Connect with us

Banking

HOW CAN BANKS SIMPLIFY TOKENIZATION?

Published

on

HOW CAN BANKS SIMPLIFY TOKENIZATION?

André Stoorvogel, Head of Marketing, Rambus Bell ID

Banks around the world are working to develop, launch or expand the mobile payments services they offer to their customers. Many issuers already support the ‘OEM Pays’ – Apple Pay, Android Pay and SamsungPay – and many more will seek to as they roll-out into other countries.

As part of this process, banks work closely with the payment schemes to integrate with their tokenization services. The schemes manage tokenization on behalf of the OEM Pays and allow banks to connect to these mobile payment services.

Payment tokenization replaces traditional primary account numbers (PAN) with unique payment tokens that can only be used in certain circumstances. For example, a token might only be usable when making a payment with a specific device (such as a smartphone) or when paying for goods or services at a specific merchant. The technology has been introduced to protect transaction data and mitigate fraud.

Token service providers are entities in the payments ecosystem that are responsible for the generation, storage, de-tokenization and lifecycle management of tokens.

There are now millions of digital cards and payment tokens deployed into the OEM Pay wallets.

The challenge

As the mobile payments ecosystem expands, managing tokenization activity is becoming increasingly complex and time-consuming.

Banks are seeing themselves integrate with an increasing number of third parties. Across a bank’s portfolio of accounts, it might issue cards across multiple payment schemes and issue digital cards to a range of OEM Pay wallets.

This requires connections with a number of the payment schemes’ tokenization services, each with their own individual requirements, specifications and interfaces.

In parallel, banks need to manage ongoing projects to update their systems in line with the regular specification updates from the global technical body and the payment schemes. This requires a great deal of time, investment and expertise.

With these individual connections to third parties, we are seeing a fragmented internal tokenization system develop that does not allow banks to gain an overall view of tokenization activity.

Banks therefore need a solution that not only simplifies the increasing complexity of their current tokenization activity, but that can also be adapted and expanded to meet future tokenization requirements as this relatively new ecosystem develops.

The solution

Banks can look to Rambus Bell ID’s Token Gateway to overcome all of these challenges. Banks can now manage tokenization activity for the ‘OEM Pay’ mobile wallets through a single software platform. This significantly simplifies and consolidates integration with the multiple token service providers (TSPs) operated by third-parties, like international and domestic payment schemes.

rambus

Rambus Bell ID constantly aligns Token Gateway with the latest requirements from the credit and debit schemes. This avoids the complex and time consuming process of monitoring for specification updates from the schemes and manually managing the update process to their systems. This makes the lifecycle management of tokenization significantly easier and cheaper.

Issuers also have the ability to tailor the solution to their specific needs. In addition to a lifecycle management module, which is fundamental to the platform, banks can choose from various optional modules. For example, a card asset module allows the personalization and branding of digital cards, and a token vault mirror is available to maintain a log of tokenized data in-house, allowing banks to check a transaction without having to contact the relevant scheme TSP. And as the banks’ needs evolve, the system can be altered and expanded at any time.

Banking

How banks can take on Google in the race for AI talent

Published

on

How banks can take on Google in the race for AI talent 1

By Nicola Sullivan, solutions director at candidate engagement tech firm Meet & Engage

The events of 2020 have made the battle for AI talent more ferocious than ever. In a volatile landscape where innovation is key, multinational firms are rolling up their sleeves for the inevitable scrum ahead.

For incumbent banks, the stakes are intimidatingly high. In one corner stand the fintech startups: the likes of Revolut and Monzo, who are snapping up AI-literate graduates while laying down pressure for capacity in exactly that area.

In the other corner, we find the Silicon Valley contenders of Amazon, Facebook and Google, who have phenomenal pay packages – not to mention glamour and visibility – on their side. And technologists with a finance background loom firmly in their crosshairs (Facebook employs hundreds of ex-banking recruits).

This unsettling picture is intensified by a chronic tech shortage: in a recent study by AI firm Peltarion, 83 percent of AI decision-makers agreed that a deficit of deep learning skills was seriously hampering their competitiveness. But, with the global impact of AI on financial services companies set to hit $140 billion in productivity gains and cost savings by 2025, banks need to find a way to break ahead and secure the AI talent they need. Here’s how:

Fish from a wider talent pool

We tend to think of AI in relation to a very niche set of qualifications. Yet in reality, it’s a fast-moving sphere that also requires a host of soft transferable skills such as problem-solving, agility, great communication and a sound analytical mind. In short, it’s less about what a candidate knows/does, and more to do with what they could know or do.

