Uncategorized

eCommerce is seeing accelerated growth across Latin America, with overall retail eCommerce sales increasing more than 36% throughout the region in 2020 as compared to the same period in 2019. However, the social and practical realities of Covid-19 have exposed some significant pre-existing problems within the digital payment systems that underpin this region’s expanding digital economy.

by Juan Carlos Martinez, Director & Co-Founder, Bamboo Payment Systems

These problems include a lack of financial inclusion among the population, regional disparities in payment formats, arduous complexities in many cross-border transactions, a deficiency in available credit rating programmes, and shaky consumer confidence in digital payment methods – all of which represent major barriers to sustained growth in the sector. To maintain a competitive edge, online merchants must frequently adapt their eCommerce strategies to meet varying local needs, and regional payment service providers (PSPs) that cater to global merchants must allow for constant customisation of payment offerings and flows if they aim to maximise opportunities within the LatAm eCommerce space.

The issue of limited access to and/or adoption of digital payment methods among Latin American populations is nothing new and has traditionally been viewed as a primary barrier to the expansion of eCommerce throughout the region. However, the global pandemic has accelerated adoption of digital payments and eCommerce, in many cases as a resulting necessity of strict quarantine restrictions. However, cash payments remain a major component, and currently account for 20-30% of online purchases. More striking is the fact that close to 207 million Latin Americans – roughly 46% of the population – do not have access to bank accounts, an important catalyst for the adoption of digital payment methods like credit and debit cards.

The local experts

Regional payment facilitators play a crucial role in promoting cross-border eCommerce by offering global merchants simplified access to this fragmented eCommerce environment. The local knowledge of these PSPs and the connectivity with popular local payment methods including cash networks, bank transfers, and local prepaid cards enable the development of unique, tailor-made solutions for each merchant that reflect the realities in each country via a single platform. As consumer preferences evolve and new digital payment methods are adopted, PSPs adapt their connections to local acquirers accordingly, allowing international merchants to benefit from this quick adaptation to ever-changing market realities. Essentially, PSPs are the local experts. Global merchants can then leverage this expertise to maximize the conversion rates of their eCommerce sales and stay at the top of their game.

But how important is this market flexibility in relation to the digital payment methods offered by global merchants to local consumers? Let’s look at a few basic indicators within the top three eCommerce markets in Latin America: Mexico, Brazil, and Argentina, three countries that when combined represent approximately 75% of all eCommerce sales in the LatAm region.

Generally speaking, credit and debit card adoption rates are noticeably low across the board in these countries, underscoring the significant barrier a lack of financial inclusion presents. Furthermore, among those who do have them, a large percentage of credit cards and debit cards issued in these countries are enabled solely for domestic purchases. In other words, these cards will not function for purchases made on merchant websites abroad. Additionally, chargeback rates are high in the region. In Mexico for example, the industry standard can be up to 3-6% which is roughly triple the global average. Thus, regional PSPs are key in mitigating this risk via the utilisation of region-specific anti-fraud systems which incorporate localised transaction databases and region-specific rules.

Another reality is the informality within the LatAm labour market, something that is still quite prevalent, with cash payments being preferred by many consumers. In Mexico, the OXXO convenience store’s cash voucher system is still a highly popular payment avenue, in Argentina the national chains Rapipago and PagoFacil offer many popular local payment options, and in Brazil there is Boleto cash payments which are still popular despite them currently being supplanted by a new national online payment protocol, PIX.

Finally, local bank transfers via standardised protocols are crucial necessities for many consumers, for example the Bank of Mexico’s Interbank Electronic Payment System, SPEI (Sistema de Pagos Electrónicos Interbancários), which is widely relied on by citizens for payment purposes.

In short, the disparities across countries and the widely-varying alternative payment methods available make regional PSPs an invaluable partner for global merchants wanting to access the hugely substantial and yet considerably underserviced LatAm population.

So, what is the outlook as we enter the second half of 2021?

As LatAm markets continue their transitions toward digital payment, as is the case of PIX increasingly replacing Boleto as the new gold standard in Brazil, the diversity of payment methods and consumer preferences across countries is profound, and highlights the supreme importance of regional PSPs as uniquely unifying entities for global merchants wanting to sell in Latin America.

When a human being or even an animal faces risk, there can be one of two reactions – fight or flight. Risk is inarguably ubiquitous and something that most of us deal with on a daily basis. However, rather than fight or flight, sometimes the best way to deal with risk is to buy protection. And, this is where the insurance industry plays an integral role.

