How the Pandemic is Forcing Wealth Managers to Evolve

How the Pandemic is Forcing Wealth Managers to Evolve

The Covid-19 pandemic has affected the entire globe in an unprecedented manner. It has presented the world with a humanitarian and health challenge that can only be combated by deliberate and hard-fixed actions. With an increase in mortality rates across the globe, many nations remain perplexed about issues brought about by the pandemic. And as a matter of urgency, people affected by the virus need adequate support. There is also a need to create a vaccine to combat death rate and stabilize activities across the globe.

Besides the direct effect of the virus on human lives and livelihoods, it is also essential to consider its impact on the industrial and economic facets of various nations around the world. And that wealth-management systems have also been hit by the pandemic sheds more light on why firms need to come up with practical and strategic responses to the situation.

In light of the COVID-19 pandemic, wealth-management businesses are currently faced with two different circumstances. First, they can procure updated digital plans that may include educating their customers on how to maximize their digital extensions. Secondly, the pandemic undoubtedly presents wealth-management firms with a temporary problem of customer inactivity.

Considering that the degrees to which clients would utilize digital service will inevitably differ, wealth management firms should seriously consider providing digital strategies and action points for their clients.

If investors are going to be reassured of their investment portfolios with wealth-management firms, a strengthening of engagement metrics would be necessary.

The Evolving Role of Wealth Managers

Wealthy investors would want to have updated details of their investments, alongside other conditions such as maintaining market neutrality in the face of high uncertainty. To keep clients feel reassured of the status of their investments, firms must take strategic actions to arrest any worries.

If investors are going to be reassured of their investment portfolios with wealth-management firms, a strengthening of engagement metrics would be necessary. Firms should consider improving their online presence and be more in touch with the pulse of the market. They can also equip portfolio managers with sophisticated communication tools like investment notes, video content and podcasts to deliver investment policies and philosophy to clients. When contacts are made continuously from the company’s leadership (relationship and portfolio managers) to the client, clients get to be reassured of the financial status of the firm.

Consistent communication among firm’s leadership is also highly important. Given the importance of relevant updates to clients’ portfolios, managers must keep updated tabs on the market fluctuations. Meetings for portfolio update can be integrated into the workflow of the wealth managers – and must be done consistently. These are necessary for understanding the impact of the change on clients’ investments. 

Relationship managers are basically at the core of the relationship between wealth-management firms and their clients. They are to possess detailed knowledge of clients’ portfolios and be able to rebalance them for improved security and sustainability. Relationship Managers may also have to be guided by tax professionals if clients are going to have all their tax-related concerns addressed.

Wealth management techniques and tools can be harnessed to keep relationship managers updated about clients’ portfolios. And relationship managers could increase their reliability by test-running their methods of analysis – mainly their automated rebalancing processes – before implementation.

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>> To read more about this story and other exclusive features about the global private banking landscape, download the latest issue of Global Private Banker Magazine HERE.

The Risks and Rewards of Going Cashless in a Digital World

The Risks and Rewards of Going Cashless in a Digital World

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries in the world with the highest volume of cashless transactions. Elsewhere in the world, the cashless revolution is being spurred by fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square. These corporate giants have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

Even as we grapple with the factors that are going to affect our move towards a cash-free society, the pros and cons of living in such an idyllic world must be carefully weighed.

“Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

BENEFITS:

Convenient Payment Locally and Internationally

Aside from avoiding the hassle of not being able to avail of desired products of services for lack of cash in your pocket, going full cashless also allows you to leave any worries behind when you travel. You don’t need to worry about exchange rates or currency withdrawal as your mobile device could handle everything for you.

Reduced Illegal Activities

Cash is always the preferred medium in many illegal transactions as it provides no money trail and every person involved in the transaction can go completely anonymous. Those days could end in a cashless society. As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

Increased Safety and Security

Carrying cash around entails risks and makes you an easy target for criminals. Once cash has been taken away from you, it now becomes a criminal’s possession which can be spent without any trace that they were yours.

Printing Money Costs Money

Going cashless is not only convenient, it also saves money. Printing coins and bills have costs. Storing those bills and moving them around have costs. Even storing them costs money. Businesses that churn a lot of cash have to deposit them, withdraw them and keep moving in order to keep the business going. All of these problems will go away once we get rid of the physical cash.

As automatic paper trails are created, illegal gambling, drug operations and money laundering could be a thing of the past as a clear record of transfer of ‘money’ will exist, serving as a deterrent to lawless elements.

RISKS:

However, depending on how you look at it, going cashless can actually entail more risks than benefits. Some of these are:

Full Access to Funds Might Not Be Guaranteed 

Once you become dependent on technology to get access to your funds, then problems such as glitches, virus, computer error, and even innocent mistakes could prevent you from being able to spend your money. Moreover, merchants that encounter compatibility issues or system malfunction may not be able to accept your payment even if you have enough funds to do so.

Additional Charges by Payment Processors

Moving to a cashless society might entail selecting a few payment processors to handle payment transactions. These payment processors are companies that have invested time and resources to create a product that could handle the task. As such, some form of fees must be implemented in order to recoup their investment. The resultant effect could be higher total cost of transaction instead of savings, purportedly touted due to less cash handling.

Increased Privacy and Security Concerns

Regardless of the amount of encryption, security and safeguards being implemented, electronic payment always entails risks of mishandling data. With the amount of information that will be generated with the continued adoption of electronic payment, malicious elements will be harder at work to get their hands on these data. On the contrary, cash transactions are always anonymous – and to some degree, safe.