It’s worth thinking about whether you are being open-minded enough in your interpretation of tech talent. Do the AI roles you’re looking to fill need specific skills and criteria, or are they better suited to people who are inherently curious, intelligent and quick to learn?

Depending on the answer, you may want to expand your search from the bright young things of MIT or Berkeley to other related careers or older candidates with transferable skills. You may even want to look internally for the next generation of tech talent.

For example, if a bank’s customer-facing roles are declining but AI supply is not keeping up with demand, maybe this is a problem that could fix itself. The bank in question could run a two-week internal virtual AI internship to test interest, with the aim of rechanneling internal talent and avoiding redundancies. If AI is as critical as all forecasts suggest to the future of finance, investing in a more comprehensive approach like this may make a lot of sense.

Then there’s also the question of underrepresented groups. The proportion of black or latino people at major tech companies remains depressingly low, while women make up only a quarter of computing roles.

As well as driving equality, this issue of diversity is also a market gap that could be used for competitive advantage by banks. But doing so requires a deep-seated strategy that addresses the root reasons why candidates from these groups are turning away from tech. Issues such as lack of career development and accessible education need to be solved at ground level from the inside-out; an effort that begins before, or in tandem with, recruitment.

Make your recruitment process personal and transparent

When you’re fighting for top AI candidates who have the world at their fingertips, it’s not enough to bundle them through a generic Applicant Tracking System. You have to actively woo them, and get them on-side with your vision and community. This is especially important for millennials and Gen Z recruits, who are more purpose-driven than their predecessors.

Live online chat sessions hosted by high-profile speakers across the business is one tactic our banking clients have seen great success with here. For example, a shortlisted group of technologists get to meet with a bank’s CTO or Chief Human Resources Officer via a group chat (which they can join anonymously if they want to), to ask questions and find out more about a company’s technology roadmap and cultural ethos.

This is a rare opportunity to give candidates real takeaway value; even if they’re not thinking about leaving their current job, few will turn down the chance of time with the person who runs cybersecurity at a major bank. And this person will invariably be able to communicate a much better sense of culture than a third-party recruiter can.

Visibility is also important here: if you want to attract more BAME or female candidates, you need to have lead BAME or female technicians as a vocal part of the recruitment process, showing what success in your company looks like. If you don’t have people to fulfil these roles, you need to go back and address that rather than making empty statements.

Opening the doors to your company in this way is a winning strategy for tech candidates: it’s a “wrapper” to put around them and make them feel wanted, welcome and motivated – even when a recruitment process lasts a little longer than you’d like.

Talk like yourself but walk like a tech expert

Part of the openness needed to recruit key tech talent is about being authentic, too. There’s a tendency among some finance incumbents to “get down with the kids” and appear more like their disruptive competitors than they truly are. If you are a long-established brand in the banking world, with a good track record of developing careers, that alone is enough to attract AI technologists – you have a lot to offer, and you don’t need to put on a guise.

Equally, if you do have work to do in being more accessible to potential candidates, focus on real progression rather than image. This may mean putting through measures to build awareness and role modelling around recruitment diversity, or enhancing employee wellbeing.

With mental health issues on the rise in the workplace, a co-managed wellness programme of fitness and community events can make the difference between which way a candidate sways in a roomful of enticing options. This is especially true since banks – for all their boardrooms traditions – have a reputation amid technologists for a better, less brutal work-life balance than Silicon Valley.

Lastly, banks need to walk the walk when it comes to tech-enabled recruitment. However hard you try to make it personal, most candidate enrollments will involve a degree of automation at some stage – and it’s important to make that process as quick and slick as possible. For a candidate with consumer-grade tech experience, first impressions count: they want to know that this is a place that will recognise and nurture their skill set. So instead of a long, clunky application process, maybe consider a virtual assessment centre or a sophisticated chat bot, which can capture essential information in a fast, engaging way.

Recruiting the world’s top tech talent isn’t a question of magic or even necessarily a huge pay cheque. Instead you need to weave together these “micro-moments” that signal your bank’s character, integrity and technical ambition. Do this, and you stand a good chance of persuading leading AI candidates to skip the queue and come directly to you.