By Vijay Kasturi, Head of Sales & Business Development – Western Europe at Profinch Solutions 

The insurance industry enables you to protect the downside of unforeseen events and mitigate the impact of risk events. Traders and mariners have been buying insurance for the last 500 years. Inevitably, the insurance industry has significantly evolved over this vast period of time and shape shifted in response to the changing environment. Today, the industry is in the midst of another important transition precipitated by technology and in response to changing consumer needs. It has finally started its delayed, but firm, march towards digitization. While digitization is being embraced across the value chain, its importance in claims management needs to be highlighted.

The digital claims value proposition

For an insurance company, the moment of truth comes at the time of claims processing. An efficient and timely settlement of claims can lead to a positive experience for the customer and help the insurer engender trust. Digitisation can help enable this in several ways. However, in the digital age, a truly robust claims value proposition needs to go beyond the traditional after-the-event claims management exercise. It needs to be holistic and foster an end-to-end partnership with the customer. This means digitizing the entire claims journey starting from digital claims prevention and digital first notification of loss (FNOL) to digital loss assessment and automated settlement, especially for clear and simple cases.

What does digitizing the claims process mean for insurers?

Automated and intelligent interactions can facilitate the faster settlement of claims.  Insurers can leverage Artificial Intelligence (AI) to create chatbots that can act as the first call of support for customers. These chatbots can address basic settlement queries and even commence the claims settlement process. For example, chatbots can easily avoid the need to check the policy number for identification by simply verifying it with the policy documents, photographs, and other documents submitted by the policyholder. Further, they can interact with the customer, assess the requirement, and then suggest the best course of action. A process that would normally take a number of days can be done in just a few minutes with the assistance of chatbots. The best part is that since chatbots are available round the clock, customers can interact with them and have their queries addressed almost as soon as the need arises. This can be invaluable to a customer who is looking to make a claim.

Machine Learning (ML), a subset of AI, can further augment the value being generated by automating a significant part of the claims process. Imagine this scenario – an individual interacts with a chatbot to initiate the claims process. At the back end, ML tools have already converted all the files and information into digital assets and made all the information available to the chatbot via cloud. The chatbot can now point the customer in the right direction. Next, data analytics and drone technology can be leveraged to assess or verify the damage for which the claim is being made. For example, the claimant can take a picture of the damage and share it with the insurer. Digital tools can then be applied to scan the picture, compare it to a repository, and verify the actual damage. Or, unmanned drones can be deployed in case of large-scale damage where individually assessing the damage might not be possible. With assessment done, settlement of small value claims can be automated while large value claims can be referred for further evaluation. With the entire process automated, it becomes more efficient and seamless.

It is important to recognize that automated risk assessment is actually the first step in improving the claims management process. AI can enable insurance companies to improve the risk assessment and underwriting cycle. Insurance companies can leverage AI and predictive analytics to access data related to the risk metrics of individuals rather than groups of people and assess it more efficiently, thereby improving the risk assessment and the claims cycle. According to a report by PWC, the initial impact of AI will primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes.

Clearly, digitization of the claims process can be highly value accretive for the insurer as it leads to faster settlement of claims, improves the customer’s claim journey by making it more seamless and efficient, and helps in achieving cost efficiencies.

Today, the average insurance customer is already accustomed to digital interactions and is, in fact, demanding digital journeys in most spheres of their lives. For insurance companies, it has now become essential to holistically embrace digital solutions in order to meet the customer’s needs and thrive in the new normal.

Irrespective of where they are in the world FinTech companies are vulnerable to cyberattacks and deploying the kind of encryption and security technology that major banks use is costly and requires technical expertise.

by Eyal Worthalter, Vice President – Global Solution Sales, MYHSM by Utimaco

FinTechs are not just getting more customers and larger investments, but we are seeing new FinTechs founded in sub-Saharan Africa and cities like Tel Aviv, Stockholm and Hangzhou beginning to compete with traditional cities such as New York, London and San Francisco as major hubs of innovation.

Cybercrime is a global problem

Cybercrime cost the world $1 trillion dollars in 2020, more than the combined cost of all natural disasters and the costs of adapting to climate change, and this number is only going to rise. Data breaches can cost companies as much as $3.86 million and take as long as 207 days to discover. Some companies have been the victims of particularly damaging, headline-grabbing hacks: after 147 million people’s personal information was exposed in the Equifax hack the company spent $1.4 billion on security upgrades.

Although the global pandemic helped FinTech companies by showing many people that they could easily administer their financial lives from their phone and pay for goods and services without cash, it also drastically increased the amount and sophistication of cybercrime. At any time when there is a global financial downturn more people will turn to crime of any kind to make ends meet.

FinTech companies may seem like low-hanging fruit to criminals when compared to banks. Both keep and process customer payment data, but banks have extensive security operations – one survey shows that banks spent on average 10.9% of their IT budget on cybersecurity, and this is growing every year. FinTech companies will have the same challenges but significantly lower budgets, which leads to a situation in which criminals perceive them as weak and are more likely to target them, increasing their need for cybersecurity when they are least able to satisfy that need.

