Digital banks raised over $1.1bn in fresh funding throughout 2018 in Britain, a figure that is set to be dwarfed if the current pace of growth continues to demand the attention of investors. Claudio Alvarez, Partner at GP Bullhound, explains for Finance Monthly.

Europe is truly leading the fintech charge, accounting for roughly a third of global fundraising deals in 2019, up from only 15% in the fourth quarter of 2018 according to our data. These are digital firms raising globally significant levels of capital. Adyen, the Dutch payment system, is now one of the frontrunners to become Europe’s first titan, valued at over $50bn. Europe has become a breeding ground for businesses that can go on to challenge US tech dominance, and it is fintech where we will find most success. Europe’s unique capacity for incubating disruptors is a phenomenal trend to have emerged over the past few years.

It’s true, European culture has always been more open to contactless and cashless, in contrast the US, where legislation and the existing banking infrastructure make adopting new technologies in banking slower and more convoluted. Europe has been able to take an early lead, while the US remains fixed on dollar bills.

As the ecosystem evolves, borders will become less relevant and markets more integrated, allowing the big players based in Europe to expand into further geographies with greater ease. European success garners the growth, momentum and trust needed to brave new regions and cultures. Monzo won’t be alone in the US for long.

As the ecosystem evolves, borders will become less relevant and markets more integrated, allowing the big players based in Europe to expand into further geographies with greater ease.

Whilst the Americans’ slow start has allowed European start-ups to become global players, it’s also true that the regulatory environment has distracted the European big banks and opened up the space for innovative and disruptive newcomers. While PSD2 has eaten up the resources of the incumbents, the likes of Monzo and Revolut have focused on consumer experience, product development and fundraising. The result? Newcomers are able to solve problems that older institutions simply don’t have the capacity to address.

However, a word of warning: traditional bricks and mortar banks aren’t dead yet. For one, digital banks will still need to justify the enormous valuations they’ve secured recently, and will have only proved their worth if, in 3 to 5 years’ time, they have managed to persuade consumers to transfer their primary accounts to them, which would allow digital banks to effectively execute on their financial marketplace strategies

Meanwhile, traditional banking institutions have a plethora of options to fend off the fintech threat and most are developing apps and systems that mimic those created by the digital counterparts. Innovation isn’t going to come from internal teams – it needs to be a priority for the old players and they need to invest in third party solutions to excel as truly functional digital platforms in a timely manner. In the first instance, the traditional banks will need to solve the issues that pushed consumers towards the fintechs and secondly, work on attracting consumers to stay by offering, and bettering, the services that make fintech’s most attractive.

Competition breeds innovation. For the fintech ecosystem as a whole, this new need for advancement is only good news – a rising tide lifts all ships. As traditional banks try to innovate and keep pace, we’ll see them investing in other verticals in the fintech market. Banks’ global total IT spend is forecast to reach $297bn by 2021, with cloud-based core banking platforms taking centre stage. Digital banking may have been the first firing pistol, but the knock-on effect of the fintech revolution is being felt across the board.

The fintech boom shows no sign of bust, market confidence is riding high and will continue supporting rapid growth. The aggressive advance of digital banks has opened doors for a whole host of fintech innovation - from cloud-based banking platforms to innovation in the payments sector. The number of verticals that sit within financial services creates a plethora of opportunity for ambitious and bullish fintechs to seize the day.

Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, has published its second annual financial crime report today. Innovation and the fight against financial crime: How data and technology can turn the tide highlights that almost three-quarters (72%) of organisations have been victims of financial crime over the past 12 months with a lax approach to due diligence checks when onboarding new customers, suppliers and partners cited as creating an environment in which criminal activity can thrive. This wake-up call has led to 59% of companies adopting new technologies to plug compliance gaps.

In its 2018 report, Refinitiv outlined that $1.45 trillion of aggregate turnover is lost as a result of financial crime. This year’s report shows that the cost could indeed be much greater. Only 62% of the 3,000 compliance managers Refinitiv surveyed across 24 geographies claimed that financial crimes were reported internally, and just 60% said that they were reported to the relevant external organization.

