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Editor Scott Thompson contents Email: [email protected] features... Contributing Writers David Adams, Glynn Davis, Paul Golden, Liz Morrell, Hannah Prevett, Francis Stokes 20 The next steps
Design & Production FStech brings you 14 FS technology predictions for the year Jason Tucker ahead, taking in the likes of the mobile revolution, Bitcoin, Email: [email protected] payments and social customers
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FStech_subs_2013.indd 3 10/02/2014 10:07:15 e d i t o r ’ s c o m m e n t Just another year
With 2014 in full flow, Scott Thompson looks for reasons to be cheer- ful but it’s all a bit of a struggle
elcome, dear readers, to the first which should end immediately.” I don’t often FStech of 2014. Christmas is now but agree with politicians but the man has a point. Wa distant memory. Torrential rain is The main players have washed their hands of any sweeping the country as I write this and the responsibility here. And that just adds fuel to the optimism that comes hand in hand with a new banker bashing fire. To quote a Guardian reader year has well and truly vanished. In the banking who responded online to the ATMs story: ‘Not world, all the talk of a shiny, happy new sector being able to access your cash when you are 2014 will be more of emerging from the ashes of the financial crisis hard-up, or having to pay £1.75 every time you looks to have been misguided. 2014 will be more do, is social isolation and marginalisation. Being the same; IT glitches, of the same; IT glitches, poor customer service in that position as a result of deliberate red-lining and negative headlines etc etc. Yes, there will be by retail banks is discrimination.’ poor customer service a number of interesting technology developments RBS chief executive Ross McEwan apologised and negative headlines in 2014, particularly in the payments arena, but to those RBS, NatWest and Ulster Bank customers what will really change this year compared with who couldn’t make online and card payments on etc etc. Yes, there will 2013? Very little, I fear. A gloomy introduction, I Mega Monday. “The systems failure was know; one that was sparked by recent events and unacceptable. Monday was a busy shopping day be a number of interest- off the record conversations with senior industry and far too many of our customers were let ing technology develop- figures. First up, the year kicked off with the down, unable to make purchases and withdraw news that the Co-operative Bank is to be cash,” he said. “For decades, RBS failed to invest ments in 2014, particu- investigated by both the FCA and PRA for its £1.5 properly in its systems. We need to put our billion capital shortfall. Groan. Secondly, we were customers’ needs at the centre of all we do. It will larly in the payments only two days in to January when we got the first take time, but we are investing heavily in building arena, but what will IT failure of the year as NatWest and RBS IT systems our customers can rely on.” customers were unable to pay by card at Tesco’s All of which sounds great, but right now it’s really change this year petrol stations; those shoppers using the retailer’s just words, of little comfort to beleagured pay at pump feature found that their PINs were customers and the financially excluded being compared with 2013? not accepted. driven into the arms of Wonga et al. One of my Very little, I fear It’s not the first time RBS has been in the news contacts recently said to me: “The banks who for card-related issues. Many UK online retailers took bail out money are busy positioning were affected by an RBS IT glitch on Mega themselves as customer centric organisations, but Monday (2 December) as customers were unable wait until they get away from the government; to make payments, although the bank insisted that will all quickly change.” that this latest issue was down to a fault with Harold Wilson once quipped: “I’m an optimist, Tesco’s technology. It may well have been a but an optimist who carries a raincoat.” The problem at the retailer’s end but nonetheless the optimist in me wants my contact’s theory to be mainstream media saw fit to report it along the way off. “We need to put our customers’ needs lines of, RBS in yet another balls up. at the centre of all we do.” The banks should Also rather depressing was a report in The have been doing that all along but, hey, at least Guardian, claiming that more than 300,000 of there’s a recognition that the status quo have Britain’s poorest people live at least 1km from a been taking their customers for granted for way free-to-use cash machine and face a fee ranging too long. The optimist in me who carries a from 75p to £10 to withdraw money via an ATM. raincoat, however, looks back to the financial The Labour MP Frank Field, an adviser to the crisis and the lack of progress since then and government on tackling poverty, told the paper it thinks, the more things change, the more they Scott Thompson is Editor of FStech. was “time to take the gloves off with the stay the same. Ah well...We can but hope that His blog on all things FS tech can be found at: www.fstechnology. industry, as soft reasoning has not worked... better days are ahead and when I come to write blogspot.com. He can be contacted Getting the poor to pay for the privilege of taking my end of year review piece I do so while eating at: [email protected] out their own money is a grotesque practice, a large slice of humble pie.