This is a particular problem for companies based outside of the traditional tech hubs, and even more so for startups in the developing world. There is already a skills shortage in the cybersecurity industry, and the limited number of experienced professionals know that they are more likely to get high-paying jobs in the world’s major tech hubs than those cities that are still developing their FinTech industries. This leaves the younger companies who need the most support without the critical skills that they need.

Cloud-based encryption can bridge the gap

Encrypting cardholder sensitive data such as PINs during online transactions is hugely important to minimise any fraudulent activity. The use of a Payment HSMs in the financial services industry is mandated by PCI Security Requirements and are a fundamental requirement to become PCI PIN compliant. However, Payment HSMs require significant investment and specialist knowledge to operate and manage. For these reasons, they may be out of reach for small start-ups and companies in the developing world.

Cloud technology has clear advantages for FinTechs and the recent pandemic has accelerated the use of cloud-based systems in the financial world and increased the use of cloud systems by FinTechs, 55% of which say they use multiple clouds. Cloud technology may be deployed quickly without the need for new hardware, it scales to meet surges in demand, backs up all of a company’s data and can often be paid for monthly rather than as a single expensive purchase.

Furthermore, cloud-based services allow smaller companies to deploy the same level of security and compliance that is used by much larger companies at a fraction of the price. This means that startups can focus on their core business knowing that security and compliance is taken care of, which in today’s cybersecurity climate will be a major relief for the company.

Digital-first pressure for banks is well and truly on. Leading financial institutions know they must lead in both customer experience and operations en route to a digital-first future, while also recognising these as areas of strength for digital-native challengers and FinTechs.

by David Murphy, Head of Financial Services EMEA & APAC, Publicis Sapient

Today, almost everything is digital. The way we shop, interact, how we bank. A global pandemic made digital capabilities mission-critical, enabling banks to continue efficiently serving their customers remotely. And for the most part, this has been achieved with a great deal of success. However, before the pandemic, many banks were sceptical about their ability to pivot so quickly to a digital-first approach. They knew they needed to, but the ‘How?’ proved difficult as they were bogged down by legacy technology and cultural debt.

Banks have been aware of their digital-first future for quite some time, but many have simply struggled to get there, stalling at the first hurdle and giving away valuable market share to a wave of digital natives that are more agile, innovative, and free from the weight of traditional restraints; adapting and pivoting as required. So far, the market has been theirs for the taking, inspired by the likes of Amazon, Netflix and Airbnb which have disrupted entire industry sectors with their digital-first platform approach. They have successfully leveraged technology to create a superior customer value, offering slick and frictionless experiences that have appealed to a new generation of financial customers.

Recent research by Publicis Sapient showed that 83% of  banks already have a clearly articulated digital transformation strategy in place, but the pandemic acted as a catalyst to act faster. According to the study, 81% of banks say the pandemic has made improving their digital skills and capabilities more urgent, and 70% say it highlighted weaknesses in their customer experience. Covid-19 has only served to reinforce the gaps in legacy banks’ customer experience and operational transformation. Banks are accelerating to compete with digital-first challengers like Monzo, Revolut, Chime and Nubank, while developing partnerships with FinTechs that can accelerate the provision of new customer propositions. Personetics, a firm that uses data and AI to enable banks to provide personalised insights to their customers is a great example.

Incumbent banks are however, far from complacent. Most say they must do more to keep up with these nimble, digital competitors while appealing to a new breed of digital-native customers. Leaders from the Global Banking Benchmark Study ranked digital-first challengers, FinTechs and consumer tech companies among the top five influencers of their own digital transformation strategy. “FinTech is the future,” as JPMorgan’s CEO, Jamie Dimon, wrote in a memo to shareholders ahead of the bank’s earnings numbers release.

Put simply, banks need to stop aspiring and start acting to counter the new competition ‘head on’ by transforming their technology, investing in appropriately skilled talent needed to make this technology work for them, and emulating the digital-first mindset and culture of the challengers. Crucially, they must digitalise and become truly customer centric. At the most basic level, they need to provide access to their services online and efficiently to customers entirely via digital channels. Not only basic services such as checking balances and making money transfers, but also more complex transactions such as mortgage lending. In this rapidly evolving environment, banks need to deliver superior customer experiences while being operationally agile enough to drive growth and give themselves a fighting chance to compete, which is not always easy. Look at N26, Starling, and Revolut, who have clearly demonstrated their ability to achieve a high level of digital maturity by creating digital-only propositions at speed while innovating on the product cycle in their area of specialization.

