Refinitiv, one of the leaders when it comes to financial markets data and infrastructure, recently held an expert-led webinar, with the aim to tackle some of the big questions surrounding the future of digital banking in a post-pandemic world.
Whilst COVID-19 has been a very disruptive influence, it merely hastened developments that were already in progress. People, organisations and internet-enabled devices of all kinds are interconnected now, for example, back in 2010 6 out of every 10 transactions in the US involved cash, now the same proportion of transactions are via debit card payments.
As we now move into this new world that Covid has left behind, many studies and surveys are throwing up some really interesting results, such as that nearly half of consumers will interact with their banks digitally from now on, using mobile payments/wallets, apps and the like – and around 40% also said that they will only shop online from now on.
The impacts of this are many and varied – global financial and payments systems are currently facing dynamic, persistent and rapidly escalating threats as a direct result of these trends.
So, in this webinar hosted by Refinitiv, panellists grappled with how to reimagine digital banking in this ‘new age’ and reflected on the post-pandemic implications for this industry. For example, whilst there are many concerns to be addressed and challenges to be faced by major banking incumbents, this period may also present business opportunities and an acceleration in banking digital transformation programs.
This expert-led online session was moderated by Aravind Narayan, Performance Director at Refinitiv, and the speakers included: Steve Peacock, Chief Risk Officer at Think Money; Shana Krishnan, Policy Analyst at FATF; James Mirfin, Global Head of Digital Identity and Financial Crime Propositions at Refinitiv.
Right off the bat, Aravind Narayan, Refinitiv, questioned Steve Peacock, Think Money, on what he sees as the biggest challenges that you see in making that pivot to digital. Steve wanted to highlight two major things in this area. Firstly, he pointed out that, whilst it has been great for the industry as a whole that there are now many more new entrants to the market – usually in the form of fintech startups – and that it’s easier and quicker than ever before to open up an account with a banking provider, this poses challenges too, as “it almost provides a means to the criminal fraternity to get access to the financial system, and they will target these new entrants who are trying to grow their account base quite rapidly and to get to scale. So again, you know, they’re looking for the frailties in those organisations, if there are gaps in their controls and their fraud checks.” Some companies may handle this challenge better than others, with some really struggling to adequately deal with this, and others proving markedly more resilient.
Secondly, Steve identified an issue that, again, can affect all banking players across the market as a whole: loyalty. Due to the “freedom of choice out there now,” Steve thinks that it’s a very different-looking market to pre-2008 and the financial crisis, describing that “if they can’t get the service they want, and it’s not what they expect, they will move and they will vote with their feet.” The factors at play here, of course, are the number of different banking providers available to choose from, the ease of switching between them, and ability to easily compare different service providers – all thanks to the recent digital revolution.
The Future of Digital Banking
Following on from this, panellists delved into topics such as the changing consumer behaviour and fastest-growing types of financial crime, how COVID-19 has now changed the organised crime threat, and what future opportunities and strategies there are when it comes to accelerating digital transformation in the field of compliance, regarding KYC, AML, and other fraud checks.
Finishing up on the session, Aravind quizzed each panellist on where their real focus or excitement lay when it came to the future of these digital transformations. Steve went with “data integrity, and security,” holding this important as, due to us now being in the digital age “it affects everything around us at the moment.”
Shana Krishnan, FATF, went for digital ID, more specifically, a “global digital ID standard […] one of the things I think is an exciting space for digital ID is cross recognition of different digital ID solutions when it comes to cross border transactions.” As to who would take the lead on this, Shana believes that it would be a “convergence” of private industry and national government, with regulators and the private sector taking a leading role in developing this. And, finally, James Mirfin, Refinitiv, largely agreed with Shana, saying that, for him, ‘Nirvana’ would be “an open, federated, interoperable identity that consumers can use as they please across a range of service providers.” He admitted that this was perhaps a way off still, but something that was very worth it to aim for.
James had the closing word too, saying that he felt everyone represented on the call has been “going in the right direction” and that, if anyone listening in was currently feeling like their provider wasn’t currently being innovative enough when it comes to digital transformation, to ask them in greater detail about it – and that they might just be surprised.
To view the webinar in full, please click here.