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PUTTING TIME ON YOUR SIDE

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By Per Buer, CTO and Founder of Varnish Software

What financial services companies need to consider when website speed and currency is fundamental to business

Ever since Benjamin Franklin advised that “time is money,” in his 1748 Essay to a Young Tradesman, businesses have taken in to heart. The last decade’s digital wave and advent of the “real-time” concept have added new currency to this simple, enduring maxim. Financial services, where value is created, moved or lost within milliseconds is especially vulnerable to time’s tyranny.

Franklin’s maxim holds even truer for the growing number of established players and startups that offer services or access to financial information through websites or apps. Their consumers expect websites and apps to serve up information in the very instant and format they need it, otherwise they will seek alternatives that are just a mouse-click or keypad tap away.

Two things to get right
There are two main things those players need to get right to stay in the game: First, to create a website architecture that gives multiple users fast, simultaneous access to information and applications. Second, they need to be able to update information as soon as changes occur so users can trust that they are viewing and transacting with fresh data.

The first issue can be solved by integrating what is called a cache or a web accelerator – also called a reversed proxy – into the site architecture. A reverse proxy acts like an ordinary web server that intercepts all web requests before they reach a company’s web server. The advantage of a reverse proxy is that it caches requested pages from the server, so the server doesn’t have to reproduce multiple impressions of the same page. This means that the next user can view the page without experiencing a delay. By doing so, each server is able to serve hundreds of more consecutive requests per second, speeding up the website performance and make sure the site is loaded immediately. This helps prevent users from defecting to other sites.

Per Buer, CTO and Founder of Varnish Software

Per Buer, CTO and Founder of Varnish Software

Delivering fresh information is more complicated, especially when different systems and several data centers are involved. Content updates are usually executed where the content resides on the server. This means that older content might still be in the cache, so the user will not see the updated information immediately. In this case, the cached content must be deleted, or purged. The concept, known as cache invalidation, was coined by internet veteran Phil Karlton as one of two ‘hard things’ in Computer Science. Fortunately, nowadays there are different strategies and tools for purging cache. One tool is Varnish Administration Console (VAC) that includes a ‘Super-Fast Purger’ – a high performance cache invalidation delivery mechanism that works across multiple instances of cache. When using multiple servers in different locations, it uses a distributed architecture to spread out purge requests. Content or objects in the cache can be fully controlled and actively removed whenever needed.

Morningstar use case
Morningstar Inc. offers a real-world example of how to cope with these issues. Caching is a critical to the operations of this independent investment research provider in North America, Europe, Australia and Asia.

Morningstar provides data to approximately 456,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 12 million equities, indexes, futures, options, commodities and precious metals, in addition to foreign exchange and Treasury markets.

Initially, Morningstar’s needed to execute a minimum of more than 2,000 cache deletions per second to maintain critical business integrity. Data was to be supplied consistently and in real-time across multiple servers and locations.

Before taking advantage of the benefits of VAC and the Super-Fast Purger, Morningstar was not using any form of high speed purging. The need for a simple standardized solution for the underlying platform proved to be vital, as was the need for technology that developers and system administrators alike could share, regardless of location. Morningstar also wanted to release resources used in the cache purging process (computing power, computing infrastructure and also system administrators usually involved in this task) and take advantage of using them for other operations.

“The most important thing is to serve data for customers in a consistent manner. Varnish Administration Console delivers this”, explained Fred Wong from Morningstar, Inc.

Morningstar global presence truly pushed cache purging to the next level. Its distributed architecture ensures data is synced across multiple servers, and more importantly that those servers can be in any given data center. By doing this, data freshness and consistency are safeguarded.

For Morningstar, Inc. there were also many other benefits outside cache purging. Varnish Cache hit levels (when the requested data is available in the cache) were increased from 70% to 90%, releasing significant computing and human resources for other important tasks.

Morningstar’s success story proves that although time ruthlessly marches on, technology that might have impressed Dr Franklin, is available that can help financial services companies turn more of this precious resource into money.

Technology

Making Connectivity A Key Part of Cloud Strategy for Finance

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By Eric Troyer, CMO at Megaport

Finance organisations across the board are facing unprecedented disruption, with new technology entering the industry and consumer demands constantly evolving. Firms are trying to adapt to the rise of digital-first and the insatiable hunger of customers for increased speed and new types of services.