Banks need to optimise all areas of their customer experience and operations – from their business models and technology to their products and services and even their people in order to achieve both revenue growth and cost reductions in a post-pandemic world. This will also enable them to compete in an increasingly complex, digital-first financial services landscape. Banking of yesterday has gone, and to cement themselves for the future banks must innovate with customer experience top of mind.

How can banks learn from FinTechs?

Accelerate into a digital-first future. Know the competitive landscape. Banks need to understand their competition, then invest heavily in digital innovation to keep pace with them as digital-first challengers, FinTechs, and new entrants continue to reshape the financial services outlook.

Transform both people and culture. Leading banks recognise that investing in developing talent and skills to transform culture goes hand-in-hand with technology investments – they are not siloed. Lack of skills can be a key barrier to transformation.

Invest in a partner ecosystem and distribution network(s). Building partnerships will allow banks to scale and pivot at speed to compete with digital-first competitors.

Be agile to move and innovate at speed and scale. Leading banks have already grasped this shift and are now focused on building urgency – 40% of banks believe that agile product development is the key trait for digitally innovative financial services firms.

Move to a cloud-based model. Cloud is central to banks’ digital transformation strategies, whether for core modernisation, enabling personalisation or real-time payments. However, banks need to look beyond infrastructure and cost efficiency. Opportunities for customer innovation and cloud-enabled services must be seized. That said, adaptation will take time as sentiments steadily rise, 29% of bank leaders say cloud investment will be central to their digital transformation plans over the next 3 years.

Banks are aware of the impact that these new challengers and market entrants are having on the pace and priorities of their own digital transformation. In turn, flexibility is becoming increasingly important for digital competitiveness in the market. Banks need to prioritise investment in agile capabilities which will allow them to accelerate the rollout of new customer features and innovations.

While banks should not necessarily flock to follow the internal structures of digital competitors, it is crucial that they realise what has made them so successful: customer obsession. They have an established customer-led culture; a 360-view of customer data; they deliver omnichannel servicing and offer personalised experiences and products, but most importantly, they have a platform-based approach. The types of institutions that will be successful in the next 3-5 years are going to be institutions that integrate different parts of a large ecosystem into a platform experience. Banks must use data to deliver an in-depth understanding of the customer and their wants and needs, and banks must service those needs in a streamlined, seamless, ethical, and engaging way.

By learning from challengers on how to become customer centric, they can invest in and improve on their own CX. This requires investment into digital innovation to keep up. The good news is that it can be done. The pandemic has shown that banks can move incredibly fast when required and support their customers almost entirely digitally with no branch access. Customer needs and demands are constantly in flux. An iterative approach which works constantly to improve, update, and respond to customer desires is essential. This approach will see today’s banks best position themselves for the digital-first future.

The article highlights how the proliferation of API-led possibilities has led to a tremendous potential in shaping up the new open banking business models in the banking industry.

by Sanat Rao, Chief Business Officer and Global Head – Infosys Finacle

While the concept of Open Banking has been around for some years, the industry mostly espoused it for the sake of regulatory compliance. However, in the wake of the pandemic, there has been a definitive and rapid uptake of open banking approaches and adoption globally. For instance, in Covid’s devastating aftermath, many beleaguered borrowers – especially small businesses and individuals – have found the Open Banking ecosystem to be an easier source of credit. By authorizing their banks and various other institutions to share their data with third-party providers in real-time, the borrowers are able to tap a wider supply of credit on more favorable terms. And this is just one of the many forces driving an accelerated adoption of Open Banking that has made it a key transformational lever of our world today.

Along with this growing appetite for Open Banking, the scope of Open Banking has also enlarged in recent times. The early days of Open Banking saw limited information sharing and little else; today, as participants gain in compliance and confidence, they are offering a wide portfolio of offerings, including credit, payment and accounting solutions, with plans to introduce savings and investment products as well.

Two factors are supporting this growth – first, a regulatory push in many countries and second, the proliferation of open APIs. The numbers speak for themselves – in the first two quarters of 2020, Open Banking API platforms globally grew 49 percent QoQ¹. In the latest EFMA Infosys Finacle Innovation in Retail Banking Study, financial institutions said Open Banking APIs will have moderate to very high impact on banking business in 20212. APIs are a huge enabler of Open Banking ecosystems, facilitating both efficient exchange of data between participants and a variety of offerings on third-party/ non-banking channels.

