By Bob Mudhar, Partner at Citihub Consulting.
Public Cloud Adoption. Operational Resilience. Data Management. Microsoft 365. These will be the stories likely to dominate the headlines in banking technology for 2020, as forecasted by Bob Mudhar, Partner at Citihub Consulting.
His perspective is slightly different from banktech providers since, as a technology consultancy focused on Financial Services organisations, they operate in key areas that are current, relevant and in-demand at their clients’. The following are the areas Bob Mudhar sees financial services firms investing in, either through their own internal spend or through using external providers, ISVs and banktech organisations:
The major top tier Financial Services (FS) firms are still investing large amounts of time, money and organisational willpower on cloud adoption programmes. Mostly, they are trying to move early adoption candidates into full public cloud. Here, the challenges are still on technology security and enablement issues. FS firms find that moving a single instance of something into public cloud as a bespoke effort is achievable. Converting a single handcrafted migration into a factory-style approach to migrate thousands of applications is a much more challenging task. One common theme here is the lack of real and relevant skilled resources capable of the level of automation at such huge scale.
An emergent theme in this same topic is known as “compliance as code”. Paul Jones, Associate Partner at Citihub Consulting notes, “Firms have already benefited from infrastructure as code (where software engineering techniques such as versioning, testing and automation are applied to infrastructure delivery) and they are expanding this approach to cover security & compliance, too.”
Instead of a handbook or Wiki, corporate IT policies and security standards can be written as tests, and these tests can be executed against real infrastructure by CI/CD. Compliance teams get an up-to-date view of the status of their environments, and DevOps teams get clear, implementable requirements that can be embedded into their delivery pipelines.
Compliance as code is part of a general to “shift left” on security and compliance – an effort to introduce security & compliance best practice early in the development of a solution rather than leaving it for assessment, often by a separate team, just before deploying it to production.
Finally, as firms have adopted public cloud, there is increasing attention spent on Cyber Vaulting of code and data – that is ensuring you have access to your own code and data in the event of catastrophic failure of your cloud service provider. Once this is resolved, the next step is the rehydration, or recovery, of an entire application estate.
Data management and data governance were themes in 2019 and will continue to be headline topics in 2020, with growing importance. Data ties together the cloud adoption story and the digitisation of the banking enterprise. This is because firms often see the offloading of data to the cloud as being an enabler (easier for multiple areas to access the same data, greater usage of the latest toolsets). Once data is in the cloud, it becomes a huge driver for enabling the digital enterprise – offering services to clients on any platform (from mobile through to desktop PC) and ensuring a consistent experience on any device. However, moving data to the cloud also means understanding what data a firm has and what controls they have over it.
The migration to Office 365 is far more than an application upgrade. This is because it is also a move to the cloud as some of the services will be natively on Microsoft Azure. As it will be company data that will move to the cloud, there are concerns over data integrity and security. Hence, what starts as an application-upgrade problem has become, for many banks, all about auditing what data is stored internally and how to handle it in a post Office 365 world.
The PRA has been increasing focus on operational resilience of financial service firms. This is coming from a far more holistic perspective than technological data centre and disaster recovery plans. It considers the resilience of the organisation as a whole – people, processes, and technology. There may be a role for banktech firms here to propose innovative new solutions to resilience. However, there will also be a need for forensic investigation and uncovering of operational resilience risks and how to mitigate those. Some firms have begun mobilising their responses. The recent Treasury report on TSB technology failures was another trigger point to increase strong focus on operation resilience.
There is a link here to cloud adoption. As more services are digital first, and as the retail banking customer increasingly uses a mobile device as their only interaction with financial services firms, then the resilience of the cloud platform becomes a priority entry point and therefore at the top end of critical infrastructures that need an assured level of resilience. A few years back, technology resilience would have been focused on back-office system. Now, the front portal and cybershop front are just as important.