Your Funds Can Be Hacked

While there is zero chance that a robber or a pickpocket could steal from you, hackers could actually do you more damage. It’s not unlikely that if someone is targeted by a particular hacker, his funds could be dried up, leaving you with absolutely nothing in your account at all. Even if there are some form of paper trail, restoring your funds after a breach could be complex and time-consuming.

Will cashless ever be possible for all?

If history has anything to teach us, it is that the world is constantly evolving. With the rise of e-commerce and digital payments, it is not impossible to say that physical currencies will soon be obsolete. What’s important to note is that every country in every region are moving towards this ideal at their own pace. The march for progress continues. For now, we have credit or debit cards, mobile payments and crypto/digital currencies that give us hints as to how a cashless society might evolve. Who knows? Something even more revolutionary might come along.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

3 Factors That Will Accelerate the Cashless Revolution

3 Factors That Will Accelerate the Cashless Revolution

The COVID-19 pandemic has spared practically no one. In all corners of the world, with people from all walks of life, everyone is talking about a new normal, barely less than a year after the crisis starts. One of the most hotly debated topics of late is whether we are now heading towards a fully cashless society. Will 2020 mark the start of a process when we completely banish cash as a medium of value exchange?

Since about 960 AD, when the earliest known paper money began circulating in China, the thought of eliminating cash, in favour of electronic or digital medium, had been inconceivable. Ironically, these days, China is one of the leading countries with the highest volume of cashless transactions. From food to clothing to the latest gadgets and games, people, regardless of age or social status, are using some form of digital medium to pay for goods and services in China.

China is truly a trailblazer in the “cashless” movement. According to figures from eMarketer, “mobile payment users in China will represent 61% of the 947.1 million proximity mobile payment users worldwide.” Furthermore, 577.4 million people in China made a purchase via proximity mobile payment within a six-month period in 2019. “Those users account for 49.6% of the country’s population,” says eMarketer.

This astounding growth is enabled by leading Chinese fintech firms, Alibaba (Alipay) and Tencent (WeChat Pay). Reports from Forbes revealed that “Alibaba’s revenue grew 144% over 2017-2019 to $56 billion.” Meanwhile, Tencent reported a total annual revenue of nearly 377 billion yuan in 2019, an increase by 20 percent compared to the previous year,” according to figures from Statista. Surely, the rate of growth of these companies is reflective of the Chinese population’s fondness for digital medium.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days.

This cashless revolution is no doubt going to be further accelerated by the COVID-19 pandemic. In fact, many fintech firms and online payment platforms such as PayPal, Venmo, Stripe and Square have never been busier these days. Merchants are now scrambling to provide digital payment options to customers who seek to avoid, or are simply unable to, pay cash. “Our products have never been more wanted and needed,” said PayPal CEO Dan Schulman in light of the report that PayPal is signing up around 250,000 customers a day with 7.4 million customers activated during April period.

PayPal added that it was growing across all markets including those most impacted by the coronavirus pandemic such as Spain and Italy.

Factors that will affect drive towards cashless society

While all signs point to an inevitable shift to a cashless society, there are real and significant issues that must be addressed first before we declare the death of cash. Some of these are:

Technology

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data. In addition, China has also invested significant amount of resources to develop e-RMB, the first digital currency operated by a major economy. Through and through, technology has played a central role in mounting these efforts.

Similarly, in Sweden, a group of six large Swedish banks have joined together to develop Swish, a mobile payment system that boasts of more than 6.5 million users as of 2018. Today, Swish is used by almost all merchants in Sweden as the de facto payment option along with payment by card. Payment by cash, in fact, will earn you some frown as almost very merchant prefers card or payment by Swish mobile app.

In the US, the charge is being led by unicorn fintech companies that have found a way to embed their technology into the lives of online customers locally and abroad. Famous global brands such as Under Armor, Target, Lyft, Grab, Deliveroo, Facebook, Google and Uber, for example, are all using Stripe, an online payments processor for internet businesses.

Turning the dream of a cash-free society depends largely on technological readiness. It can be argued that China’s success in the widespread use of digital payment medium is underpinned by its success in setting up an infrastructure that allows collection and processing of enormous amounts of data.

Culture

For a cashless society to truly thrive, there must be a widespread shift in cultural norms. Whereas some societies have generally been more open with new technology and innovation, some communities are averse to digital technology because due to the inherent security risks involved. Moreover, the digital divide between the highly industrialised and developing nations couldn’t be denied. As such, customs and beliefs among the population on what constitutes ‘value transfer’ may be hard to shift.

Government

Governments, and people’s trust in them, play a crucial role in pushing the agenda of a cashless society. A purely digital value exchange requires management and security of enormous amount of data. Hence, the population must be able to see that the ultimate custodian of their financial transactions, are trustworthy and capable. Perhaps it would be good to start building momentum by capitalising on familiar government-led initiatives such as smart-nation. By touting the benefits of smart-nation, an argument for a digital value exchange on a national level can be made.

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>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

COVID-19 Pandemic and The Era of Responsible Banking

COVID-19 Pandemic and The Era of Responsible Banking

An industry that has been able to weather crises such as SARS, Ebola, 9/11, Asian financial meltdown and of course, the 2008 financial crisis, otherwise known as The Great Recession, is nothing less than resilient. Amidst the ongoing uncertainty brought about by the COVID-19 pandemic, the banking industry is once again facing an enormous challenge, the likes of which are totally unprecedented in scale.

Instantly, the impact on the economy started to reverberate across all regions. According to The Center for Global Development, an international think tank that focuses on international development, “travel restrictions and lockdowns imposed to contain the spread of COVID-19 continue to impact the economic outlook for low- and middle-income countries.”