“APIs are poised to change the future of banking. They have tremendous potential to enable innovations in Open Banking led business models, that are most relevant to banking industry going forward”

The Growing Impact of Open Banking

Open Banking is changing the very nature of banking and banking institutions. At the highest level, it is dismantling the “pipeline” universal banking model and enabling a ‘platform’ model in its place.  Consequently, banks, which traditionally manufactured their products and distributed them through their own channels to their own customers, are now offering a variety of financial and non-financial products sourced from other providers or distributing their own products and services on third-party channels.  They are doing this by working with their external ecosystem in a variety of ways:

• Creating joint products with partners: Examples include Paytm which has introduced a co-branded credit card with CitiBank (and VISA), and Marcus by Goldman Sachs (and Mastercard) which has collaborated with Apple to launch the Apple Card.
• Embedding non-banking products within customers’ primary journeys: DBS is a great example, with successful marketplaces for used cars, property, travel and utilities that allow it to enter the customer journey well before the customer starts looking for a banking product.
• Collaborating with third parties to deliver (even) rival products: Once again, consider the example of Paytm, which is working with IndusInd Bank and ICICI Bank on high value fixed deposits and digital loans respectively.

Banks are constituting their platform businesses into the following innovative models:

• Banking-as-a-Service (BaaS): BaaS is a recent development, with the model still in an early stage of adoption. Possibly, its most famous exponent is Goldman Sachs, which offers a set of APIs for creating bank accounts, making and tracking payments, and accessing the details of their activity. Developers can leverage the Bank’s infrastructure to build financial experiences into their own front-end applications³.
• Marketplace: The marketplace model is gaining popularity with many banks creating marketplaces selling best-in-class financial and non-financial offerings in one place. In a way the marketplace is the opposite of the BaaS model because here, banks – much like departmental stores – aggregate the best options from other providers to fulfil even the non-banking needs of their customers. Apart from the earlier mentioned DBS Bank, U.K.’s Starling Bank runs a successful marketplace featuring a variety of services, such as wealth management, pension accounts and accounting software.
• Utilities: A very interesting spin-off is the utilities model where big banks capitalize on their scale and efficiencies to provide back-end infrastructure services to other banks/ providers who then focus only on front-end activities. Payment utilities are now quite common, and the action is picking up in banking as well. For instance, ABN Amro Bank has set up Stater NV providing mortgage services, such as collection, communication and loan management, to other small lenders and fintech companies.

APIs – Enabling the digital ecosystem, and fostering the open banking paradigms

The above business models, while different on the surface, are all powered by APIs on the inside. APIs work at several levels throughout the open banking enterprise: specialized internal APIs or microservices enable banks to solve problems and create new value for clients; APIs help in customer acquisition and product expansion; an API led architecture can enable banks to innovate on par with the best companies in the world.

Therefore, the importance of a sound API strategy can never be overestimated. While developing their APIs, banks should pay heed to the following:

• APIs must be based on good design principles and values, such as user-centricity, reusability and end-to-end process coverage.
• The strategy should produce a strong operating model, as well as a monetization model that supports key business values.
• If the business is to adopt an API-first approach for delivering new features in the future, it must design APIs for maximum reusability, today.
• A modern API management platform with clear ownership is essential, as is a sound governance mechanism for executing internal and external APIs.
• Last but certainly not least, the bank’s leadership should nurture an API culture throughout the organization. Having the right talent and training resources is critical, because over time, the bank must have multiple agile teams, working across the enterprise, developing APIs.

What’s next for APIs and Open Banking

After a slow start driven by regulatory compulsion, Open Banking has started to come into its own. It is a significant opportunity. Open banking is set to become mainstream and will pave way for new possibilities such as open finance. It will eventually foster market competition and innovation creating a win-win proposition for both financial institutions as well as for varied customer segments.

Sources:

1. Mark Boyd, Arjit Mathur, Phuong Pham (2020, August 4). Open Banking Trends Q2 2020: Banks. https://platformable.com/q2-open-banking-trends-banks/
2. EFMA, Infosys Finacle: Innovation in Retail Banking 2020 https://www.edgeverve.com/finacle/efma-innovation-in-retail-banking
3. Goldman Sachs Transaction Banking (TxB) APIs https://developer.gs.com/docs/services/transaction-banking/

Platformification is a relatively new business model happening in FinTech that is enabling companies to lift-out entire operations and benefit from mutualisation.

By Andrey Yashunsky, CEO and Founder, Prytek

Platformification is arguably the love child of increasing consumer demands, constantly changing industry regulations and the emergence of a range of next-generation technologies. In banking, for example, the never-ending regulatory standards have made it nearly impossible for smaller and medium-sized banks to invest in the technology that larger banks can comfortably (and quickly) afford to build in-house. As a result, platformification has quickly become a lifeboat for many banks that are determined to keep up with the digital transformation taking place in the industry, while also maintaining profitability.