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Rounding up the major FS tech-related stories from the need to know last two months
DECEMBER The organisation’s first ‘dashboard’ survey of 2,337 adults, conducted by Bank robbing ain’t what it used to covers the period from service launch YouGov, showed that 64 per cent of be...Robberies in British banks have on 16 September to the end of people online who hold a current fallen by more than 90 per cent in less December and provides detail on: account with a bank or building than two decades, the British Bankers customer awareness of the service; society would prefer to conduct their Association reports. There were 66 customer confidence in it; and service banking online or via a mobile such incidents in 2011, down from performance. The findings show that application compared to just 29 per 847 in 1992. The decline is being by December 59 per cent of the cent who prefer telephone or attributed in part to the use of general public were aware of the in-branch banking. technology, such as CCTV cameras, as offering. This was achieved with the Twenty nine per cent, meanwhile, well as screens to protect staff and help of the first phase of a national TV, had not used their bank’s call centre specialist fog to disperse criminals. radio and print advertising campaign service. Hugh Morris, Genpact’s vice Also, branches are holding less cash which kicked off at launch alongside president of Banking, FS and and time-delay safes ensure that staff many individual providers’ own Insurance, Europe, said: “This survey have access to less money. There is campaigns. A second burst of is a clear signal that the industry must closer co-operation between banks, advertising began on New Year’s Day change its approach and begin to the police, post offices and other and is scheduled to run until March. direct resources away from call centres victims to share information about Fifty eight per cent of people, and branches and towards better, armed gangs. And better training to meanwhile, are confident in how the more effective facilities for customers ensure staff are well prepared to new service works, with three- to do their own banking. It shows handle robberies. quarters of us thinking it would be unequivocally that consumers are Anthony Browne, chief executive of quick and easy to switch a current moving away from the ‘branch and the BBA, said: “Banks are working account from one bank or building telephone banking’ model and hard to confine armed robberies to society to another. During the last demanding a more ‘virtual banking’ the world of TV dramas. Being caught quarter of 2013 there were 306,240 services model.” The research up in a bank job is a terrifying ordeal switches. There were 83,729 switches suggests consumers are driving the for staff and customers that can scar in December 2013, a 54 per cent rise of the virtual bank as they demand lives for decades. It’s great to see that increase on the same month in 2012 faster banking and better interaction the number of these crimes have when there were 54,329. with their bank, a trend that is fallen sharply in recent years. Anyone predictably led by the internet trying to rob a bank now faces much JANUARY generation of 25-34 year-olds. This better CCTV, protective screens that Research published by Genpact band of technology savvy ‘Generation can rise in less than a second and even revealed a tangible shift in personal Y’ is the most likely to prefer banking special fog designed to disperse banking preferences in Britain. A online or via a mobile application (75 criminals. Banks will continue to work closely with eachother, post offices and the police to make such raids a thing of the past.”
The new current account switching service has had a decent if unspectacular first few months. Tracking research by the Payments Council shows that people in the UK are becoming increasingly aware of the service, helping to contribute to switching levels for the last quarter of 2013 rising 17 per cent year-on-year. Expansion plans: Metro Bank. news news overview
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per cent) and the least likely to prefer solutions. “The good news is that new which has not taken place to date; to visit a branch (11 per cent). Current investment spending is skyrocketing plus the start of a national and telephone and in-branch banking and that maintenance allocations are international conversation on this delivery services are viewed as being on the decline,” says Celent’s Jacob immensely important issue – again analogue processes in a digital world. Jegher. “It’s still quite challenging to something, that has to date not yet These are associated with waiting, get projects funded, however. Projects taken place.” whether in a queue or on hold, and are encouraged but highly scrutinised, Green added: “The Republicans’ seen as cumbersome and time and they come with the requirement bold stance is part of a groundswell of consuming. of a fast return on investment.” anti-FATCA feeling in Washington and beyond and, to my mind, it represents Metro Bank announced that it had Many Lloyds Banking Group customers real progress in the fightback against raised £387.5 million from private were unable to use ATMs and debit a law that has a host of serious investors and institutions to fund its cards on Sunday, 26 January. Problems unintended adverse consequences. expansion plans. It is delaying plans to with its IT servers affected debit card FATCA is hugely