Over the next year, companies are intending to spend on average 51% more to mitigate the crisis. The increased investment emphasises the priority placed on fighting financial crime in 2019 and reflects the amount of pressure respondents are under to be more innovative to both reduce risk and costs.

According to the report, an overwhelming majority of respondents (97%) believe that technology can significantly help with financial crime prevention with cloud-based data and technology the top choice, followed by AI and Machine Learning tools. Technology-driven solutions, such as Artificial Intelligence and Machine Learning, are already allowing businesses to implement processes and check up to millions of customer and third-party relationships, more quickly and efficiently.

Phil Cotter, Managing Director of the Risk business at Refinitiv, said the results showed that businesses need to do more to invest in technology to address the problem: “It is clear from the results of this report that businesses exposed to financial crime threats need to maximize their use of technology and future collaboration could prove key to realising the potential of innovation, particularly between tech companies, governments and financial institutions.

“Significant advancements in technology, facilitated by innovations such as AI, ML and cloud computing, are already under way. These technologies are enabling intelligence to be gathered from vast and often disparate data sets which together with rapid advances in data science, are transforming the approach to compliance, streamlining processes such as Know Your Customer (KYC) and helping to uncover previously hidden patterns and networks of potential financial crime activity.”

While the report focuses on the many emerging technologies coming on stream in the fight against financial crime, it also urges organisations not to overlook another vital form of innovation – collaboration. Just over eight in 10 (81%) respondents said that there is some sort of existing partnership or taskforce  in their country to combat financial crime. 86% believe that the benefits of sharing information within such a partnership organization outweighs any possible risks.

In 2018, Refinitiv partnered with the World Economic Forum and Europol to form a global Coalition to Fight Financial Crime. The Coalition is working with law enforcement agencies, advocacy groups, and NGOs to address the societal costs and risks that financial crime poses to the integrity of the global financial system.

At stake are our personal data, as well as our monetary possessions. While the concern for the former is a rather new phenomenon, the latter have been guarded by a multi-layered web of intermediaries. And still banks and other financial institutions regularly witness the weaknesses of this set-up. Below Igor Pejic, author of new book ‘Blockchain Babel: The Crypto-Craze and the Challenge to Business’, confronts the question: Is the Blockchain Really Unsinkable?

In recent years a technology hailed for immutability entered the stage: the blockchain. This cryptographically secured, distributed ledger technology was initially designed to bypass the financial system by enabling digital currencies, yet today banks are the most active in blockchain research, trying to reap the benefits of this supposedly tamper-proof ledger. But is the blockchain really unhackable?

In many a head there are probably stories whizzing around about stolen bitcoins and hacked exchanges. Mt. Gox is such a story. In 2014 Mt. Gox was the world’s largest crypto-exchange which processed around 70% of the world’s bitcoin transactions. 850.000 bitcoins were lost (of which around 200.000 were recovered). Further hacks such as the one of the Slovenian exchange Bitstamp followed. Most recently Quadriga, a Canadian exchange, made headlines because its founder Gerald Cotten supposedly passed away on a trip in India. He was the only one to knew the private keys to the wallets of 115,000 customers with funds worth $143m. That funds are thus not accessible and lost.

Yet when commentators use these examples to sow doubt about blockchain-security, they mix up different dimensions of data security, in particular data’s integrity during a transaction with its integrity before or after a transaction. The aforementioned hacks can be attributed to lax security standards aside of transactions such as the storage of private access keys. While parts of the crypto-sphere are reacting – Bitstamp has introduced two-factor authentication to access funds – many wallets and exchanges continue to operate with hair-raising security standards.

But what about the mechanism itself? Can attackers inject bogus transactions or rewrite past ones? This answer depends on the validation mechanism each particular blockchain uses. Let us illustrate this with bitcoin and other chains that work with so-called proof-of-work validation. In this set-up, validator nodes, also known as miners, are investing massive computing power to solve a mathematical puzzle with trial and error mechanisms. They are interested in the “right” solution, because only if they find it first, they are rewarded with freshly minted coins. Once found, the correct value can be verified quickly by the network. The major danger here is that a possible attacker gains control over more than 50% of the hashing power in a network and can vote a wrong truth into reality. The attacker could then submit a transaction to the network, and after getting the good or service he paid for simply use his computing majority to fork the network at a point in time before he sent the money.