Leaders in the finance industry see cloud adoption as vital for multiple reasons. For example, they can leverage the cloud to speed up processing, eliminate data silos, surface deeper insights, and lower infrastructure and operating costs. As Peter Williams, global head of financial services technology, at Amazon Web Services, argues: “Taking advantage of virtually unlimited data storage and compute power to mine their core data allows financial institutions to make better trading, investment, and policy underwriting decisions. Analysing patterns across exabytes of data used to require significant investment and time, but cloud services that automate machine learning (ML) algorithms are improving how quickly organisations can innovate for their customers.”

Many financial organisations have long realised the importance of the cloud, however adoption has picked up steam in the last 12 months, and this only looks to be accelerating. Eighty-four per cent of fintechs, 82 per cent of corporate banks, 74 per cent of retail banks and 79 per cent of intermediaries globally plan to move mission-critical workloads into public cloud infrastructure by the end of this year, according to Ovum and ACI Worldwide.

It isn’t necessarily surprising that the finance industry is now fully embracing the cloud and understanding the innovative benefits it provides, but are they taking a step back to make sure the infrastructure is in place to support these goals? Are they thinking about how to actually make the cloud work for them?

Connecting the tightly-knit financial services ecosystems

The global professional services firm EY argues, “The benefits of cloud technology can’t be contested. It’s less expensive, easier to use, and in many ways, safer than private data centres. In addition to its benefits, cloud technology helps solve some of the most pressing concerns of financial institutions.” It goes without saying that the cloud is going to play a vital role in how the finance sector develops for years to come. However, that comes with pressure to get it right now.

For example, a stockbroker may use data to influence their decisions to purchase or sell, but they need to have access to this information quickly, then marry it with intelligence on their customer (their appetite for risk, etc.), and then be able to seamlessly make the purchase or sale. Having access to the data and partners that solves just one part of this equation isn’t helpful; it all has to be linked up.

This all requires speed, but, more importantly, it relies on a tightknit ecosystem for its success. Therefore, high performing cloud connectivity must be at the heart of any cloud strategy for finance organisations, so that they can tie these ecosystems together and move data quickly and securely. Despite this being a critical ingredient to success, many businesses have focused on what cloud service provider they will use or what application they want to run without considering how they will actually connect it all together.

While many CTOs focus on their cloud strategy, what really needs to be refined is their connectivity strategy.

Cloud connectivity — elastic is fantastic

When it comes to networks and connectivity, many finance organisations would have traditionally utilised a Multiprotocol Label Switching (MPLS) network. However, when private MPLS networks were first deployed, accessing cloud providers may not have been top of mind. Today, this is a critical factor in the deployment.

To support the enterprise costs of deploying a large-scale MPLS network, an organisation most likely entered into a long-term contract, not necessarily planning for how cloud could affect that decision in the future and the challenges of being locked into their existing topology. Adding multiple clouds and managing connectivity on an existing MPLS platform is typically slow, costly, and complex. This is the last thing financial organisations want when trying to boost speed and flexibility.

Eric Troyer

Eric Troyer

This is where Software Defined Networks (SDN) and virtual routing services come into their own. They can solve the cloud connectivity problem without requiring financial organisations to rip and replace MPLS networks and manage the expense that comes with that.

Working with an SDN to connect to the cloud helps reduce complexity of IT infrastructure and costs. More importantly, for financial services, SDN can reduce downtime as it helps to virtualise most of the physical networking devices, making it easy to perform an upgrade for one piece rather than needing to do it for several devices.

Virtual routing services, meanwhile, are a great option to solve the complexities and costs that come with connecting an MPLS network to the public cloud. Essentially, it is a way of easily and virtually routing an existing MPLS network to the cloud via an SDN.

Another major consideration for IT leaders is whether their organisation can quickly adapt to peaks and troughs in demand. Increasing bandwidth when needed can be critical to quickly adapting to changes in the stock market, for example. Therefore, financial organisations should ensure that connectivity to the cloud is elastic —  where bandwidth can be turned up or down in an instant This flexibility ensures that core business operations don’t fall down if there are peaks in demand and, equally as important, IT leaders are not paying for unused bandwidth that they don’t need.