expensive to float on the London stock exchange transactions for the Halifax, Lloyds, implement (costs that will surely be until 2016, following strong interest Bank of Scotland and TSB brands. The passed on to the public) and highly from both private investors and chief executive of TSB, Paul Pester, ineffective. It will do little, if anything institutions. Vernon W. Hill, founder took to Twitter and replied to several at all, to tackle the serious challenge and chairman, commented: “The peeved customers personally. He said: of offshore tax evasion as it does not revolution in British banking continues, ‘My apologies to TSB customers actively target tax cheats. Instead it with strong investor support from having problems with their cards. I’m relies upon a ‘dragnet approach’ to existing and new investors, who working hard with my team now to haul in the personal financial believe in the Metro Bank growth try to fix the problems. PDP.’ information of millions of ordinary model.” It sold the common stock at In a statement, Lloyds Banking Americans – the vast majority of a share price that was 30 per cent Group commented: “We apologise whom are not suspected of owing higher than at its previous capital that earlier today, between 3pm and taxes – on the off chance they happen raising in June 2012, with the deal 6pm, some customers were unable to across some illegally hidden assets. All bringing the total amount raised by complete their debit card transactions. Americans should be concerned about the bank so far to £641 million. Although the majority of transactions FATCA because it will reduce foreign Launched in July 2010, the venture were unaffected, we are very sorry for investment in the US thereby now has more than 280,000 business the inconvenience that this will have threatening American jobs, fuel the and personal customer accounts, and caused. At the same time, some likelihood of tax hikes, increase opened its 25th store on Friday, 17 customers encountered problems at consumer costs for dealings with January in Milton Keynes. Store approximately half of our 7,000 ATMs. banks and other financial institutions, expansion across London and the This was resolved by 7.30pm, and all potentially damage important South East remains central to its of our ATMs are now working.” international trade relations, and it growth plans, with up to 12 more will (and already is) turning American pencilled in for 2014, and an The move by Republicans to champion citizens who live and/or work outside additional 500 jobs to be created. the repeal of the Foreign Account Tax the US, and American firms operating Compliance Act (FATCA) is a step in globally, into financial pariahs.” Tech spending by North American the direction of common sense. The RNC’s vote to back a FATCA banks will grow from $56.9 billion in That’s according to the boss of repeal follows Senator Rand Paul’s 2013 to $59.5 billion in 2014. one of the world’s largest independent opposition last year when he According to Celent, there is strong financial advisory organisations. Nigel introduced legislation, citing privacy growth in retail banking spending; key Green, the founder and chief concerns, to have parts of the law priorities include the monetisation of executive of deVere Group, made his scrapped. FATCA, which the Obama digital channels, enhancements to the comments in the wake of the administration intends to implement user experience, and omnichannel Republican National Committee (RNC) from 1 July, requires financial sales and service endeavours. voting Friday, 24 January to adopt a institutions to report all their American Spending on wholesale banking will resolution to repeal the US law. He clients’ financial activities directly to also continue to climb, particularly as said: “I hope that this heralds the start the US Internal Revenue Service (IRS), midsize banks look at upgrading of the critical review that FATCA or be subject to a 30 per cent aging cash and treasury management should have already been subject to, withholding tax.
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i n br i e f • LV= home insurance has FStech Awards: shortlist announced implemented Xactware’s claims- estimating solution. LV= desk Barclays, Nationwide Building Society, RBS, Lloyds Banking adjusters are using it to scope, estimate and settle property losses Group, Fiserv, BT and Misys are among the companies from the office. This has enabled it to improve claims efficiency and shortlisted for the 2014 FStech Awards deliver better service to its Bank of America Merrill Lynch (Trade Pro) customers. LV= is also using the Deutsche Bank solution in concert with members of GE Capital UK its supply chain. Investec Asset Management Nutmeg.com • Hastings Direct is rolling out UniCredit Business Integrated Solutions/Splunk Eptica’s multi-channel customer service platform. The company will Best Trading System use it to centralise knowledge and Deutsche Bank make it available across email, Biggest and best yet: 2013 FStech Awards. MahiFX telephone and web self-service he Awards will take place on Thursday, 27 Maybank Group/Misys channels. Initial implementation March at the London Lancaster Hotel. Portware commenced in December. TNow into its 14th year, the event recognises excellence and innovation in the field Best Use of IT in Insurance • BLME (Bank of London and The of information technology within the UK and Achmea Insurance/BlackLine Systems Middle East), the largest Sharia’a EMEA financial services