Study of 50,000+ UK banking app reviews reveals customer ‘frictions’ among prominent retail banks
o Login and user authentication: Nearly a third (30%) of digital banking app customers had issues with logging into the app through their devices, and 1 in 5 (20%) cited problems with username and password or passcode authentication
o Customer service:
§ Nearly a quarter (24%) of customers felt like they were waiting too long for customer support
§ Over 1 in 5 (22%) were unhappy with the customer resolution
§ Over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful
o Notifications: Almost a quarter (24%) cited that the wrong operation – or none at all – was performed when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications
Today Mobiquity, a full-service digital transformation enabler, launches a ‘Friction Report to benchmark UK & NL mobile banking apps,’ identifying ‘frictions’ within the UK digital banking app customer experience.
The study of 50,000+ UK customer banking app reviews within the Google Play Store and the App store shows the main ‘frictions’ across prominent UK retail banks.
One of the key issues was with login and password authentication. Nearly a third (30%) of digital banking app customers had issues logging into the app through their devices and 1 in 5 (20%) cited problems with username and password or password authentication.
Another ‘friction’ was customer service; nearly a quarter (24%) of users felt like they were waiting too long for customer support.
Almost a quarter (24%) cited problems with notifications. Either the wrong operation was performed, or no operation was performed at all when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications.
Meanwhile, over 1 in 5 (22%) were unhappy with the customer resolution, and over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful.
Commenting on the report, Matthew Williamson, Vice President of Global Financial Services, Mobiquity said: “As the use of digital payments increases during the pandemic, so has mobile banking usage. The launch of Mobiquity’s Banking Friction Report helps banks to identify the ‘business frictions’ in their mobile banking experience to help align with evolving customer expectations.”
“An interesting observation that can be made is that most of the banking apps in the Google Play and App store score highly, but when you only account for reviews where people actually leave comments regarding an app feature, i.e. feature ratings, scores are quite low. This can be attributed to users no longer having to proactively go to the Google Play or App store to rate an app, but now are prompted to review an app while they are using it.”
“Nowadays, banks cannot risk treating their customers as passive observers, building products and features that do not take their feedback into consideration. Looping customer feedback into the decision-making process is key as banks get real-time information regarding which aspect of the app customers value the most, and where they find the most friction while interacting with the app.”
The future of offshore banking
By Granville Turner, Director at Turner Little.
Despite its misconceptions, the popularity of offshore banking is growing. Not only is it a perfectly legal way of holding your money, but with the right professional advice, it is also reassuringly simple to open an account.
This ease-of-use is prompting many offshore banks to change their offering to compete and make overseas banking even more accessible. No longer is it limited to just the super-rich.
So, what does the future look like for offshore banks? We’ve compiled a list of the top fundamental changes happening in the realm of offshore banking.
Catering to niche markets is the future
Rather than managing account holder’s money in general, offshore banks are tapping into how they can best serve different demographics. Essentially, it is about taking a more bespoke approach to managing money at various stages of life.
But catering to a variety of markets doesn’t just stop there. Many overseas banks are now accepting crypto as a form of currency to appeal to digital, tech-savvy generations.
Cryptocurrency is also attractive for those who see the security benefits it can offer.
Paper chains are fast becoming a thing of the past
As banks move away from paper in favour of digital, security is on everyone’s minds. This is because information is an important asset to many businesses, so protecting it is vital. As such, banks are securing data with the most vigorous encryption security standards.
For account holders, this means digital bank transfers and communication become less of a risk and the smarter thing to do. Paper chains are fast becoming a thing of the past.
Instant access, day or night
In today’s digital world, you don’t need to travel overseas to open an offshore bank account; everything can be done online or over the phone. And like most UK standard current accounts, many offshore accounts now offer online and mobile banking features. So account holders can manage their offshore finances and investments while transferring funds with ease.
Offshore banks are following the same route of challenging onshore banks by going branchless. This offers substantial benefits for account holders, as branchless offshore banks don’t pass on as much overhead costs to the customer. Ultimately, this means customers can earn better interest rates and other returns on their investments.