Critics will point to the infamous DAO-hack. The DAO (Decentralized Autonomous Organization) was a leaderless organization that issued a token built on Ethereum’s smart contract code. A hacker exploited a cryptographic vulnerability to capture $50m. An ideological conflict of the Ethereum community prevented a soft fork that would have reversed the hack. Thus, a hard fork split the chain into Ethereum (version without the hack) and Ethereum Classic (version including the hack). But even this example was not a hack of the blockchain, but rather a bug that pestered the DAO-code sitting on top of the Ethereum-blockchain. Despite many problematic constellations – e.g. a high concentration of mining pools, as well as a limited number of ISPs hosting large parts of prominent blockchains – the mechanism as such has never been hacked. Attacks are very expensive and the advantages for the most part short-lived.

Does this mean the blockchain is immutable? No. We have to get the fairytale out of our heads that there is something like absolute security. There is always a way to trick the system, even if it is highly unlikely as the aforementioned 51%-attack. The question we should ask instead is whether blockchain is more secure than current systems. What most most critics of new payment technology do not know is that even the SWIFT-network, which enables monetary transactions between 11.000 financial institutions worldwide, has been subject to hacking in the past. In one heist, banks in Bangladesh and Ecuador lost millions. Blockchain technology has proven to be less susceptible to several attack vendors while doing away with intermediaries. This should render the discussion about absolute immutability superfluous.

The financial sector has been especially keen to reap the benefits that Artificial Intelligence (AI) technology can provide, but there are still some fears that these innovations will cause huge job losses and remove the human role from businesses. Here Frank Abbenhuis, VP of Strategic Alliances at Axyon.AI, discusses the current AI landscape, touching on some the key steps ahead.

What is AI now?

Over the past 20 years, AI adoption has increased dramatically, due to some key shifts in the market. Firstly, technology has advanced hugely – not only in its ability to process large quantities of information in a fast, accurate manner but also in how inexpensive computing has become. The data that AI utilises has also become hugely prolific, with both individuals and businesses producing huge amounts of data on a daily basis. The result is not only cost effective and fast, but also incredibly accurate.

However, even with this foundation, AI would not be witnessing increased adoption if it were not practical for financial services. Through AI, financial institutions are now able to offer an improved customer experience, identify new sources of business growth, determine more effective models to follow, and develop broader aspects of the organisation: from enhanced productivity to better risk management.[1]

AI as a tool

This increased adoption of AI has inevitably caused concerns over job security, with fears that jobs will become automated as a result.[2] However, the reality is that AI has come at an ideal time to address the demands that banks are facing.

For example, the customer experience is now a key focus in building a business’ reputation. To remain competitive, companies need to move away from the ‘back office’ process-driven tasks and increase their client engagement strategies. As such, the more that AI can support these internal functions, the more that the business invests in building those vital client relationships.

Naturally, there are also concerns around how AI can be implemented. Fortunately, banks and other businesses in the financial sector often have enough historical data available to train an algorithm and run the task automatically. If this automated function is then combined with human oversight, the business can improve the quality of advice given to clients. In this way, AI no longer takes over a person’s role, but enhances their functionality in the business.

Making the most of data

Even with this progress, there are still certain areas in financial services where AI can be enhanced. For example, syndicated loans desks have a wealth of historical market data that is not leveraged to its full potential.

If AI were implemented here, algorithms could be used to analyse all previous deals and produce the likelihood of specific actions being taken. In this scenario, AI would not only be able to access which investors participated in every syndicated loan, but also the high-level structure of these loans – something that would be impossible for a single human mind to achieve.

This is just one example of how AI can enhance those in capital markets and asset management. The sheer amount of data that these sectors produce make them ideal for the predictive capabilities of AI. The only impact this level of automation will have on those working in these industries is smoother processes and improved output.

With all the fear that can surround new technologies in financial services, AI is set to only improve how people work in the sector. Through taking advantage of huge amounts of data, AI has the potential to streamline internal process and increase overall output – with the added benefit of improved accuracy and reliability.