sector. Scott Thompson, Exeter Family Friendly compliant bank in Europe, has Editor, FStech comments: “Congratulations to LV= selected ClusterSeven’s Enterprise all the shortlisted companies. Competition has Spreadsheet Management (ESM) been particularly fierce this year. Once again Best Use of Technology in software. It will utilise this to provide there are many great examples of cutting edge Customer Service control for its key business technology suppliers and financial institutions Barclays/BT spreadsheets and the data they making innovative and effective use of Barclays Bank (SmartCall) manipulate. technology in various pockets of the sector. I’m Deutsche Bank looking forward to meeting with the judges to LV= • The Gores Group has made an decide the winners and to the big night in Santander/Vizolution undisclosed investment in Natterbox, March.” TEB SME Banking Group a UK company specialising in mobile There follows a selection of categories and and voice intelligence. The venture’s shortlisted companies. For a full list, visit: www. Best Use of Online Services mobile voice recording product fstech.co.uk/awards. Bank of America Merrill Lynch offers compliance with the growing LV= global regulations in the financial Best Use of Social Media Nutmeg.com services sector. Friends Life Standard Chartered Bank (China) LMAX Exchange Swissquote Bank/Temenos • LMAX Exchange is to become the Social Advisors Unity Trust Bank first regulated MTF to list Ven, enabling brokers, institutions and Best Use of IT in Retail Banking Best Use of Mobile banks to trade the digital currency. Barclays Bank Bank of the West/Fiserv David Mercer, CEO at LMAX Co-operative Bank of Kenya/Misys Barclays (MyDevice) Exchange, says: “Ven is already used Lloyds Banking Group Barclays Bank for real goods and services but this Nationwide Building Society/IPL Deutsche Bank (Mobile Platform) is a major step forward in the Nationwide Building Society/IRESS UK Global Payments/Intuit development of virtual currencies in RBS/Monitise/Visa Europe that listing on LMAX Exchange Best Use of IT in Wholesale & Investment Societe Generale makes it a tradable currency.” Banking Thomson Reuters
PAG e 0 8 F E B R U A R Y 2 0 1 4 i n br i e f Anti-fraud/Security Strategy of the Year Wolters Kluwer Financial Services • Legal & General Network has Ally Bank Xactium chosen Intelliflo’s Intelligent Office as Barclaycard the new PoS solution for its Garanti Bank/FICO Most Innovative Product of the Year Appointed Representatives and Nationwide Building Society/SAS Adaptiva Directly Authorised members. Five of VEN/ValidSoft ACI Worldwide L&G’s partner firms have been FircoSoft involved in the development of this Outsourcing Partnership of the Year Fluency Solutions project, to ensure that the solution Credit Suisse/BT Landmark Information Group and the training required exactly fits Coller Capital/DataArt Platform Black the needs of L&G’s distributors. The National Australia Group Europe SanDisk move follows a roll-out of the National Savings & Investments/Atos SunGard Financial Systems system to their wealth sellers. Tiaa-Henderson Real Estate/Telstra Global Tarmin USS/Civica • Nine out of ten of senior financial Technology Provider of the Year executives questioned for KPMG’s Payments Innovation of the Year Cinnober Financial Technology Global Anti-Money Laundering European Payment Services Eze Castle Integration Survey said that money laundering i-movo Fixnetix issues are back at the top of the Nordea Bank/Misys MarketsPulse agenda in their organisation. And Paylib Services MphasiS 84 per cent now consider it to be a Syniverse Perforce Software major concern within their business The Currency Cloud Phoebus Software risk assessment. Ukash PROFILE Software Unity Trust Bank S&P Capital IQ Real-Time Solutions • Barclays has denied media reports Virtual Piggy Sentronex that it is set to close a quarter of its WorldPay High Street branches. A Online/Mobile Technology Provider spokesperson says: “Increasing use IT Team of the Year AirWatch of technology is changing the way Citi Arxan Technologies in which customers choose to do Deutsche Bank BlackLine Systems their banking and creates Exeter Family Friendly CurrencyFair opportunities for Barclays to offer Lloyds Banking Group Distribution Technology services in new ways, LV= CIO department MarketInvoice complementing the branch network. National Australia Group Europe Monitise Whilst it is inevitable that there will Quintessential Finance Group be speculation about how these Cloud Computing Innovation Seven Investment Management changes will impact on the branch of the Year Truphone network, this will be driven by the Bank of America needs of our customers and, BFA Bank/Diasoft Most Disruptive Financial therefore, there is not a target for a BlackLine Systems Sector Technology number of branches to be closed, Mambu Acquis Exhange nor a timeframe for such action.” Workshare BATS Chi-X Europe Citicom Solutions (UK) • Lloyds Bank has joined Tradition’s Risk Management Software of the Year Mambu Trad-X, a platform for the trading of Aon Benfield miiCard global interest rates swaps, as a Acclimatise NetPay founder participant. Daniel Marcus, Fiserv smartTrade Technologies CEO of Trad-X, comments: “As one OpenGamma Tradable of the leading GBP banks, Lloyds will Quantifi TransferGo add further quality liquidity, as well SIX Swiss Exchange Vizolution as product expertise and input in the TeleWare Zapp development of our nascent GBP TM Group ZNAP hybrid platform.”