In Asia and the Pacific, economic growth is expected to decline by 2.7 percent in 2020 (down from last year’s 3.6 percent growth) and is seen as the most significant fall since the near-zero growth rate logged in 2009 during the global financial crisis, according to APEC. In addition, Asia-Pacific will also see a 50% decrease in passenger demand this year compared to last year. As a result, airline passenger revenues is estimated to record a revenue decline of $113bn compared to last year.

DBS, Southeast Asia’s largest bank, reports a 29% drop in first-quarter year-over-year net profits, setting aside $772.5 million “to cover potential losses from the coronavirus pandemic.”

Meanwhile, Latin America may experience a contraction of income between 11% and 22% according to a simulation by the Bank of Spain. Moody’s predicts a 6% contraction for Argentina’s economy for 2020, 5.2% for Brazil and 7% for Mexico.

Brazilian government minister Salim Mattar estimates that “the unemployment rate in [Brazil] may even double due to the impact of the coronavirus crisis on the economy.”

Not spared from economic shocks, Africa’s growth is also estimated to slow to 1.8 percent in the best-case scenario or to contract to -2.6 percent in the worst-case scenario from the 2.9 percent in 2019 and the pre-pandemic 2020 forecast of 3.2 percent, according to The United Nations Economic Commission for Africa.

Overall, the World Bank warn that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.”

“Global poverty — the share of the world’s population living on less than $1.90 per day — is projected to increase from 8.2% in 2019 to 8.6% in 2020, or from 632 million people to 665 million people,” World Bank adds.

Overall, the World Bank warns that “COVID-19 is likely to cause the first increase in global poverty since 1998 when the Asian Financial Crisis hit.

The Era of Responsible Banking

Since 2008, in the aftermath of the global financial crisis, banks have made significant steps to take action and create products that are better aligned with the social and environmental values of the clients, not just because regulators have demanded it, but because society expects it. Moreover, it has proved to be beneficial to the bottom line.

Formally, this is now known as Principles for Responsible Banking (PRB). The Principles for Responsible Banking were launched by 130 banks from 49 countries, representing more than USD47 trillion in assets, on 22 and 23 September 2019 in New York City, during the annual United Nations General Assembly.

At the end of March 2020, as the world sees the rapid spread of COVID-19, the PRB group called on its signatories to take action to support society and businesses in this unprecedented crisis. More than 150 banks joined the call and were in fact, doing more than what their governments are asking them to do when it comes to supporting small businesses and unemployed individuals.

The examples of how banks are helping societies during the collapse of an economy is aplenty.

For example, in the US, banks have become the predominant channel for its Paycheck Protection Programme, a $659 billion aid programme for small businesses. US regulators have also eased restriction to allow banks to tap into their capital reserves so they can continue lending.

In Switzerland, regulators and banking institutions worked together to provide loans for businesses who only need to fill out an online form and if approved, the loan could be disbursed to their accounts the next day. Likewise, in South Africa, filling in a form is not even needed as banks were allowed to adopt ‘opt-out’ models making it easier for loans to be extended. And in China, banks worked closely with regulators so loans and extensions could be fast tracked.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions.

Elsewhere, in The Netherlands, ABN Amro has extended an automatic six-month deferral on payment of principal and interest for clients with a credit facility of up to 50 million euros. And in Singapore, DBS Bank is allowing credit card holders to roll repayments into a single loan, effectively cutting rates from more than 20% to high single digits.

In mounting these unprecedented efforts to help societies, as well as prevent further deterioration of economic gains, global central banks are also stepping up to the plate and taking decisive actions. Through various measures such as rate cuts, liquidity support and easing of financial policies, the world’s central banks are playing a crucial role in preserving economic stability during this crisis.

Commitment to Move Forward

While the proverbial light the end of the tunnel may not be very clear in sight yet, COVID-19 and its impact already highlight the importance of keeping sustainability and responsibility at the forefront of banking agenda. Banks that have been committed to responsible banking are seeing good progress and are in fact, dealing better with the COVID-19 crisis.

Through the Principles of Responsible Banking, understanding the needs of all stakeholders becomes a paramount concern, and as such, it allows decision makers to understand the potential impact of any decision during a crisis.

However, any principles and proposals around responsible banking may come to naught if these aren’t backed by commitments and tangible targets. The new normal may come sooner than expected, or later than hoped. What’s important is to continue to look out for each other. After all, doing business is all about helping our customers and our people.

6 Steps to Secure Privileged Access for Remote Admins

6 Steps to Secure Privileged Access for Remote Admins

While many organisations already have telecommute policies and solutions in place, they are most commonly for either fully-remote workers or for employees who typically work in the office but need flexibility for unusual situations. The current environment most companies now face may put their remote workplace capabilities to the test.

This is most pronounced when considering security controls, cyber-hygiene, and reducing risk exposure that a more remote workforce creates. Are organisations prepared for such a distributed workforce and the potential risks that come with it?

When it comes to IT administration teams, outsourced IT, and third-party vendors who might have privileged access to systems and infrastructure, they need secure, granular access to critical infrastructure resources regardless of location and without the hassles of a virtual private network (VPN). Ideally, how privileged users access these systems shouldn’t be different, regardless of whether they are in an on-premise data center or accessing remotely.

Ditch the VPN

Last year it was reported that Citrix was breached through a password spraying attack that also sought to leverage VPN access. ARS Technica also reported last year that energy companies have specifically become targets of attacks that use password spraying and VPN hacking.

Unlike a VPN that generally gives users visibility to the entire network, organisations should only grant access to resources on a per-resource basis. This gives privileged internal IT admins access to only as much  infrastructure as necessary, while limiting access by an outsourced team to only the servers and network hardware their role requires.

Privileged users should authenticate through Active Directory, LDAP, or whatever the authoritative identity store is, or grant granular, federated privileged access to resources for business partners and third-party vendors.