[1] https://www.mckinsey.com/industries/financial-services/our-insights/analytics-in-banking-time-to-realize-the-value

[2] https://www.theguardian.com/money/2019/mar/25/automation-threatens-15-million-workers-britain-says-ons

The most obvious example of this is the criteria you need to meet in order to get a mortgage. Although there are certain assumed standards, each lender has its own criteria. As a consumer, that leaves you in a precarious position of shooting in the dark when submitting mortgage applications.

Things don’t get any better when you look at the data surrounding mortgage rates. Although all stats can be twisted to suit a specific agenda, there are times when consumers won’t know what to believe. For example, if you compare the headlines from the Financial Times and UK Finance in May 2019, both had a different take on the current lending status.

Same Data, Different Conclusions

While lobbying group UK Finance focused on approval rates being up by 6% year-on-year and 2% between February and March, the Financial Times had a different spin. For reporter Imogen Tew, the Bank of England’s Money and Credit report stood out because approvals had dropped by 4.5% between February and March. Even comparing just two news stories, you can see how the market is confusing at times.

Fortunately, as it often does, technology is capable of cutting through the unnecessary and picking out the relevant. On a basic level, mortgage calculators are an easy way for prospective borrowers to see how much they can get. However, with these calculators using generic data and broad assumptions, the answers are nothing more than a guide. Building on this technology, mortgage brokers offer sophisticated calculators that help determine the best products for a single user.

Using AI-style technology, free-to-use online mortgage broker Trussle matches borrowers and lenders. Unlike generic calculators, the software compares personal details against 12,000 mortgage deals. From there, daily market comparisons are carried out to ensure the user is given recommendations that are based on the latest market conditions. Indeed, it’s this dynamism that counters the complex and volatile nature of the mortgage industry. While it may not necessarily make mortgages any less complex, using tools like this can help simplify the application process.

Streamlining the Mortgage Business

In conjunction with a desire in recent years to streamline the industry, developers have also adjusted their focus to lender technology. Indeed, as the market has become more competitive, lenders with the most user-friendly systems are likely to win favour with the general public. Latching onto this trend, Fiserv launched Mortgage Momentum in February 2019. Described as an “end-to-end” system, Mortgage Momentum is designed to improve the lending experience.

Part of the software’s appeal is that it makes the lending process easier: by simplifying the overall process, the product is able to make borrowing more attractive. In other words, by making it easier for consumers, the lender has the ability to generate more business. What’s more, the product also uses machine learning to understand the market’s shifting dynamics. Using these insights, lenders can refine their products to meet the latest economic and consumer demands.

Mortgages will never be an easy topic to master. Changing interest rates, market forces and economic stability will always ensure a level of uncertainty. However, with modern technology, things are easier to grasp than they’ve been before. Indeed, thanks to calculators, brokers and advanced lending software, borrowers are shooting at slightly lighter targets than they once were.

Financial technology is rapidly progressing, so fast that people are forgetting the world economic crisis that happened 10 years ago. With the evolution of financial technology, new services and better options are being created for consumers all over the world. Digital technology has created a much better user experience for users all over the world, and sky’s the limit indeed. This is what you can expect from financial technology five years from now.

More digital engagement

It wasn’t too long ago that, for every financial service you needed, a trip to the bank was a given to get that service. With the advent of technology and the age of digitization, those days are no more. You can literally pay every single bill of yours and transfer money to people across the world with a mobile application at your disposal at any time and any place, and the evolution of these services is rapid and continuous. The digitization of financial affairs means a much better user experience, which reflects positively on revenues and sales numbers. People love slacking around and still getting things done, and in the future, there’s no telling how much more comfortable technology will make banking for users.

More services

As more technologies emerge and newer doors open, more services are being created to cater to people’s every financial need using financial technologies. For instance, you can now get an advance on that inheritance of yours that’s been taking ages to get processed in the courts. In this article you can learn about their conditions and how it works if you want to get an advance on your inheritance with minimal effort and quite an easy digitized process. This financial service, and many others, helps plenty of people who might be in a tight spot and in urgent need of cash, but are unable to access any due to the lengthy process.