Continue Reading

Banking

1.4 million customers to stop using bank branches due to COVID

Published

on

1.4 million customers to stop using bank branches due to COVID 2

1.4 million customers to stop using bank branches due to COVID 3 8.4 million customers had already stopped visiting branches in person before lockdown

1.4 million customers to stop using bank branches due to COVID 4 However, three quarters (74%) of customers will return to banking in branch after the pandemic

1.4 million customers to stop using bank branches due to COVID 3 Of those who plan to return to branches, over two thirds (69%) will only return when they absolutely need to

1.4 million Brits (3%) don’t intend to go back to a bank branch again after the COVID pandemic, according to a new survey by personal finance comparison site, finder.com

A further 1.6 million (3%) said they don’t have an account with a high-street bank, meaning a total of 3 million Brits don’t have a need for physical branches.

This number may rise, as 8.4 (16%) million Brits had stopped using their bank’s branches before lockdown and are not sure if they will ever return.

However, not everyone has gone completely digital as 3 in 10 British banking customers (29%) have already returned to using their bank’s branches, with an additional 44% of customers planning to return soon.

Of these people who plan to return in the near future, over two thirds (69%) will only return when they absolutely need to and their problem cannot be solved online or over the phone.

While a third of those consumers (31%) are waiting for a COVID vaccine or treatment before they go back to their local branch.

This means that eventually, three-quarters of Brits (74%) will return to banking in-branch the way they did before lockdown.

However, they may face a longer journey than they previously did to find a branch. Data from ONS shows 25% of branches have closed in the UK since 2012 and this decline in branches is likely to continue if people follow through with their plans to avoid branches.

Customers in Northern Ireland will go back to banking in branches more so than those in any other region, with 85% of customers here saying they have already returned or plan to do so soon.

Interestingly, a quarter of customers (25%) in the East Midlands had already stopped banking in branches, making this the area with the most customers who no longer use branches.

Those in the North East are set to follow the same path as residents in the East Midlands, with 5% of customers in the North East saying they will stop using branches in the future.

To see the research in full visit: https://www.finder.com/uk/banking-branch-usage

Commenting on the findings, Jon Ostler, CEO at finder.com said:

“Lockdown has quickly changed many aspects of our lives and our banking behaviour was no different. Not being able to visit bank branches in person meant many consumers had no option but to start using online banking and bank’s mobile apps. These are generally easy to use and intuitive so you would expect some of these new converts to stay away from branches going forward.

“While the digital-only banks excel at their app offering, previous research we carried out found that sentiment towards these banks fell almost three times as much during lockdown than towards high street banks. This could be a sign that the quality of apps and online banking from high street banks is catching up.”

1.4 million customers to stop using bank branches due to COVID 6
Methodology:

Finder commissioned Onepoll on 26 to 28 August 2020 to carry out a nationally representative survey of adults aged 18+. A total of 2,000 people were questioned throughout Great Britain, with representative quotas for gender, age and region.

Continue Reading

Banking

Liquid Assets of a Bank

Published

on

Liquid Assets of a Bank 7

Liquid assets are tangible and movable assets which are easily convertible into cash in a crisis situation. Liquid assets are used by lenders to fund their loans. Examples of liquid assets include government bonds and central bank reserves.

To stay alive, financial institutions must have enough liquid funds to pay withdrawals and other immediate financial obligations by depositing holders of checks. But the amount of money they have in liquid form is not enough to cover these short-term obligations and their financial problems will become worse. Liquid assets of the financial institutions should be regularly replenished to make the banking system financially stable. In order to maintain a sufficient amount of money in the economy, the Federal Reserve System will always be in need of additional assets.

There are several ways in which the financial institutions can replenish their liquid assets. One of the ways is by borrowing funds from banks and credit unions. The other way is by issuing debt securities to provide liquidity for the monetary system.

Borrowing from banks and credit unions: Banks can borrow funds from other financial institutions in order to meet their liquidity requirements. However, the rate at which banks borrow funds from other financial institutions is usually very high. This high rate can only be beneficial for the financial institutions because the borrowed funds are used to purchase commercial mortgage-backed securities (CMBS). In return for providing CMBS, the banks can receive interest payments on the principal balance of the loans they have made to other financial institutions.

Issuing debt securities: The assets that a commercial bank or credit union secures as collateral for the loan from other financial institutions can also be used to liquidate its existing liquid assets. Usually, the assets used as collateral to secure loaned funds are Treasury securities, corporate bonds and treasury bills. However, as the value of these securities decreases, the banks’ ability to recover them through the redemption of their treasury bills and the federal income tax on the principal balance of these securities can increase the amount of funds they will have to pay out on short-term debts.