BOPaaS (Business Operating Platform-as-a-Service) describes an advanced style of platformification that combines the standard benefits of managed services, with advanced access to cutting-edge technology and leading industry expert advice. Through its adoption, firms immediately benefit from a vertically integrated ecosystem: new technologies are designed and built at the heart of this ecosystem, which can then be cross-leveraged across all the businesses connected to it. This technological innovation, which is made possible through the mutualised R&D costs, helps to entirely transform business operations and job functions. A recent example is Karbon, a customer lifecycle management (CLM) product that is currently being offered by Delta Capita, a global managed services, technology solutions and consulting provider. The creation of Karbon was made possible through Prytek’s investment in Blackswan.

A hybrid approach to managed services

The integrated nature of BOPaaS is what makes it special: It is a hybrid of technology-based managed services and recommendations, engagement and interactions with industry specialists. Both are equally important. The development of state-of-the-art technology would be wasted if it wasn’t in the hands of an expert that knows how to effectively implement it in a way that can transform operations, and ultimately enhance the end-user experience. It is also important to know that it is not just the financial services industry that can benefit. For example, Prytek also operates BOPaaS in the cyber-education and HR sectors, and has plans this year to expand its reach further. Ultimately any industry that relies on human data input, or expensive centralised models, and is determined to improve client satisfaction could benefit from platformification and BOPaaS.

Driving technological and service innovation

These types of platforms are not only driving technological innovation, but they are also enabling firms to spend more time engaging with clients and strengthening business relationships. They are taking over the responsibility of the businesses’ non-differentiating operations as well as the responsibility to monitor for changing regulations, customer demands and digital transformation opportunities. By freeing up more time and effort of employees, BOPaaS customers can focus on the aspects of their business that makes them truly unique – which is almost entirely the way it delivers its customer service.

Like it or not, at some point in your life you will buy an electric vehicle (EV). Perhaps it will be for yourself (a powerful Tesla Model X or a sensible Toyota Prius) or for your company (a Mercedes eSprinter for deliveries or a large Renault DZE for hauling heavy goods) but either way the EV revolution is coming and every watt of power that charges an EV will need to be paid for.

By Anthony Wicks, Key Account Manager, Self-Service GSV – Parking & EVC, Worldline

In the UK, the government is phasing out internal combustion engine (ICE) vehicles starting in 2030 – a deadline that the current administration brought ahead by 10 years. This, combined with a system of grants for electric vehicles and charging points, should drastically reduce vehicle emissions – a source of not just atmospheric CO2 that contributes to climate change, but nitrogen dioxide and fine particulate matter that has been claimed to cause some 40,000 deaths per year in the UK.

Consumers are getting on board too. There are nearly 500,000 EVs on the UK’s roads – a small fraction of the 38.8 million total, but five times what it was in 2015. The current European EV fleet stands at 2.3 million in 2020, however it is estimated to rise to 34 million in 2030. As charging infrastructure grows, as it becomes as common to see EV charging as it is petrol stations (the number of which have fallen by 35% since 2000), more people will buy EVs. Currently, they are a niche, with buyers purchasing them either out of environmental concerns or just for the cool factor, but they will become a standard choice for many drivers over the next decade.

Building a new infrastructure around fuel

Charging an EV is not like refuelling an ICE vehicle, it takes much longer. Currently, there are three categories of EV charger: slow, fast and ultra-fast (also known as rapid and ultra-rapid, and occasionally you may find it broken down into slow, fast, rapid and ultra-rapid). Slow chargers, the most common, use around 7kW and can typically fully charge an average EV car from empty in eight hours – these will typically be overnight chargers that people will have in their homes. A 50kW model can add 100 miles of range in around 35 minutes, and ultra-fast 150kW chargers are available that bring charging times down to a few minutes.

This means that the whole structure of charging a vehicle must change. It may become common to leave your car on charge in your garage overnight rather than ever visiting public charging stations if you are only using your vehicle for commuting and shopping. Drivers who must travel further afield might choose to charge in purpose-built charging areas with cafes and entertainment, much like service stations. We are increasingly finding that businesses that have little to do with fuel offer EV charging as an added extra – you can recharge your vehicle while shopping at a supermarket, or anywhere that there is parking.

It also means that payments must adapt to the way that people will be using chargers. Charging points will mostly be unattended, so ensuring that customers have a positive experience, that customers who need help can access it and that unscrupulous customers cannot commit fraud will be all down to the design and capabilities of charging points.

What EV charging operators need

For the reasons above, charging stations will be unlike any other piece of infrastructure that we use currently, somewhere between petrol pumps and vending machines, but in some ways not like either of these.