Newer technologies

The quest to find newer technologies to facilitate and make things better for users is non-stop. For instance, banks now in some countries are operating hybrid clouds and cloud computing to address issues of security, compliance, and data protection. Hybrid clouds also offer reduced costs and a much better operational efficiency, making them truly the future of banking services. You even have artificial intelligence (AI) been implemented in some places, hopefully to an extent that in the future it can help in back office operations, customer service, and much more!

Is it a good thing or a bad thing?

An optimist will find the current advancements being made in financial technology truly remarkable, for they have the potential to create a better and more comfortable user experience for mankind and actually help people in need of such advancements. On the other hand, there are some who might worry about the digitization of something as critical as financial services, and dread the reliance on machines to manage our finances. While both opinions have their pros and cons, one can’t deny the fact that technology is moving at an exceptionally rapid rate, and it’s quite exciting to view what’s next in store.

To put this into perspective, the U.S. banking system alone held an estimated $17.4 trillion in assets at the end of 2017, whilst it also generated a staggering net income of $164.8 billion.

Banks are set to become more profitable in the future too, with advanced technology such as artificial intelligence (AI) expected to introduce more than $1 trillion in savings by the year 2030. This highlights the impact that technology is continuing to have on banking, with this relationship growing increasingly intertwined with every passing year.

In this article, we’ll explore this further whilst asking how the most recent innovations are impacting on banking in the digital age.

1. It has Ushered in the Age of Digital and Mobile Banking

Whereas banking used to require standing in queues and liaising with tellers, most transactions are now completed through digital means. In fact, an estimated four out of every 10 UK customers now bank using a mobile app, and this number is set to increase incrementally in the years to come.

So, whether you want to make an instant payment, transfer funds or open a brand new account with a service provider such as Think Money, the quickest and most efficient way of doing this is through digital means.

Technology is also making digital banking increasingly secure, with methods such as 2-step authentication having transformed the space in recent times.

We’re also seeing a significant rise in the use of biometric security methods, including advanced techniques such as fingertip authentication and facial recognition. These options provide the ideal compromise between high security and a seamless customer experience, and this something that remains at the very heart of banking in the digital age.

2. It’s Using AI to Improve the Customer Experience

We touched earlier on AI, and how this will enable banks to make considerable savings and become more profitable in the future.

AI is also having a considerable impact from a consumer perspective, however, especially in terms of the banking experience that they enjoy.

Take the use of chatbots, for example, which can enhance the onboarding process when positioned as helpdesk agents. More specifically, they can answer the most basic and commonly asked questions and anticipate popular requests, enabling customers to resolve their queries as quickly as possible.

AI can also afford bankers a more detailed look at their customers’ behaviours and financial history, making it easier for them to provide real-time insights and offers that offer considerable value.

3. It’s Improved Data Protection in the Banking Sector

In the first half of 2015, it’s estimated that around 400 data breaches took place in the U.S. alone.

This number has fallen in recent times, as banks have identified the core issues that compromise customer details and introduced measures to provide more robust data protection.

Aforementioned biometric and 2-step authentication techniques have helped to secure users’ passwords, for example, whilst phishing scams and malware are also being combatted by 128-bit encryption and higher.

As a customer, you can also take advantage of secure wireless connections to safely access your bank accounts in the modern age, negating the risk posed by public networks and unsecured Wi-Fi hotspots.

The customer pain point defined by the limited function of outdated banking monoliths was realised some time ago. And, as we look at the state of the market in 2019, there are many vendors out there all vying to do the same thing: to bring banking to the state of digital usability that other industries such as e-commerce and entertainment reached a long time ago. Below, Finance Monthly hears from Tobias Neale, Head of Delivery at Contis  on the three key areas to look at in order to be a successful FinTech in 2019.

Naturally, like any crowded marketplace, brand differentiation is vital in order to stay competitive in FinTech. After all, when there is an approximated £20 billion in annual revenue up for grabs in the UK alone, it makes sense that there are plenty of incumbents as well as new players joining every year, aiming to get a piece of the pie.

So, what truly makes a successful FinTech company stand out right now? Where are the areas that brands can truly get ahead? Also, and perhaps most importantly to consider, does FinTech look set to eclipse traditional banking altogether, or is there a way the two can grow closer?