Architecting a future-proof cloud infrastructure

There is no question that cloud technology will continue to change the way financial organisations operate. The task for CTOs now is to make sure they can easily get to the cloud, and they can quickly connect the tight-knit ecosystems they rely upon for success. The question CTOs at finance organisations should be asking themselves, therefore, is not what innovation can the cloud drive, but rather how do I make the most of it?  They can expect that connectivity will be a big part of the answer.

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The (U)X Factor: The software bringing biometric payment cards to market

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By Jonas Nilsson, Product Manager at Fingerprints

With over 20 bank trials in progress and a second commercial roll-out imminent in France with BNP Paribas, contactless biometric payment cards are steadily but surely making their way to our wallets, marking what has been called the ‘biggest development in card technology in recent years’.

Innovation cannot stand still now, though. Key learnings and insights from the trials, combined with expertise from mobile biometric systems, are driving more optimized products. As you’d expect, security and privacy are always front of mind but a seamless user experience (UX) is just as important for any new technology to achieve widespread consumer adoption.

Our research found that 64% of consumers identified a low rejection rate and ergonomics as key priorities for adopting the new technology. To succeed, biometric payment cards must not only improve the security of contactless, but deliver the same seamless UX too.

Getting these aspects right has been a balancing act of hardware and software innovation. Let’s have a look at the innovation that’s taking the biometric payment card from trial to the hands of consumers.

POS SOS

Time and time again, research shows that consumers and retailers alike want to avoid friction at the point-of-sale (POS) that might cause frustration, embarrassment or – most critically for retailers – dropouts.

As with any payment technology, a potential source of friction lies in the interaction with the traditional payment acceptance terminal itself. R&D has zoomed in on this to ensure transaction speeds remain as slick as traditional contactless. By optimizing the power consumption of biometric sensors in payment cards, the sensor and on-card matching process can all be powered from the payment terminal in the same way contactless cards are. The ultra-low power sensor is always on ‘standby’, meaning it is ready to go at a ‘tap’ on the terminal. Care has also been taken to ensure the cards are compliant with 100% of current payment terminals power levels, greatly reducing the possibility of friction.

Reducing rejections

Given these concerns about friction, it’s unsurprising that 64% of consumers in our research emphasized avoiding false rejections, where the correct fingerprint “doesn’t work” or isn’t read, as a point of hesitation.

While security is measured by the False Acceptance Rate (FAR) – where the wrong user is authenticated – convenience can be measured by the False Rejection Rate (FRR). This rate has historically been relatively low, but is in a constant balancing act with the FAR, with greater security provisions usually meaning a slight trade-off in convenience.

However, further refinements to the hardware which captures the fingerprint image, and the algorithm which process it, have succeeded in reducing false rejections even further. Drawing on improved image quality and more efficient internal software, the sensor can now read and authenticate the fingerprint source from more angles than ever. Even better, these improvements have also reduced the False Acceptance Rate (FAR), making authentications even more secure at the same time.

Real-time, all the time

A key measure of UX in payments is speed – especially when it comes to contactless. To be able to compete, biometric payment cards must deliver the same less-than-a-second authentication as unauthenticated contactless.

The challenge, of course, is that security must remain a priority – but imposing too much latency with new protection and anti-spoofing provisions is a threat to convenient response times, and ultimately, the UX.

Once again, further innovation has been crucial here. Thanks to refined sensor technology, the latest biometric sensors are able to increase transaction speeds by some 30% compared to earlier trials.

Ready to rock and enroll!

First thing’s first, when users receive their new payment card, they want to enroll quickly and securely. A laborious enrollment process risks curbing enthusiasm for the tech and ultimately, its adoption.

The good news is that enrollment is in fact very similar to the authentication process. It benefits directly from the same refinements to image capture and quality which are reducing rejection rates and speeding up transactions. Now, with improved image quality, capture and processing, enrollment can be done at any angle – quicker than ever before.