Consider the question of when the payment for charging is taken: if we use the model currently used on vending machines, where a customer taps or swipes their card, their details are taken, they make their order and the amount is deducted from their account, then there could be problems. If a customer taps their card, uses £100 of charging but does not have the funds to pay for that amount, what happens? If you use your card after you are done charging what would prevent somebody from simply driving away? If you pay upfront for £100 of electricity but have to abandon the charging process halfway through, how is the refund processed? If a customer pays by smartphone, which currently has a £100 limit, then what happens if they leave their car charging for £110? Will tourists be able to pay in their own currency? Then there are the payment methods that modern consumers have come to expect: app payments, ‘click and collect’, loyalty programmes (which will need to carry over from existing fuel loyalty programmes) and an omnichannel experience that keeps the same interface across multiple devices.

You can see how complicated EV charging can get, and this is before we have considered security protocols like PSD2 and 3D Secure or new banking rules like Open Banking. EV Payments tie together two pieces of what will become everyday life for billions of people: EVs and digital payments. Businesses need to get the payment system right because consumers who find the already long-winded process of charging an EV difficult can always switch to charging at home.

Solutions for the day after tomorrow

New payment solutions, such as Worldline’s Easy EV hardware and software, are designed to be the one-size-fits-all solution to the growing EV charging market, able to adapt to any EV hardware and any client business model across Western Europe. The systems are compatible with a huge range of payment types and should new payment methods emerge they can be rolled out easily.

The solution works with both end-to-end and standalone payment processing, with pre-authorisation and electronic receipts available as standard for users opting for end-to-end processing. What’s more, acquiring on an end-to-end solution is included for both a standalone version as well as the full end to end solution. This means that whichever solution EV charging providers opt for, in any country in Europe, they can be assured that they are getting a service that ensures that customers can pay for their charging.

Security is a major concern for any payment, especially at unattended electric charging stations, and the latest security standards are built in at the point of sale without adding extra steps for the customer. As is standard in modern payments, this security layer is designed to be as frictionless as possible.

We know that EVs are going to become standard soon, probably overtaking ICE vehicles several years before the 2030 deadline. Payment providers, charging station manufacturers and operators should work together to create payment experiences that make something that consumers will have to do several times a week into a joy instead of a burden.

Many banks turned to low-code automation to handle new government-backed lending programmes and the surge in demand that came with them. For the banks and financial institutions involved in processing stimulus loans, the volume of applications and complex administrative effort required has been potentially overwhelming.

By Herbert Schild, Industry Lead, Financial Services, Appian

By simplifying and automating loan processes, low-code can accelerate the time from loan application to disbursement, which could be a lifeline to businesses. Low-code automation technology allows financial institutions to create applications quickly and integrate them seamlessly into existing systems.

If a new lending scheme, regulatory or loan criteria change comes in, applications can be flexibly adapted at any time and at pace. Applications developed on a low-code automation platform can be deployed immediately and used across devices. Whether in the cloud, on-premise or as a hybrid, a low-code automation platform should comply with the highest security standards. This allows bankers and mortgage advisors to work on a loan at any time and from any location with data privacy and information security. The pandemic and associated lockdowns changed work culture as we know it. Enabling employees to work from home with sensitive data in a secure, flexible way has never been more important and it is the way of the future.

Robotic Process Automation (RPA) for routine, repetitive tasks

RPA or even digital loan applications are still relatively underused in the banking industry, despite available options and potential to add value. One can automate rules-based daily routines such as data entry and updates across systems, freeing employees from repetitive tasks so they can take on new and more strategic work. In addition, RPA reduces risk and human errors from manual data entry. Ultimately, data quality improves for faster and more accurate lending assessments.

In practice, banks also take an economic risk every time they add new customers. Complying with regulations like Customer Due Diligence (CDD), Know Your Customer (KYC) and Anti-Money Laundering (AML) screening is expensive and time-consuming. RPA speeds up the customer onboarding and compliance processes by automatically capturing, enhancing, and delivering precise data for faster loan qualification. This speeds up the application process, and leads to faster,more reliable approvals.

Risk management, Artificial Intelligence (AI) and Intelligent Document Processing (IDP)

The promise of AI remains alluring yet still seems out of reach for most practical technology implementations. However, the reality is within grasp. AI can support financial institutions in a variety of ways, including quick loan programmes, from processing applications to issuing funds. Intelligent AI systems can identify multiple applications from the same borrower or from a non-existent company, thus playing an important role in risk and fraud detection and prevention. Based on internal information from credit decisions and customer repayment behavior, as well as external data sources such as credit scores, AI can recognise patterns to assess new loan applications. Such information can help determine the creditworthiness of the potential new or existing customer for faster loan decision.