Innovation

Building new infrastructure for financial services is not a new venture – the big payment giants have been shaking up the financial solutions market through regular technology investment projects for some time. However, given the recent wave of innovation instrumented by new and emerging rivals, it is increasingly evident that innovation has gone mainstream – beyond the big banks – and that continuous development is integral to keep pace for everyone, whether new or established. These new entrants, who put technology innovation at the forefront of their business, recognise that it is not just a case of creating technologies to contend with the big banking and payment giants, but also creating with them in order to integrate with and support them.

Agility

FinTech moves fast, and the pace at which a service provider can be disruptive is that which sets competitors apart. Start-ups have the advantage of being free of legacy systems that often prove a huge inhibitor to modernising quickly enough to keep pace for their long-standing and well-established counterparts. As a result, new entrants will do well to take advantage of this agile upper hand by ‘moving fast and breaking things’ with mobile-focused products. By quickly adapting to fill gaps left by traditional banking providers they can deliver services in record time.

Customer service at the core

In recent years, customer trust in the banking and payments industry from both the has been put to the test thanks to disruptions and data breaches affecting both businesses and consumers alike . This means that there is ample room for disruptors to capitalise on the need for a reliable and trustworthy provider that offers great services, extensive support and guidance, particularly for prospects that are looking to establish their first increment of banking services into their ecosystem.

What is important to remember is that disruption is not all about overtaking older established rivals – part of what makes a successful FinTech in 2019 is the ability to integrate with these institutions and move digital transformation for the industry and shared customers. Keeping innovation, agility and customer service at the core of a company’s proposition is what will truly define those looking to follow the success of companies like Monzo and Revolut, in 2019 and far, far beyond.

Smartphones may be our first introduction to 5G, but it's most significant impact may be felt in how it connects us to everything else. Tom Chitty reports from Mobile World Congress.

Industry experts CACI forecast that 2019 could very well see mobiles usurp PCs as the main appliance for internet banking. It’s even predicted that by 2023, 72% of Brits will use apps as their main financial management source.

But mobile banking has already transformed how we spend money. Let’s explore how.

1. Average Spending

Thanks to banking apps, it’s easier than ever to access money. Access to phone signal granted, you can transfer money, anywhere, at any time. However, with this comes the risk of overspending.

And many people can’t resist the temptation to buy more than they need. In fact, a recent report by Bain & Co. revealed that on average, mobile payment users spend twice as much as those who don’t.

Therefore, what we’re spending money on – as well as how we’re spending it - has already been hugely affected by mobile banking.

2. Budgeting Apps

Very often, with the risk of overspending comes an increased demand for easy money-saving tactics. Unsurprisingly, banks have been quick to jump on this need by bringing out budgeting apps.

Although increased spending remains common among mobile bankers, these apps could help to provide a remedy. Because managing finances is a priority for most people, they have been quick to take off.

So, mobile banking hasn’t just influenced how we spend — it’s changing how we save, too.

3. All-Inclusive Banking

Banking apps make it more straightforward to exchange money and make purchases, therefore they are particularly valuable for people who struggle with traditional methods of money management.

For wheelchair users, visiting a local bank or an ATM can often be inconvenient. But thanks to these apps, financial affairs can be managed from home. The need to venture into town to take out cash or pay for goods is now a thing of the past — and this is transforming lives.

Likewise, this has revolutionised how people with specific learning differences monitor their money. Features like colour-coding are ideal for users with Dyslexia, Dyspraxia and ADHD, for example.

For people who live far from the town or city, driving to an area with a hole in the wall or bank is no longer necessary as banking can be done from home. Using this kind of app could even reduce your carbon emissions.

Mobile banking isn’t just benefitting its users — it’s helping the environment.

How we spend, save and manage our money has been completely transformed by mobile banking. No wonder its set to rise in popularity over the next four years. This is an exciting time for the financial world. How will it affect your finances?

Unfortunately, by prioritising ad-hoc incident resolution, organisations struggle to identify and address recurring data quality problems in a structural manner. So what is the correct approach? Boyke Baboelal, Strategic Solutions Director of Americas at Asset Control, answers the question for Finance Monthly.

To rectify the above issue, organisations must carry out more continuous analysis, targeted at understanding their data quality and reporting on it over time. Not many are doing this and that’s a problem. After all, if firms fail to track what was done historically, they will not know how often specific data items contained completeness or accuracy issues, nor how often mistakes are made, or how frequently quick bulk validations replace more thorough analysis.

