By Tom Blacksell, Managing Director UKI B2B at Experian.
As of the 13th Jan, some of the largest banks in the UK are readying to bring new ways of accessing goods and services to their customers, presenting new benefits stemming from the Open Banking initiative. This will provide customers with direct access to their data, and in theory, provide consumers access to better products and services, as well as saving them time…
Simply put, Open Banking could well revolutionise the industry. It is designed to give consumers greater freedom to pick and choose the services that work for them. For banks and for consumers, Open Bank APIs are a landmark in the UK. As we drive towards a situation where individuals are more inclined to share their data, they and their service providers will be able to make higher quality decisions on affordability as more sufficient data will be available to make better decisions. This will improve the efficiently and speed of decision making which, in the long run, can only be a good thing for all parties.
For this to work, the industry will need to clearly explain just how this process should work. Clearly demonstrating a genuine value exchange and highlighting the benefits of using the process will ensure that customers begin to understand and are encouraged not to miss the opportunity. We need to make sense of the new ways in which individuals can use their financial information and what they’ll get back from it, and ensure they properly understand it too.
The quality, understanding and management of each individual’s data is vital. This will allow organisations to continually develop their products and services to ensure they are providing the most valuable option to their customers. In turn, this will also develop a better and more trusting relationship between business and customer. To do so, businesses must recognise that the data they receive belongs to the consumer. It is theirs first and foremost and it is imperative that businesses act accordingly to ensure that people have transparency and are comfortable with the sight and use of their data.
In a complex digital world, it is important to build trust whilst maintaining the associating obligations that accompanies the responsibility of managing huge volumes of personal information. Prioritising the security of data whilst it is being transferred, both safely and efficiently, is paramount.
Research, carried out by Experian, reveals that people have certain attitudes when it comes to data sharing. This offers businesses a better understanding about how people in Britain feel towards the way their data is used and kept. When it comes to sharing data, the research depicts four different type of people:
- The Unaware – 22% of the population
These people simply don’t know how organisations plan on using their data. They are more willing to click ‘accept’ before understanding the full meaning of what they are agreeing too and are often more excited to access the products they want without truly engaging.
- The Accepting – 44% of the population
This group is slightly more reluctant to share their data, especially the amount they are asked for in order to access the products and services they desire. However, the desire for products and services, outweighs their desire to protect their information.
- The Cautious – 28% of the population
As you may guess, these people are much warier when it comes to data sharing. They take their time when reading the T&Cs and want to ensure that the company asking for their data is legitimate and trustworthy before they decide to share any information.
- The Incognito – 9% of the population
Think the SAS of the data world – these guys know what they’re doing. Still wary and careful with how they share their data, however this group has adapted to their environment, they know how to navigate the data world and decide just how much and when they reveal their information.
Most business know that with more access to individual’s data, they will have greater ability to personalise services and have tailor-made connections with their customers based on real insights. Overall this will provide a more personalised customer experience that satisfies both the individual and the organisation, although this isn’t always clear.
Yet businesses need to be able to read and respond to each individual customer in order to build a level of trust and understanding with one another. Once you reach this level you can derive a fair amount of value from the new opportunities that come with Open Banking.
Data is one of the biggest topics of 2018 and is continually driving innovation. Yet as we’ve already seen with the delay on the January deadline, with 5 out of 9 (55%) banks appealing for more time to comply with the regulations set out by the Competition and Markets Authority, the industry has some way to go to get in front. Banks need to be prepared to work harder towards invoking confidence and trust with their consumers.
Once this is achieved, we’re expecting a new focus on data to disrupt the way the industry works and make an immensely positive impact to the market, as the people begin to see the power of their data.