Securing debt securities: As mentioned above, the assets which commercial banks and credit unions can use to liquidate their liquid and non-liquid assets can also be used to secure loans made by them to other financial institutions. But it is important for the banks and credit unions to ensure that the funds they use to secure these loans are not used to purchase more securities. In order to obtain maximum gains from the sale of their assets, they should use a method to redeem the securities before the maturity date of the loan.

In addition to using these methods to secure other financial institutions’ loans, banks and credit unions can also sell their assets in order to raise the funds they need for making short-term payments. For example, if a commercial bank has a large inventory of commercial mortgage-backed securities, it may want to sell some of its assets in order to raise the capital required to make a single payment. If the purchase price of these assets is less than the total loan balance, the bank can sell its securities and cash in order to raise the necessary capital.

Although liquid and non-liquid assets can help the banking system to make its operations more stable, the loss of one type of asset can severely affect the financial condition of a bank or credit union. Therefore, even if there are many types of assets, it is important for the banks and credit unions to maintain a balanced level of liquidity in order to make sure that the economic system is not adversely affected by any one type of loss.

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

How Siloed Data Leaves Financial Institutions Open to Fraud 8 How Siloed Data Leaves Financial Institutions Open to Fraud 9
Technology3 mins ago

How Siloed Data Leaves Financial Institutions Open to Fraud

By Stephanie Lapierre, CEO Tealbook Reducing the risk of fraud is a top priority for all financial institutions since fraud...

Dealing with the loneliness crisis with assistive technology 10 Dealing with the loneliness crisis with assistive technology 11
Top Stories3 hours ago

Dealing with the loneliness crisis with assistive technology

By Karen Dolva, CEO and Co-Founder of NoIsolation Humans are social beings, and for most children, school will be their...

Round Table Feature – Attracting FDI at times of crisis 12 Round Table Feature – Attracting FDI at times of crisis 13
Interviews5 hours ago

Round Table Feature – Attracting FDI at times of crisis

In recent years the growth of Northern Ireland’s financial services sector has been fuelled by an unbeatable combination of world-class...

UK versus Australia – data regulation on both sides of the world 14 UK versus Australia – data regulation on both sides of the world 15
Business5 hours ago

UK versus Australia – data regulation on both sides of the world

By Guy Hanson, VP, Customer Engagement, Validity While consumer data privacy continues to be a hotly debated topic and many...

COVID-19 is changing people’s preferences when it comes to BTL investments 16 COVID-19 is changing people’s preferences when it comes to BTL investments 17
Investing6 hours ago

COVID-19 is changing people’s preferences when it comes to BTL investments

By Jamie Johnson, CEO of FJP Investment Throughout 2020, investors have had to navigate increasingly treacherous and volatile market conditions...

Three things to help fintech unicorns grow profitability 18 Three things to help fintech unicorns grow profitability 19
Technology6 hours ago

Three things to help fintech unicorns grow profitability

By Kash Amini, CEO and Founder of MasLife The new breed of fintech companies is missing a trick with a...

How banks can take on Google in the race for AI talent 21 How banks can take on Google in the race for AI talent 22
Banking6 hours ago

How banks can take on Google in the race for AI talent

By Nicola Sullivan, solutions director at candidate engagement tech firm Meet & Engage The events of 2020 have made the...

Furlough Fraud: genuine mistake or cheating the system? 23 Furlough Fraud: genuine mistake or cheating the system? 24
Business8 hours ago

Furlough Fraud: genuine mistake or cheating the system?

As the furlough scheme comes to an end, many employers will be at risk of falling foul of its stringent...

Five features that decrease the value of your home 25 Five features that decrease the value of your home 26
Finance3 days ago

Five features that decrease the value of your home

When you’re preparing to sell your house or flat you might think of various steps you could take that might...

Regulatory overlaps cause conflicts, confusion and complexity: is collaboration the answer? 27 Regulatory overlaps cause conflicts, confusion and complexity: is collaboration the answer? 28
Top Stories3 days ago

Regulatory overlaps cause conflicts, confusion and complexity: is collaboration the answer?

By Rob Fulcher, Head of Business – Americas, CUBE Global Regulatory overlaps are an ongoing, perplexing and often time-consuming anomaly....

Newsletters with Secrets & Analysis. Subscribe Now