Guard against cyber-attacks by combining risk-level with role-based access controls, user context and MFA to enable intelligent, automated and real-time decisions for granting privileged access to users who are remotely accessing servers, on password checkout or when using a shared account to log into remote systems.

Unlike a VPN that generally gives users visibility to the entire network, organizations should only grant access to resources on a per-resource basis.

Secure Privileged Access for On-Site and Remote Administration

Here are six ways any organisation can create consistency in their privileged access management (PAM) approaches to secure remote access to data center and cloud-based infrastructures through a cloud-based service or on-premises deployment.

  1. Grant IT administrators secure, context-aware access to a controlled set of servers, network devices and Infrastructure-as-a-Service (IaaS).
  2. Enable outsourced IT without the need of including administrators in Active Directory.
  3. Control access to specific data center and cloud-based resources without the increased risk of providing full VPN access.
  4. Secure all administrative access with risk-aware, multi-factor authentication (MFA).
  5. Single secure access point for administrators to manage infrastructure using shared accounts or their own Active Directory account.
  6. Enable secure remote access to data center and cloud-based infrastructures for internal users, third party vendors and outsourced IT through a cloud service or on-premises deployment.

Many organisations may think they are ready for a larger remote workforce, including privileged administrators. But relying on VPNs rather than maintaining consistent security processes, policies, and postures will create more exposure and risk. Step up your secure remote access game and enable intelligent, automated, real-time decisions for granting privileged access.

>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

The State of Open Banking in 2020

The State of Open Banking in 2020

Open Banking has quickly leapfrogged from a mere concept some two years ago, to almost an inevitable reality today. In 2020, we expect a further acceleration of its adoption spurred by aggressive moves and consolidation by the dominant players in the banking industry.

What started with PSD2 regulation in Europe in 2018, Open Banking is now being adopted in various regions around the world such as Australia, several parts of Asia, Latin America and many other regions. PSD2 or the second Payment Services Directive, is designed by the countries of the European Union which aims to revolutionise the payments industry. Its goal is to break down the bank’s monopoly of their user’s data and allow third-party merchants to retrieve your account data – with your permission – for the purposes of providing better and more efficient customer experience.

What started with PSD2 regulation in Europe in 2018, Open Banking is now being adopted in various regions around the world.

As security is a key concern and one of the most important issues to be addressed for open banking to be truly successful, PSD2 requires stronger identity checks when paying online and will likely involve even more checks when high value transactions are involved. At this point, the specifics are still being ironed out and various countries are in various stages of implementation but suffice to say that it has now reached a stage when the early movers will reap the most benefits and the laggards will be left behind by their competition.

The State of Open Banking in 2020 2

Who Owns Your Financial Data?

In the age of digital banking, the open banking movement is raising a very important question, an answer to which spurs far-reaching consequences: Who owns banking data?

For the longest time, traditional banks have maintained custody of their customer’s banking data, putting up infrastructure and investing in resources to safeguard that data. Now that consumers have the ability to quickly move their money through so-called fintech apps, access to that data serves as a key enabler to make it happen. In the US, start-ups like Plaid and Teller are leading the charge.

According to reports, Plaid, a “San Francisco-based start-up, founded by two former Bain consultants, connects bank accounts to thousands of apps and helps consumers develop a complete picture of their financial data. The company, valued at $2.7 billion, has attracted investments from the venture arms of Goldman Sachs, Citi, Google and American Express.” Basically, it develops APIs to make it easy to share banking and other financial information.

Plaid powers the majority of fintech apps in the U.S., including the popular app Venmo, and is rapidly expanding overseas. It is so successful that financial giant Visa, announced “a $5.3 billion acquisition of Plaid,” which was announced at the beginning of 2020.

One of Plaid’s competitors, Teller, has also embarked on the same open banking mission. According to report, the fintech start-up has “quietly raised $4 million in seed capital from a slew of U.S. investors.” It comes to a market with a better proposition saying that, “unlike Plaid, Teller’s technology is not built using screenscraping, and therefore is “more reliable and performant,” said Teller co-founder Stevie Graham in an interview with TechCrunch.

“The open banking movement is raising a very important question: Who owns banking data?”

Open Banking Around the World

The US is far more advanced though compared to other countries when it comes to open banking. While the UK and Europe has been the so-called frontrunners, implementation and compliance with set deadlines still remains a challenge. In other parts of the world, a softer, non-disruptive approach is being taken to ensure everything proceeds smoothly. Here’s a snapshot of what’s happening elsewhere in the world (source: Open Banking Report 2019)

Australia

The Australian Government had decided to phase in Open Banking – consumers can direct the major banks to share credit and debit card, deposit and transaction data from July 2020, and mortgage and personal loan data from November 2020.

Singapore

The Singapore Government is committed to an organic transition towards Open Banking, more than a coercive framework of deadlines. The Monetary Authority of Singapore (MAS) encourages financial institutions to adopt APIs as a key foundation layer for innovation. Along these lines, together with the Association of Banks in Singapore, MAS launched a Finance-as-a-Service API Playbook. With the Finance-as-a-Service API Playbook, banks have a common guide to identify and develop APIs.

Hong Kong

The monetary authority released a report on open APIs, a first step for the development of the ecosystem, with recommendations on standards and protocols, as well as an implementation schedule.

Japan

The government and industry are collaborating on a commitment set by Prime Minister Abe for at least 80 banks to establish open APIs by 2020. Amendments to Japan’s Banking Act in June 2018 established requirements for partnerships between fintech payment operators and financial institutions, aiming to formalise registration rules, standards, and the development of open API systems by June 2020. This focuses initial open API requirements on the payment industry, as part of a broader push to increase the role of non-cash payments in Japan.

