering it by hand into a system, and then retrieving it to create new documents, there are plenty of opportunities for mistakes to be made. In a financial context, those errors often have the potential to be systemic, creating additional errors that are time consuming and expensive to remediate. Automated extraction and assembly remove the risk of human error, which enables fintechs to accelerate and scale their processes more effectively.
Integrating Data Capture and Document Generation with Accusoft
For over 30 years, Accusoft has been a pioneer in building software integrations that expand application functionality. We provide a variety of data capture and document generation solutions that meet the needs of today’s fintech platforms. Whether you’re incorporating functionality directly into your application with an SDK or deploying a cloud-based solution that connects to one of our APIs, we have the flexibility to help you integrate the features you need to complete your digital transformation. To learn more about how Accusoft can enhance your fintech application with data capture and document generation, talk to one of our solutions experts today.
