Digitisation is driving unions across the financial world, and especially in the payments industry. Mastercard’s pioneering acquisition of the UK bank-account-based payments system Vocalink sets a precedent for such mergers all around the globe, in large measure due to the growing influence of the world’s first truly digital generation, the Millennials, who demand instant transactions in real-time.
Millennial and Gen X bank customers seem to be relatively independent, adept at employing online and mobile apps to complete their financial transactions. However, research shows that these digitally confident customers still value personalised advice, especially regarding investment decisions—and retail banks are in the best position to meet that need through immediate, tailored solutions developed using available customer data.
The tidal wave of banking regulations during the aftermath of the last financial crisis has given a boost to an unlikely beneficiary: artificial intelligence. Regtech along with AI, ML and NLP are the new warriors employed by many forward-thinking banks to get a handle on the massively costly compliance workload, and many are witnessing a return to profitability as a result.
Traditional banks have a long history, which is good and bad—good because of well-established customer relationships; bad due to cumbersome legacy systems, some created in the days of analog, that struggle to adapt to the rapidly changing demands of the digital age. Like it or not, to keep up with customers and competitors, most banks have a lot more ground to cover.
Governments around the world have joined the battle against money laundering – passing laws that put an end to anonymous banking services and under-the-table money transfers and payments that enable crime and finance terror.
SWIFT, the Society for Worldwide Interbank Financial Telecommunication, is the grease that keeps the wheels of the worldwide economy moving. Some 25 million messages – most of them money transfers – pass through the SWIFT system daily.
Millennials are changing banks from the inside out, causing them to reduce their dependence on the product-centric, transactional model that has been the standby of banking business for decades. Instead, banks are having to creatively cultivate one of their main advantages, their large customer bases, to develop adapted digital models that promote the bank’s role as advisor throughout their customers’ financial lifecycles.
In the recent massive ransomware attack, which threatened institutions, businesses, and organizations in 99 countries, unless victims paid the required ransom, hackers didn’t discriminate; they successfully targeted hospitals, Telco’s, government offices, and thousands of businesses with WannaCry, the breed of malware that they used to propagate the attack.
Incumbent banks face the prospect of operating in a more competitive environment with the introduction of the Payment Services Directive (PSD2) in January 2018. EU regulators want to increase competition, improve customer service, and promote the development of online and mobile payment systems.
This year marks 50 years since the introduction of the first ATM, which was put into use by Barclays in its Enfield branch in north London on 27th June 1967. Technology has come a long way since this early version of the self-service systems we use today but one thing hasn’t changed – the need for robust security solutions is critical for ATMs around the world.