Malaysia

In January 2019, the BNM (Bank Negara Malaysia) released its Policy Document on Publishing Open Data using Open API (the Policy Document), which set out the BNM’s guidance on the development and publication of Open Application Programming Interface (Open API) for open data by financial institutions. The BNM aims to encourage open banking through the use of Open API, which enables third-party developers to access data without needing to establish a business relationship with financial institutions. While not mandatory, financial institutions are encouraged to adopt Open Data API Specifications recommended by the Open API Implementation Groups for credit card, SME loans and motor insurance products.

Mexico

Implementation is not expected until the secondary dispositions of the fintech law are due in March 2020. Implementation will likely take place in phases, with the first phase requiring a regulatory sandbox to test Open APIs. Regardless, Mexico’s embrace of Open Banking pushes its fintech sector further ahead of most other countries in Latin America.

Switzerland, Indonesia, and China have also initiated moves towards Open Banking. However, adoption remains limited.

South Korea, Bahrain, Brazil, Canada, and Thailand are chasing closely behind as fast followers.

At the earliest stage of development are the US, Chile, Nigeria, Kenya, and Rwanda.

The State of Open Banking in 2020 1

Open Banking Initiative On A Bank Level

While several strategic initiatives are happening at a macro level, banks are taking their own initiatives to move ahead and win in a world where Open Banking is the norm. One of which is Taiwan’s Taishin Bank, Winner of Best Open Banking Initiative at the recent Global Retail Banking Innovation Awards 2019.

Taishin Bank’s Richart was developed as an open bank, which integrates all the services that customers need in one platform.

From account opening, saving money, investing, to foreign currency exchange, Richart and its partners created a user-centric digital environment to respond to users’ expectations, providing customers with more innovative and complete financial services with partners from different industries, including the telecom company, FinTech start-ups and insurance companies.

Through its strategy, Taishin Bank conquered three major pain points of its customers:

Information isolation

In the past, customers need to fill out replicated application forms when they apply for different financial services. To save time for customers, Richart used open API to transfer customers’ information between different partners and help customers fill out forms automatically. Once customers become Richart members, they will no longer need to fill out forms when they apply for other financial services on Richart App. By simply clicking a few buttons, customers can easily complete their application of various financial services such as insurance purchasing, foreign currency exchange, and investing.

Service isolation

Taishin Bank provided customers with a service that meets all their needs in one versatile platform. Customers in Taiwan usually have 5 or 6 different accounts to manage different services such as insurance, foreign currency, investment etc. – but with Richart, they only needed one account. Customers no longer need to memorise several different accounts and passwords. In addition, they are able to manage and keep track of different financial products in one App and one account.

Channel isolation

Taishin Bank has also extended Richart’s financial services to LINE, the most popular instant messaging APP in Taiwan, allowing more than 6 million customers to enjoy its services more easily and conveniently. With this breakthrough, customers can now enjoy financial service to check their transactions and reach out to Richart customer service through a common channel they use every day without logging in the banking App.

Through the competitive and integrated products Richart provides with its partners, they have attracted more than 1,400,000 applications for Richart’s saving accounts – more than 70% of them are aged 35 or under, and more than 74% of them are first-time customers for Taishin Bank.

Also, via the partnerships with FinTech startups and companies from different industries, they were able to provide their customers a more complete financial services without building up a whole new system. Costs related to system infrastructure, maintainance, and labour have been reduced by 30%.

As such, Richart has become the most popular digital bank in its market. According to a 2018 customer satisfaction survey, over 95 % of its customers showed high satisfaction and strong willingness to continuously use Richart and recommend it to their friends.

Open Banking Will Make You Win

The old rules of banking don’t apply anymore. As digital banking grows and fintechs continue to introduce innovation to the market at a breakneck speed, embracing this brave new world of open banking will prove to be a long-term win, even for traditional banks.

According to a survey by Accenture, 90% of bankers believe open banking will boost organic growth by up to 10%. That does not mean though that it will be a smooth ride. Indicators coming out of European banks reveal that resistance among incumbent banks will be great and that change might come slower than what’s ideal or is required. The onus will be on those banks who can see the future before it happens and are bold enough to take action, now. The future is open. Wide open.

90% of bankers believe open banking will boost organic growth by up to 10%.

>> To read more about this story and other exclusive features about the digital banking landscape, download the latest issue of The Digital Banker Magazine HERE.

Standard Chartered Korea’s ‘Leapfrog’ amongst the Best of the Best

Standard Chartered Korea’s ‘Leapfrog’ amongst the Best of the Best

Over the past year, the Standard Chartered Korea digital team and group team have worked tirelessly in developing an all new and next-generation mobile app – one it can be immensely proud of.

Known as ‘leapfrog’ the relatively new mobile app was awarded Best User Experience – Mobile at the Digital CX Awards 2020, hosted by The Digital Banker.

The Digital CX Awards is a gathering of the best-in-class worldwide banks that are recognised as pioneers at the cutting edge of customer experience innovation. Co-judging by subject matter experts from EY, KPMG, Bain & Company, Forrester and Wipro Digital augments this remarkable achievement for Standard Chartered Korea – especially amongst such avid global competition.

Best User Experience – Mobile

The new mobile app adorns an aesthetically pleasing user interface and offers users a state of the art mobile experience that dramatically simplifies the way customers manage their finances on the go. The all new and next generation version of the SC Mobile App delivers a reimagined ‘3.0’ experience which represents a quantum leap and a new global standard in digital banking. Many of the mobile app’s exciting new features are trailblazers in their own respect and allow Standard Chartered Korea to boast first to market status.