Why ID verification is no longer a barrier to global growth in banking
By Barley Laing, UK Managing Director at Melissa
Issues related to effective identity (ID) verification have restricted the global growth of both large banks and smaller challenger fintechs. With its plethora of internationally recognised IDs and verifiable private addresses, the western world is far different from much of the rest of the world, where this type of information does not exist. For example, many people in Africa and Asia lack recognised addresses. This anomaly prevents financial institutions from carrying out vital ID checks as they normally would, meaning they risk missing out on possible expansion into new and often burgeoning markets.
Proliferation of mobile
Smartphone usage is increasing in all corners of the world. Africa is no exception as the continent is set to see another 300 million new mobile internet subscribers in the next few years. This rise offers an opportunity to financial services organisations based in the west who have been concerned about the ID verification process in countries where ID, as they know it, can be hard to obtain.
While there’s no magic bullet approach to ID verification in these countries, it’s essential to use all the sources of information the mobile device provides to inform the identity of prospective and existing customers. For example, mobile telephone numbers offer a form of digital identity as people rarely change them. These numbers can be used for dual stage verification, such as an SMS sent to the registered user’s mobile number with a unique code to complete the login to a secure website or transfer funds.
Technology is driving secure customer onboarding and ID verification via mobile. Today, prospective customers can use a merchant’s app on their smartphone to scan their identity documents – such as a driver’s licence. The scan can extract the prospect’s data from the Machine Readable Zone (MRZ), saving time while securing the correct data electronically for the financial institution. Checks can then be carried out in real time to verify the document.
The IP address of the mobile device can play a vital role in fraud prevention. It’s possible to match the location of the phone’s IP address with that of the registered owner – where they are known to live or work. If this information matches up, it’s likely the registered user is using the phone. However, suppose the device’s registered owner is based in a country different from the information provided by the phone’s current IP address. In that case, there could be fraudulent activity taking place.
But it’s not just mobile; other new technologies play significant roles in the ID process.
Biometrics, which are human physical and behavioural characteristics that can be used to digitally identify a person, are becoming a vital part of the ID verification process. Once a customer has passed the ID checks at the onboarding stage, biometrics – which can operate across all devices – may help confirm the customer’s identity with facial comparison technology. However, basic biometric services can be hackable. For example, fraudsters could obtain the photo of a customer that might enable them to gain access to that person’s account. That is why it is crucial for organisations to use a biometric algorithm that checks for eye movement as part of their ID verification process. This ensures they engage with a real live person, not a static image or avatar, to prevent fraud. Just as important is how biometrics quickly and straightforwardly enable customers to access their account or service without responding to time-consuming security questions or remembering various passwords, thereby shaping a positive experience.
- Real-time access powers real-time decision making
When onboarding a new customer anywhere in the world, be sure to source a global dataset of billions of records. For real-time ID verification, fraud prevention, and data accuracy purposes, it should allow you to perform sufficient cross checks of the contact information provided by the prospective customers – their name, telephone number, email address, or home address. This dataset must leverage government agency, credit agency, and utility records, where possible, and access politically exposed person (PEP) watch lists.
- Social media tells a story
Don’t forget that social media such as Facebook and Instagram provide a wealth of knowledge on those who use them. Accessing this data within the parameters of best practice data protection for ID verification purposes helps organisations identify users’ location and transactional behaviour to support the ID verification process and prevent fraud.
Evolving technology – mainly related to mobile – makes fast, accurate, and secure ID verification anywhere in the world a reality. By combining this technology with access to accurate contact data from billions of global consumers in real time, the door is open for forward-thinking financial institutions to move into new global markets and drive strong growth securely.
Bank of Idaho Selects Teslar Software to Enhance Customer Service
Partnership enables bank to spend more time with borrowers, better meet their needs
Teslar Software, a provider of automated workflow and portfolio management tools designed to help community financial institutions thrive, announced today that Bank of Idaho selected its platform to improve productivity, freeing lenders to spend more time with their borrowers and improve service to the community.
Bank of Idaho is a business-focused bank that is one of the top SBA lenders in the state of Idaho. The bank first partnered with Teslar Software to leverage its automated workflow and portfolio management tools across its entire lending portfolio. It selected Teslar’s portfolio management, loan review, construction management and exception tracking solutions.