To address this, organisations need to put in place a data quality framework. Indeed, the latest regulations and guidelines increasingly require them to establish and implement this.

That means identifying what the critical data elements are, what the risks and likely errors or gaps in that data are, and what data flows and controls are in place. By using such a framework, organisations can outline a policy that establishes a clear definition of data quality and its objectives and that documents the data governance approach, including processes and procedures; responsibilities and data ownership.

The framework will also help organisations establish the dimensions of data quality: that data should be accurate, complete, timely and appropriate, for instance. For all these areas, key performance indicators (KPIs) need to be implemented to enable the organisation to measure what data quality means, while risk indicators (KRIs) need to be implemented and monitored to ensure the organisation knows where its risks are and that it has effective controls to deal with them.

A data quality framework will inevitably be focused on the operational aspects of an organisation’s data quality efforts. To take data quality up a further level though, businesses can employ a data quality intelligence approach which enables them to achieve a much broader level of insight, analysis, reporting and alerts.

This will in turn allow the organisation to capture and store historical information about data quality, including how often an item was modified and how often data was erroneously flagged. More broadly, it will enable organisations to achieve critical analysis capabilities for these exceptions and any data issues arising, in addition to analysis capabilities for testing the effectiveness of key data controls and reporting capabilities for data quality KPIs, vendor and internal data source performance, control effectiveness and SLAs.

In short, data quality intelligence effectively forms a further layer on top of the operational data quality functionality provided by the framework, which helps to visualise what it has achieved, making sure that all data controls are effective, and that the organisation is achieving its KPIs and KRIs. Rather than being an operational tool, it is effectively a business intelligence solution, providing key insight into how the organisation is performing against its key data quality goals and targets. CEOs and chief risk officers (CROs) would potentially benefit from this functionality as would compliance and operational risk departments.

While the data quality framework helps deliver the operational aspects of an organisation’s data quality efforts, data quality intelligence gives key decision-makers and other stakeholders an insight into that approach, helping them measure its success and demonstrate the organisation is compliant with its own data quality policies and relevant industry regulations.

The financial services industry is starting to focus more on data quality. In Experian’s 2018 global data management benchmark report, 74% of financial institutions surveyed said they believed that data quality issues impact customer trust and perception and 86% saw data as an integral part of forming a business strategy.

Data quality matters. As Paul Malyon, Experian Data Quality’s Data Strategy Manager, puts it: “Simply put, if you capture poor quality data you will see poor quality results. Customer service, marketing and ultimately the bottom line will suffer.”

In financial services with its significant regulatory burden, the consequences of poor data quality are even more severe. And so, it is a timely moment for the rollout of the multi-layered approach outlined above, which brings a range of benefits, helping firms demonstrate the accuracy, completeness and timeliness of their data, which in turn helps them meet relevant regulatory requirements, and assess compliance with their own data quality objectives. There has never been a better time for financial services organisations to take the plunge and start getting their data quality processes up to scratch.

Two-thirds (66%) of UK consumers do not want to use a smartwatch app to make payments or purchase goods. That’s according to new State of Finance research from experience management company, Qualtrics, which examines financial technologies and payment preferences across the UK.

The finance-focused research, which surveyed over 1,000 UK consumers, also found that 81% of those questioned say that they have never used a smartwatch to pay for items.

Although the debit card has overtaken cash as the preferred form of payment, the research found that 97% of consumers still use cash at least some of the time. Surprisingly, over a third (36%) are still paying with cheques — almost double those who use wearables.

Commenting on these findings, Luke Williams, CX strategy lead at Qualtrics, said: “While it’s great to see both retailers and financial institutions investing in new and innovative forms of payment, it appears that consumers are not yet ready to transition away from cards and cash.

“Financial institutions need to think carefully about what payment approaches work for their customers and the technologies that will meet consumer demands. There is no substitute for offering experiences that consumers want to engage with, and payments are no different. The key is not imposing technologies that you think consumers should use, but listening to customers and tailoring your approach to their individual needs.”

(Source: Qualtrics)