It’s all About the Metrics

The bank’s digital sales regained momentum post launch, with Digital Retail and Wealth products rising 44% and 36% against the Q2 2019 average. Subsequent to launch – App downloads stood at 1M, as of 2nd March 2020 and continues to grow. Eight hundred thousand clients currently actively use this feature with the number of users continuing to grow.

Multi-aggregation Technology

Standard Chartered is the first bank in Korea to have launched a mobile app affording customers an easy way to get a snapshot of their finances through multi-aggregation technology. This tech enables customers to monitor their entire financial portfolio at other financial institutions.

Further user benefits come in the way of money transfers, which the new app has made exceptionally easy: a simple sliding gesture to transfer money allows customers to send money directly to their friends via contacts or KakaoTalk messenger, the no.1 messenger app in Korea all this without requiring their bank account information.

Everything in One Place

Standard Chartered Korea’s multi award-winning ‘Self Bank’ app, mobile sales and onboarding app- designed for non-face-to-face digital interactions- and digital wealth capabilities have been combined into the new mobile app. The result for the end user is end-to-end customer journeys from real-time onboarding and retail products purchases, to day-to-day transactions and wealth tracking.

Enhanced Security and Access

The bank set out to create new ways to authenticate its customers for easier access with greater security. Customers can now choose their preferred way of accessing the app among various digital authorisation technology, such as fingerprint, face recognition, iris recognition, mobile token and a blockchain based digital certificate.

The Challenger Landscape in Korea

Challenger banks and fintech players in Korea began establishing their businesses in 2017. Similar to the vast majority of challenger banks across the world- the offering is a pure-play mobile / online banking application with an innovative UI/UX, combined with simplified processes. There are a select number of challenger players that have recently achieved a level of success in Korea’s digital banking space. Such success can almost undoubtedly be attributed to the increasing trend of the Korean mobile market moving towards a single integrated mobile application.

With an accurate assessment of the threats posed by such challengers, Standard Chartered Korea’s response was to create something that is meticulously designed and engineered for the new digital age. The bank’s team purposefully refined every detail from the ground up to provide customers full control of their finances in a single application. The new mobile app signifies a tremendous step toward the bank’s goal of providing superior user experience.

Read more about the winners at the Digital CX Awards 2020 here.

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Standard Chartered Private Bank Ushering Digital Transformation in Private Banking

Standard Chartered Private Bank: Ushering Digital Transformation in Private Banking

Transforming banking experience for private bank clients is easier said than done – but with Standard Chartered Private Bank, consider the matter resolved. Being one of the most innovative and forward-thinking banking organisations around, SC Private Bank continues to challenge conventional thinking, and as a result, reaps rewards and accolades for its wealth of services, including some of the most coveted awards around customer experience at the Digital CX Awards 2020 by The Digital Banker.

Among the awards received by the team are: Winner, Best Private Bank for Customer Experience and Best Digital Customer Experience in Private Banking; Highly Acclaimed, Best Product or Service Innovation and Best Use of Technology for Customer Experience – Overall. These awards are truly a mark of excellence as SC Private Bank had to compete with more than 200 nominations in various awards categories.

“The app was conceptualised through a strong collaboration between business, technology and design teams.”

The win was even more remarkable considering the judges at this year’s awards ceremony include highly reputable industry experts from companies such as Forrester, EY, Fuji Xerox, Bain & Company, Wipro Digital and KPMG.

“Our vision is to transform the existing online experience for Private Banking clients.  In addition to viewing their portfolios, we want clients to be able to interact securely with their Private Bankers, get investment publications, and authorise transactions digitally.  We are making steady improvements and feel honoured to be recognised for our progress so far” said Jonathan da Silva – Head, Strategic Initiatives and Analytics, Private Banking.

SC Private Bank App – Advanced Client-Banker engagement platform

The SC Private Bank App aims to transform the existing internet banking experience for private bank clients from a portfolio view tool to an advanced Client-Banker engagement platform. Besides viewing their portfolios or past transactions, clients are able to interact with their Private Bankers and share information securely via chat within the bank’s mobile application. They can do so using their mobile, tablet or web devices, allowing them to discuss investment ideas and exchange views with their private banker on-the-go.

When chatting with their private banker, Clients can snap, and share documents directly to their bankers through the app. This means clients can now submit client instructions to their private banker through the SC Private Bank app via chat for investment trade execution. They can also receive the latest publications or market views on the go and organise them into folders for ease of management.

Through this initiative, SC Private Bank has seen tremendous business value by way of increased usage of the platform (+30%) and improved client and RM satisfaction across multiple locations. Clients have reported positive experience with the app as it has been updated with the latest tools such as biometrics login capabilities, eStatement and eAdvices retrieval, secured document sharing and RM chat and more.

“Clients are now able to send messages or documents via chat securely through SC Private Bank’s platforms, which are stored within the bank’s servers.”

The app was conceptualised through a strong collaboration between business, technology and design teams. Overall time to market took 6 months from conceptualisation, design, build and launch. From a risk management angle, clients are now able to send messages or documents via chat securely through SC Private Bank’s platforms, which are stored within the bank’s servers. Sensitive files or documents can be shared securely within the bank’s infrastructure instead of relying on e-mails to external domains.

Summary of enhanced capabilities:

  1. Secure Communication Tools. In-app secure Chat capabilities between RM and Client to share trade ideas, investment publications and other documents
  2. Enhanced Mobile Capabilities. E-statement and e-advices self-retrieval on mobile and tablet devices
  3. Enhanced Portfolio Views. Consolidated portfolio views across multiple booking centres with breakdown of asset allocation and liabilities
  4. Increased Mobility for Front Office. Launch of Private Banker App on Corporate Phones For front office to get access to client portfolios on-the-go
  5. Improved Risk Management. Surveillance capabilities on RM-Client messages

Since the launch of the new web and mobile application, SC Private Bank has recorded significant benefits, including:

  • Average monthly logins increased by 30%globally across SG, HK, UK and UAE
  • No. of clients opting for paperless increased by 15%
  • Marginal increases of 4% in client adoption rates across all locations
  • More than 70% of polled clients (950 Clients) rated at least 4 of 5 stars within the app on web and mobile

Read more about the winners at the Digital CX Awards 2020 here.