AI does more than provide value on risk management. Intelligent Document Processing (IDP) technology takes unstructured data in PDFs and other documents, converts them into structured data to help systems process them. Machine learning and AI technologies are combined and supplemented by employees, if necessary. This combination of people, technology and data enables lenders to concentrate on what’s important in issuing stimulus loans without being slowed down by tedious data entry and analysis.

When time is of the essence, low-code automation has the advantage

Governments have introduced various stimulus lending packages but many banks struggle with processing loan applications quickly enough to help keep businesses afloat during the pandemic. Processes that can’t keep up with change or require lots of manual intervention to adapt are substantial barriers. The adoption of a low-code automation platform has enabled credit institutions across the world to react quickly to change and advance digitisation.

RPA, AI, IDP and data integrations on a low-code development platform, empowers change – fast. Banks and financial institutions can adapt to the circumstances and growing demand, as well as automating manual and complex processes to improve effectiveness, manage risk, increase customer and employee satisfaction. These are crucial to succeeding in today’s decentralised work environment.

The ever-changing expectations and demands of customers emanate from the experiences they are accustomed to in daily life. From having a paperless customer experience at an Apple Store to using Alexa to order household items are now common and have set experience benchmarks for banks and lenders.

By Ajay Vij, Head – UK, SVP – Industry Head, Financial Services, Infosys

The financial services industry is challenged by the expansion of disruptors inside and outside of the industry. Firms such as digital mortgage brokers, price comparison sites, and credit bureaus will combine to enable one-click product research, threatening to relegate banks to back-end product providers. Price comparison sites and personal finance management (PFM) apps will merge, combining a proven business model around product comparison with deep financial insight.

The financial services enterprises that are driving accelerated growth and success today are the ones who are finding fast lanes through technology, data, and processes to leverage and expand their ecosystems, and to sense, predict and respond to customer experience opportunities.

Customer experience makes or breaks organisations and plays a huge role in the success of their products and services.  Since eliminating friction from user interaction is a huge priority in an experience economy, businesses need to focus on organising their products, systems, and technology infrastructure around that goal. The best experiences in the market are built on a modern technology foundation that leverages Artificial Intelligence, Machine Learning, Big Data Analytics, etc., to create personalised products and contextual engagements so that the right proposition is made to the right customer at the right time. With products becoming commoditised, customer experience has emerged as the biggest source of competitive advantage.

Therefore, it is no surprise that experience transformation is a major goal in any digital transformation effort. In fact, for 87% of the respondents in the latest EFMA Infosys Finacle Innovation in Retail Banking survey, customer engagement is at the core of their transformation plans. But experience transformation is not merely the digitisation of manual processes; it is a design-led approach that puts the human user—customer, business partner, and employee—at the centre.  This can be done through bringing several elements together, from employee and customer experience to data intelligence and advanced analytics. And it’s not just the ‘glass’ or user interface that’s delivering the experience, but a living, breathing ecosystem of partners offering best-of-breed products, services and interactions to fulfil ever-increasing expectations.

Incumbents versus challengers

In a survey of millennials conducted a few years ago, 70% of the respondents said they would rather bank with Google than a traditional institution. Having earned the appreciation of customers for best fulfilling their expectations, digital players, such as big tech, FinTech, challenger banks, and neo banks, are now enjoying their trust as well—and attracting these notoriously fickle consumers in droves.

In response, traditional banks need to consider both the customer experience and customer journey, and the role technology will play in accelerating innovation of intuitive tools for customers. Equally important is accelerating the delivery of employee-facing digital tools and experiences. This will create a new digital agenda focused on transforming user experiences, so they become human-centric and deliver greater customer value and enable employees with new tools and capabilities.

Another thing to consider is the investment in resources. Even large financial services organisations don’t have full-fledged experience design departments. Most outline a broad vision of experience and leave the details to others, typically their outsourcing partners. Ideally, they should integrate experience into the core of their business as a part of day-to-day operations.

Next steps

Looking ahead, financial services companies have their task cut out in 2021. In 2020, the pandemic forced almost every organisation into digital overdrive; this year, they must build on that effort by accelerating experience transformation. That means digitising end-to-end journeys, processes, product offerings and interventions.

As FinTechs and other new entities come under increasing regulation, they are gaining the confidence of all customers. Incumbent firms must set out to reclaim the trust, and the customers, they have ceded to their rivals. But these changes to customer experience can only be carried out if there is a supportive environment—in other words, a culture of innovation, quick decision making, the right talent and a ‘digital first’ mindset.

Here, the support of a trusted technology partner can be crucial for driving change throughout the organisation. When identifying a partner, companies must look for expertise in designing human-centric customer journeys and experiences besides technology credentials in areas such as data intelligence, platforms, process optimisation, security and compliance. Together, the organisation and the right partner will be able to foster the right environment and resources to provide a winning customer experience.