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Technology the Key Driver

As per Gartner, digital banking demands new technologies. For bank - of the future - that is willing to grow digitally, will have to look for innovative ways of doing business. Banks face intense pressure to increase efficiencies and reduce costs while delivering next- generation digital services; however, incumbent application vendors have been slow to respond to new requirements, according to a new report from Gartner, Inc.

Gartner predicts that by the end of 2019, 25 percent of retail banks will use startup providers to replace legacy online and mobile banking systems.

New vendors are emerging to meetboth customer and bank needs for channel integration and dynamic customer experiences that make banking easier to accomplish on the devices customers want to use. These vendors challenge the traditional often incumbent vendors of traditional online and mobile banking and core banking solutions.

Startups and emerging providers of digital banking platforms offer banks interesting opportunities for innovation. Bank CIOs must prepare to manage the challenges of evaluating and selecting new vendors that may not have proven track records in the financial services vertical or may simply be new and untried without an extensive customer base. It can be difficult for bank CIOs to justify investment in their solutions to their boards and regulatory agencies, but don’t use that as a reason to exclude new vendors.

Gartner advises bank CIOs to work with business leaders and other key stakeholders to assess the bank’s comfort with, and ability to manage, the risks associated with using new providers, especially financial technology startups.

One of the most important reasons the market for digital banking solutions has opened up is that most legacy vendors that offer bank channel applications for both consumer and business customers have been slow to react to new customer requirements and demands of digital banking.

New vendors have emerged with digital banking capabilities that enable bank business and IT staff to offer apps and applications since current vendors often do not support open architectures that separate the presentation of services from the services and transactions themselves and, critically, enable the bank to bring new and existing processes together to offer innovative digital services. As a result, both customer, bank IT and business, requires vendors with digital banking capability to provide personalized, customer-centric banking experiences, data and behavioral analysis, location and context sensitive offering and creation of a partnership ecosystem to create new services leveraging on partner data, transactions and processes.

This is why many banks developing digital banking strategies to meet customer demands have sought out new providers to replace their existing online and mobile banking solutions with digital banking platforms.

Uni ed Digital Banking Platforms

Unified digital banking solutions make it possible to deliver new digital products and services, and create a multidimensional customer experience across all devices and channels. They enable the bank to develop and deliver services for use by both bank staff and customers, via any device or channel.

Digital banking platforms may include a broad range of capabilities including financial management, payments, marketing, loyalty, analytics and customer communication management. Unified digital banking platforms as an emerging technology, even though some of the solutions on the market, including some from niche banking system vendors, have been available for several years.

The market for digital banking platforms is highly fragmented. Vendors include:

Incumbent bank niche vendors

Mobile or online banking solution vendors

Horizontal digital platform and customer experience vendors

Horizontal portal vendors

System integrators

Emerging digital banking vendors

Startup digital banking vendors

Bank CIOs should be prepared for extensive, potentially disruptive changes in this market, including merger-and-acquisition activity, heightened competition and new entrants from other geographic regions.

Sel e: Revolutionizing Mobile Payments!

Everyone likes a good selfie, from President Obama to Bollywood celebrities to the general public! Selfies have become an everyday part of our lives.The selfie is still a relatively new word yet everyone knows what it means and furthermore it has transcended into almost every language in the world without translation. Australia has proudly laid claim to inventing the term selfie, and the word itself was named “2013 word of the year” by the Oxford English Dictionary – after its first known use was revealed to be by an Australian describing a photograph taken while drunk at a 21st birthday party.

According to a recent IDC report, the number of worldwide smart-phone shipments was expected to grow 9.8% by the end of 2015 to a total of 1.43 billion units. By 2019 they predict it will reach 1.86 billion units. Not to mention tablets, ultra-mobiles and PCs bringing that total to a staggering 2.5 billion units. Nowadays, every device contains a camera, normally both front and back, so it stands to reason, selfie has become a byword for every self-portrait from these devices!

So how is it playing a central role in mobile banking and payments? There has been much in the news lately regarding MasterCard’s rollout out of biometrics to streamline and improve customer convenience for online payments. This has great potential to change how people interact digitally with financial institutions and provides a superb opportunity to remove reliance on troublesome passwords. They are starting with Finger and Face biometrics but clearly also talking about harnessing future biometric innovations

This has been dubbed “Selfie Pay” in the media though clearly it’s much more than that. “Selfie Pay” an app-based authentication solution that leverages a mobile device to secure online payments and mobile banking applications using fingerprint and facial recognition.

The MasterCard Identity CheckTM technology is being rolled out to 14 countries this summer, including the U.S., Canada and the U.K. The Selfie Pay service is expected to be more secure than the weak passwords and PIN numbers.

It employs a layered approach to security, including device cryptography, geo-location, and biometric verification, enabling consumers to have a safe and easy way to complete payments online. Banks will benefit by having increased approval rates, providing more choice to consumers, improved cardholder loyalty and a strong fraud protection tool. The technology will help merchants reduce cart abandonment thus helping to drive revenue.

One of the biggest customer pain points regarding internet shopping and card not present transactions has been consumer friction related to 3D secure. Some payment experts have been less than complimentary about its usage ever since its introduction and biometrics is an ideal enabler for authenticating online transactions when compared to more passwords and knowledge based authentication.

MasterCard have said that they want to be able to trust people online, and the current technology that people are using to do that was not working. Every human being is frustrated with passwords – they forget their passwords, there’s just way too many of them; there are too many rules – so they had to come up with some way for people to easily identify themselves in a way that the issuer could verify. I must say, very interesting and innovative.

This has been dubbed “Selfie Pay” in the media though clearly it’s much more than that. “Selfie Pay” an app-based authentication solution that leverages a mobile device to secure online payments and mobile banking applications using fingerprint and facial recognition.

The MasterCard Identity CheckTM technology is being rolled out to 14 countries this summer, including the U.S., Canada and the U.K. The Selfie Pay service is expected to be more secure than the weak passwords and PIN numbers.

It employs a layered approach to security, including device cryptography, geo-location, and biometric verification, enabling consumers to have a safe and easy way to complete payments online. Banks will benefit by having increased approval rates, providing more choice to consumers, improved cardholder loyalty and a strong fraud protection tool. The technology will help merchants reduce cart abandonment thus helping to drive revenue.

One of the biggest customer pain points regarding internet shopping and card not present transactions has been consumer friction related to 3D secure. Some payment experts have been less than complimentary about its usage ever since its introduction and biometrics is an ideal enabler for authenticating online transactions when compared to more passwords and knowledge based authentication.

MasterCard have said that they want to be able to trust people online, and the current technology that people are using to do that was not working. Every human being is frustrated with passwords – they forget their passwords, there’s just way too many of them; there are too many rules – so they had to come up with some way for people to easily identify themselves in a way that the issuer could verify. I must say, very interesting and innovative.

As passwords have become a bugbear for many consumers, another area where biometric authentication could play a significant role is offering an alternative to password re- sets. A great many people cannot be bothered with trying to remember which password works with which account. So often they frequently just click the reset button or have to engage with a call-centre and pass through a series of security questions. This is both time consuming for customers as well as having a costly impact on call-centres. As much as 30- 40% of calls to call centres are for password re-sets. What is there not to like if you can just validate yourself and who you are with a selfie! Having this feature automated could save large corporations millions.

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