Image: photobyphm / Shutterstock.com

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NETS Click - hero

NETS: Innovating Through Consumer-Centric Design

Founded in 1985 by a consortium of local banks, Singapore electronic payment service provider NETS, has gone leaps and bounds in advancing the adoption of electronic payments in Singapore. Its latest innovation, NETS Click enables the digitisation of NETS Bank Cards on third party merchant mobile applications for secure seamless payments. And for that, they’ve won much-deserved awards.

Having been honoured Highly Acclaimed, Best Customer Experience – Debit Card and Outstanding Customer Experience for Digital Payments at the Digital CX Awards 2020 by The Digital Banker, NETS continue to innovate through consumer-centric design.

The prestigious awards, running on its second year now, received more than 200 nominations for various awards categories. Getting through successfully is an accomplishment as this year’s panel of judges include subject-matter experts known for their integrity and unbiased adjudication from companies such as Forrester, EY, Fuji Xerox, Bain & Company, Wipro Digital and KPMG.

“NETS is in the business of making transactions more convenient and simpler for everyone. In line with Singapore’s push to become a cashless society by 2025, we are proud to introduce NETS Click as a new in-app payment option for commuters to pay for their ComfortDelGro taxi rides in a quick and seamless way. NETS Click has successfully addressed the monumental challenge of delivering simplicity on top of advanced technological enablers and for that, we are extremely delighted,” said Kenny Lee, VP, VAS & Partnership, Merchant Products & Partnership at NETS.

NETS Click – secure seamless payments to third party merchants

NETS Click enables the digitisation of NETS Bank Cards on third party merchant mobile applications for secure seamless payments. The product was conceived and built in-house with a lean project team comprising cross-functional domain experts from product, technology, security and compliance teams. The design is aligned to concepts of EMVCo’s Secure Remote Commerce (SRC) and fulfils equally stringent industry security requirements.

NETS Click features a highly advanced security design incorporating multi-layered mobile digital security, EMV-based tokenisation technology, bank card and consumer verification methods. Most importantly, it was developed with a human-centred product design. The result is a simple and friendly user journey incorporating advanced mobile runtime threat detection coupled with host-based AI-driven fraud and security monitoring.

Merchants enabling NETS Click on their mobile applications are able to retain payment transactions that would have otherwise dropped off due to less seamless check-out experiences.

Despite the complex technical implementation and intricate project management to align across multiple workgroups comprising banks, partners and internal stakeholders, the project team launched NETS Click without delays and within planned budget.

Commercially launched on 1st Nov 2019 with ComfortDelGro taxi, NETS Click has contributed close to a 10% increase in NETS total transaction value from ComfortDelGro in just a matter of 30 days from launch.

Teamwork works

Before NETS Click’s success, the team had to overcome complex challenges. One of the most significant challenges that the project team faced was to create a product that delivers simplicity in design, despite running on complex and advanced technological enablers. The NETS Click project team successfully rolled out a one-time registration step that is even simpler than existing payment details entry process by other payment providers.

After registration, NETS Click essentially eliminates the need for consumers to fill out tedious payment details forms during the check-out process, replacing it with a seamless one-click payment experience.

Merchants enabling NETS Click on their mobile applications are also able to retain payment transactions that would have otherwise dropped off due to less seamless check-out experiences. The enhanced consumer experience also helps merchants drive consumer retention, usage and loyalty.

Read more about the winners at the Digital CX Awards 2020 here.

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IndusInd Bank Making Customer Onboarding a Win-Win Proposition

IndusInd Bank: Making Customer Onboarding a Win-Win Proposition

A brand is defined by its customers’ experience. Going by that principle, India’s IndusInd Bank is clearly one powerful brand. Proof of this is the remarkable onboarding program the Bank has implemented for affluent customers. This digital onboarding journey helps new customers navigate seamlessly – from initiation to account set-up, all the way to the first 90 days of engagement with the bank. As such, IndusInd Bank was adjudged the Winner for “Outstanding Digital Customer Experience – Customer Onboarding” at the Digital CX Awards 2020 by The Digital Banker.

The prestigious summit and awards, running on its second year now, received 200+ nominations for various awards categories. Its panel of judges include subject-matter experts known for their integrity and unbiased adjudication from companies such as Forrester, EY, Fuji Xerox, Bain & Company, Wipro Digital and KPMG.

“At IndusInd Bank, we constantly strive to leverage on the latest technology in order to bring forth path breaking solutions for our customers. The successful execution of the digital on-boarding program is a testament to this effort. This award reaffirms our vision to create and transform key customer journeys and make them more Seamless, Easier, Faster and Transparent,” said Sumant Kathpalia, MD, CEO for IndusInd Bank.

Mr. Sumant Kathpalia MD, CEO for IndusInd Bank

Mr. Sumant Kathpalia MD, CEO for IndusInd Bank

The Goal – transform the Customer Onboarding process

IndusInd Bank Limited is India’s new generation bank established in 1994. The bank offers commercial, transactional and electronic banking products and services. As on 31 December 2019, IndusInd Bank has 1,851 branches/ banking outlets, and 2,721 ATMs spread across India, with representative offices in London, Dubai and Abu Dhabi.