Fingerprints at the ready

As the market stands on the cusp of major commercial rollouts, the momentum behind biometric payment cards seems unstoppable. Convenience, safety and security are making a compelling case to banks and consumers alike.

Still, it’s important to remember that continual advances in the tech are fundamental to take the cards to the consumer. Fine-tuning and further optimization of sensor technology and accompanying software and algorithms has smoothed out any remaining concerns to maintain the all-important UX appeal.

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Embracing digital automation without compromising on customer experience

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By Mang-Git NG, CEO & Founder of Anvil

Community banks have always prided themselves on their ability to serve their local community with an unmatched level of customer service. My family has experienced this first hand when my parents immigrated to the United States as graduate students with no credit history and very little income. When no national bank would open an account for them, the local community bank provided the banking services my parents needed to help them find their feet.

You can expect to be anonymous at a large bank but as a community bank customer, you expect a more personal connection with your banker—after all, you live in the same community.

While the ability to nurture personal relationships remains a critical differentiator, community banks face a number of ever-evolving external pressures, from the scale of large incumbents to evolving customer expectations, threatening the ability to grow their customer base and even retain existing ones. It can be especially frustrating as a long-standing customer to be asked for your basic personal information over and over again on bank forms when your relationship goes far deeper than that.

Automation and customer experience are no longer a trade-off

Small business owners are increasingly willing to pay more for products and services that make their lives easier. This trend favoring convenience is likely to accelerate with the rise of Gen Z given their preference for mobile-first instant messaging apps. With this in mind, the need to transform products and services with digital technology adoption is a top priority for many banks. In a recent KPMG survey, 72% of bank CEOs said they were prioritizing investment in new technology, and 58% even said they have begun using artificial intelligence (AI).

However, community bank leaders have faced a dilemma in the past. The adoption of automation technology often meant compromising on customer experience. We’ve all dealt with frustratingly unhelpful chatbots that are ill-equipped to handle complex queries or advice that often come up in financial services.

Fortunately, automation technology has progressed beyond simple chatbots and now offers smarter ways to authenticate users without adding more friction, predictive analytics are helping bank employees make more strategic product recommendations that match a customer’s needs, and workflow automation is enabling banks to improve customers’ account opening process while also dramatically reducing the overhead of processing applications.

Combining these digital tools with a human touch to create personalized automation, and applying each in the right way, will help community banks stand apart from large banks, keep existing customers happy, and attract new ones.

Mang-Git NG

Mang-Git NG

Automation and profitability go hand in hand

In 2018, fraud against bank deposit accounts amounted to $25.1 billion, including $2.8 billion in losses. Intelligent fraud detection can help minimize such losses, thus impacting the bottom line. Banks that embrace security and fraud detection technologies have a significant advantage over their peers.

Similarly, automation to help streamline existing processes can prove invaluable. Every year, paper and PDF-based processes cost banks billions of dollars. Adopting paperwork automation technology leads to faster processing times for routine, repetitive processes like account openings and loan applications, resulting in greater efficiency and reduced costs. The use of dynamic forms with built-in validation also eliminates human error and the need for manual checks.

As an added benefit, automating away mundane processes like data entry allows community banks to invest time and human capital in what they do best: getting to know their customers and developing personal relationships.

Finally, process automation can enable banks to unlock growth. As an example, Minnesota’s Sunrise Banks adopted paperwork automation technology earlier this year to increase their ability to process Paycheck Protection Program loans from 85 to almost 500 per day, thereby allowing them to extend their lending capabilities beyond their existing customer base.

Thoughtful automation is crucial for survival

Embracing new automation technologies that allow community banks to match customer expectations while improving profitability is the key to long-term sustainable growth and success. A majority of bank CEOs recognize this and believe that, without agility, they would likely face bankruptcy.

While poorly applied automation technology can be an expensive way to create a bad customer experience, it is undeniable that meeting evolving customer expectations demands thoughtful application of such technologies. To avoid automation for the sake of automation, community banks should evaluate solutions based on their ability to improve the customer experience and the bank’s bottom line.

Ultimately, bank leaders should think about their top challenges and how automation can be a part of the solution, consider if the organization is ready for an investment in both time and money, and if they have the infrastructure in place to support thoughtful automation.

Sources

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