Happy to help
At Turner Little, we work closely with offshore banks to provide you with quality service tailored to your needs. With over 20 years of international banking experience and specialist expert knowledge, we will assist you with your enquiries, no matter how complex. And every account we arrange comes with internet banking, card facilities and the ability to transact internationally.
Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos
- WeLab Bank designed, built and launched using cloud-native Temenos Transact in less than 10 months
- WeLab offers next generational digital services for the 7.5m people in Hong Kong to access from their mobile phones
- Customers can open accounts remotely in just 5 minutes with bank reporting 10,000 account openings within 10 days of launch
Temenos (SIX: TEMN), the banking software company, today announced that WeLab Bank, Hong Kong’s first homegrown virtual bank, has publicly launched using cloud-native Temenos Transact to provide a range of next generation digital services for customers to enjoy 24/7 from their mobile phones. Designed, built and launched in less than 10 months, the fully digital bank has seen rapid take up with a reported 10,000 account openings within the first 10 days of launch.
WeLab Bank is powered by cloud agnostic Temenos Transact for core banking along with Temenos Analytics and Financial Crime Mitigation. Implemented on Amazon Web Services and Google Cloud, WeLab is the first multi cloud digital bank in Hong Kong. Operating on multiple clouds at the same time gives WeLab increased operational resilience and disaster recovery capability and is a regulatory requirement of the Hong Kong Monetary Authority for new digital banks. According to the Economist Intelligence Unit 2020 report for Temenos, 81% of global banking executives surveyed believe a multi-cloud strategy will become a regulatory prerequisite.
Developing a cost-effective and scalable core banking solution was paramount for WeLab. Temenos cloud native software is built for the digital age using API-first and DevOps principles and engineered to deploy in containers and microservices. This makes it easy for WeLab to scale for future business growth efficiently and eliminates the need to provision for peak processing volumes so that the bank only pays for its actual usage, yielding significant cost savings.
Critically, with NuoDB the solution delivers a cloud-agnostic, distributed relational database that enables WeLab to deploy an active-active on-demand database across multiple cloud providers with near zero downtime failover.
Temenos Transact is a preconfigured system and so requires very little coding and with Temenos model bank to address local practices and regulations, WeLab was able to bring its service to market faster and extend its innovation with more than 400 out-of-the-box APIs.
With Temenos, WeLab bank is set to transform banking in Hong Kong. In as fast as 5 minutes, customers can remotely open a WeLab Bank account with $0 monthly fees and start enjoying differentiated services such as time deposits with competitive rates, an interest-bearing deposit account with an instant virtual Debit Card, and real-time payments powered by Faster Payment System (FPS). Everything can be done on a mobile phone, simply and effortlessly.
Adrian Tse, CEO at WeLab Bank, commented: “WeLab Bank was born from an initiative to reimagine the banking experience for the 7.5 million people of Hong Kong. From the start, we knew this vision needed the most advanced cloud native technology and a partner that shared our vision for digital transformation. With Temenos we have efficiently built WeLab Bank from scratch, free from any legacies, with innovative features that proactively help customers to take control of their money and their financial journey.”
Max Chuard, Chief Executive Officer, Temenos, said: “Congratulations to WeLab Bank on the launch of their trailblazing new digital bank. Building and launching a licensed bank in such a rapid timeframe is a fantastic achievement and we are proud to have supported them in becoming the first multi-cloud digital bank in Hong Kong. Temenos cloud-native, cloud-agnostic strategy means we can satisfy the needs of the most innovative and ambitious neobanks like WeLab Bank to run on multiple cloud providers. We know this is just the beginning for WeLab and we are excited to be part of their story as they revolutionize banking for people in Hong Kong.”
Bob Walmsley, CEO of NuoDB said: “We are excited to be partnering with Temenos to help WeLab Bank achieve their aggressive launch timelines and deliver innovative banking services to its customers. We were inspired by the technical vision of WeLab and knew that executing an on-demand, multi-cloud strategy was a perfect fit for NuoDB. Our enterprise-class, distributed SQL database combined with Temenos’ cloud-native technology helps banks of all sizes around the globe migrate to the cloud to improve agility and reduce costs.”
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