During the implementation process, Teslar’s technology made an impression, specifically its automation capabilities, so the bank felt it would be beneficial to also leverage Teslar PPP Forgiveness to help its businesses more efficiently navigate the PPP forgiveness process. Known as “the bank with a heart,” supporting community businesses with PPP loans has been a natural fit for the institution. And, Bank of Idaho hasn’t just helped its current customers; of the 1,200 applications processed, nearly 50% were new relationships.
“Teslar’s automated workflow and portfolio management tools are changing the trajectory of our organization,” said Jeff Newgard, CEO and president of Bank of Idaho. “The streamlined, modern processes are improving our customer experiences and allowing us to build stronger relationships. We’re building a frictionless banking experience that can help businesses in our community get through this difficult time and grow with our support and attention.”
Leveraging Teslar Software’s platform will enable the bank’s lenders to spend less time bogged down with traditional, manual processes and more time engaging with borrowers. They’ll also be able to increase visibility and communication across departments and can better serve customers and cross-sell.
“Bank of Idaho prides itself on taking a consultative approach to customer service,” said Joe Ehrhardt, CEO and founder of Teslar Software. “The bank truly cares about its customers and effectively helping them. Through partnering with us, they’ll be able operate more productively and empower their bankers to focus more on forming meaningful relationships with their customers, which is more important today than ever before.”
Turkey’s Akbank Will Use FICO Optimization to Build Value in Credit Card Portfolio
Akbank’s teams will also use FICO’s advanced decision optimization capabilities on a range of business problems
- After a competitive search, Akbank chose FICO to optimize its consumer credit card limit decisions for new and existing customers.
- Akbank also plans to use the same optimization technologies in solving different problems such as setting loan amount and price, and customer credit limits
- FICO is also working to futureproof the bank’s risk management growth by training in-house Akbank team on the optimization methodologies and action-effect modelling.
- Akbank’s strategy is to establish an optimization centre of excellence.
Global analytics and decision management provider FICO is providing decision optimization software to manage the growing consumer credit card portfolio for one of the biggest Turkish retail banks, Akbank.
More information: https://www.fico.com/en/products/fico-decision-optimizer
FICO has a global pedigree in credit limit management optimization projects, and many of the world’s leading financial institutions use its optimization technology. Akbank will tap into this depth of experience to create an optimization centre of excellence. Akbank has tasked FICO to train an in-house team so they can build their own applications for other areas, such as loan amount and pricing optimization, customer-based limit optimization and restructuring optimization.
FICO will configure and develop sophisticated “action-effect” models for Akbank’s retail lending team using FICO® Decision Optimizer to manage their initial credit limit assignment and the on-going limits for Akbank’s consumer credit card portfolio. The action-effect models project customer responses to offers in order to determine the best offer for each customer. These will be configured into the optimization framework, allowing the Akbank team to choose an operating point that meets their objectives and constraints.
Serhan Pak, Akbank’s senior vice president, Retail Lending, said: “We view optimization as a strategic tool for Akbank, as we build on excellence in credit analytics to reach our strategic goals. The robustness of FICO’s analytic technology and the fact that their optimization applications are in use worldwide made them a natural choice for us.”
Emre Unlusoy, regional director for Turkey & Balkans at FICO, said: “Akbank is aiming to improve profitability, market share and revenues while decreasing non-performing loans. This is an ideal use of optimization, which brings together analytics, decision logic, mathematical optimization and domain expertise.”
FICO® Decision Optimizer enables business analysts to develop, assess and improve the decisions that drive customer interactions and business results. Users can test decision strategies for the optimal results that balance trade-offs between cost, risk and reward, by factoring in dynamic economic and market conditions.
Akbank’s mission is to be the leading bank that drives Turkey into the future. The bank has grown to over 750 branches and employs more than 12,000 people.
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