In 2018, the bank had embarked upon a mission to evaluate and re-engineer key customer journeys based on the principle of SEFT – an acronym for Simple, Easy, Fast and Transparent. One of the customer interaction journeys that the Bank prioritised to transform was the customer onboarding process, especially for Affluent clients.

In the past, the onboarding process was tedious and complex, as it involved process handshakes and handovers between multiple functional units ranging from frontline sales to branch operations to local processing hub and finally, a central operations unit. These multiple checkpoints in the customer journey were causing some degree of drop-offs or failed conversions due to manual interventions and delays. This was also creating a non-standardised customer experience which was dependent on a paper-based process and the quality of interaction with employees at the branches.

The goal was to create an onboarding program that provides customers with a frictionless digital journey – based on the principles of SEFT – from program discovery to account setup to engagement and account activation, all within the first 90 days of the relationship.

Based on industry data, a tedious experience makes almost 20% of the potential customers abandon the account opening process midway.

Keystones of the Project Implementation

Customers don’t decide to start a new banking relationship just for the sake of novelty. Hence, the bank’s immediate goal was to provide a delightful onboarding journey when a potential customer expressed an interest to do so.

Based on industry data, a tedious experience prompts almost 20% of potential customers to abandon the account opening process midway. In a bid to create a great first impression (and higher conversion), the Bank embarked on a project to implement a digital onboarding program for its affluent customers and launched the initiative in 2019.

Based on the successful implementation, the bank is now moving towards onboarding 200,000 new customers per month through digital onboarding in this year.

They have successfully implemented a robust omni-channel onboarding program across channels, which has increased conversion rates significantly. The seamless Digital-Human onboarding has also created new business opportunities within the first 90 days of a customer’s onboarding journey. Some of the key features of the program include:

  • Enabling prospective customers to initiate their relationship journey with IndusInd Bank seamlessly across multiple channels – mobile, tablet or desktop.
  • Improving customer experience with intuitive navigation of the journey through smart form factors.
  • Avoiding unnecessary re-routing of customers to back-ended or branch-based physical channels as it acts as a journey-breaker.
  • Build compliant and reliable online identity verification that eliminates paper-based KYC.
  • Incorporating autofill of existing customer information to avoid asking the same questions from existing customers who have been using other products of the bank like standalone Credit cards / Investments.
  • Providing instant account “Number of Choice” (e,g, customer’s date of birth or mobile number) so that the customer can start using the account.
  • Providing the customers the ability to reach out to their RM and Service Manager via a direct link in the Mobile App – so that everyone knows their Relationship Team.
  • Inviting customers to explore other program benefits and services through digital campaigns which have embedded links for independent activation or assisted digital activation. Clicking these links triggers an actionable for the RM / Service Manager to help the client via an assisted digital journey.
  • Using intelligent analytics to target campaigns on cross-selling sticky products and engagement hooks like term deposits, health / home protection, credit card.
  • Simultaneous digital messaging to the customers’ Service Manager if the customer encounters any hurdles in product activation or raises a service request. The Service Manager, upon seeing the notification, presses into action to help resolve the client’s issues and take the customer forward in the onboarding journey.
  • Allowing customers able to bring their family members as well as business relationship onboard the program as a household group and enjoy the program benefits across all accounts.
  • The result is an absolute win-win – for the customer and the bank. Because of the successful implementation of its omni-channel onboarding program, there have been remarkable benefits, in terms of customer experience and business opportunities.

Benefits for Customers:

  • The A/C opening is now much more seamless, faster and error-free as the application process goes through input of client information digitally via Mobile/ Tab / Desktop based platform. The process ease has helped bring down dropout ratio of customers during account opening to almost NIL.
  • The validation process of customer’s identity moved to a biometric or mobile OTP based verification using the country’s central unique identification database system. This eliminated the need for paper-based proofs of identity-reducing the returns or rejection of applications by nearly 50% thereby bringing down customer hassle of re-submitting documents.
  • A/C opening turnaround time has been reduced from 2 days to few minutes.
  • After A/C opening, the focus has shifted to sending relevant communication to customers to help them start using their account through digital channels. An intelligent rule-engine sits on top of the legacy banking systems and using API integration, checks for customer’s profile and/or transaction behaviour. Using advanced decision science based on data, the bank sends communication to clients basis a more targeted approach. Customers now find the communication more contextual and relevant, making them read and take desired action.
  • Besides the seamless digital engagement, whenever a customer gets stuck in the process of using their account program’s features /available services, there is a team of service managers ready to help them instantly. This has helped the bank reduce drop-offs and complaints by 50%.

Benefits for the Bank:

  • The onboarding journey encouraged many prospective customers to open a hassle-free account with the bank who earlier were anxious about the lengthy documentation process. New affluent customers onboarding rate increased by 20%.
  • The customers who onboarded digitally maintained 30% higher relationship balances in their accounts.
  • Household penetration into digitally onboarded customers is significantly higher than before
  • Digital channels usage and other product conversion rates during the bank’s onboarding process have increased appreciably since this implementation.
  • This has eliminated the need for a very large manual back-end operations setup for the bank.
  • Early NPS trends indicate better results than before the onboarding implementation.

Based on the successful implementation, the bank is now aiming to onboard 200,000 new customers per month through digital onboarding in this year.

The successful execution of the program has helped the bank significantly enhance the volume and quality of new customers per month. It has also improved client stickiness, relationship deepening, and transaction intensity for new clients.

“Winning this award means a lot to us. It is not just gratifying but also encouraging for us, to continue our endeavors on this path of transforming our customers’ key journeys ever more fervently,” said Samir Dewan, Head of Affluent Banking & Customer Experience for IndusInd Bank.

Read more about the winners at the Digital CX Awards 2020 here.

Image: SNEHIT PHOTO / Shutterstock.com

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