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• 2014 will not be the year that NFC takes off and neither will 2015, Big year ahead for Zapp according to Ovum. A growing number of alternative enabling HSBC, first direct, Nationwide, Santander and Metro Bank technologies are readily available, and at lower cost to merchants and are to offer Zapp mobile payments to 18 million customers consumers. There is a chance that hosted card emulation (HCE) could across the UK help the case for NFC as it provides a BS, Lloyds and Barclays (which has already Payments service. It does not require a cloud-based model for NFC that rolled out its Pingit mobile payments standalone app, instead offering real-time makes service provisioning much offering) are notable absentees. payments on consumers’ phones through their easier for issuers, developers, and R Nonetheless, getting five banks onboard at this existing mobile banking application. Zapp says it other third parties. This has the stage is pretty good going. The aforementioned will charge a transaction fee that is a “fraction” potential to open the market to more banks line up alongside WorldPay, Optimal of the two to three per cent fee PayPal charges. innovation and competition. However, Payments, Realex and SagePay, working It works through secure digital “tokens”, which this will happen only if the card together to prepare the roll-out of Zapp mean customers don’t need to reveal any of schemes get behind HCE and security payments to customers, merchants and their financial details (including bank account concerns are addressed. businesses in 2014. Together this group details) to merchants when they are shopping. represents over a third of all UK bank accounts And because Zapp is integrated into the mobile • Alternative payments will overtake with 60 per cent of UK merchants being able to banking app it’s only the financial institutions cards for e-commerce transactions by take advantage of the service. And Zapp says it that know account details. Payments will be 2017, according to a WorldPay study. will continue to recruit new members covered by similar protections as exist today for This found that online purchases throughout the year. Peter Keenan, chief debit cards, ensuring that in the event of goods made using alternative payments will executive at Zapp, says “I am truly excited to not being delivered or an issue with the payment rise to 59 per cent in 2017 from 43 announce our lead financial institution partners: the consumer will be covered. per cent in 2012. Card payment HSBC, first direct, Nationwide, Santander and Mobile has been something of a thorn in the market share (including credit and Metro Bank. Together with our already side of the banking establishment. Dealing with debit) will decline from 57 per cent in announced acquirer partnerships, we will go to consumer adoption of mobile payments is a 2012 to 41 per cent in 2017. market with real scale offering simpler, more significant challenge for the industry, as firms E-wallets will equal cards as the most secure and efficient payments to millions of grapple with adapting their models to these popular payment method globally. In customers and businesses. I am delighted that omnichannel times. Throw in the potential 2012, $295 billion was processed these financial institutions and acquirers have invasion of their markets by new non-traditional, through e-wallet payments. This is set chosen to innovate to deliver value to their digitally savvy entrants, such as Amazon and to rise to $1,656 billion by 2017. customers, lead the market and deliver huge Google, and we could see some organisations benefit to the UK economy.” pushed to breaking point. Teaming up with the • Cumberland Building Society has Zapp has been set up by VocaLink; it bypasses likes of Zapp, then, would seem like a good fit. launched Pay2Mobile, enabling the card networks and is powered by the Faster Steve Pateman, head, UK Banking, Santander, internet banking customers to send says: “Our customers want the choice to be money to a friend or relative’s able to pay on the go using mobile technology, Cumberland current account using and the Zapp proposition is second to none their mobile phone number, without with its capabilities.” Tony Prestedge, needing to share account details. Nationwide’s chief operating officer, comments: Customers download an app, “By using Zapp, consumers will be able to make available on iOS and Android, and to quick and secure payments directly from their receive money they register their existing mobile banking app. This announcement mobile phone number to their follows our launch of V.me by Visa and the preferred Cumberland current deployment of a suite of best rated mobile account via internet banking. The app banking and mortgage apps, showing our also includes a feature called Balance commitment to delivering innovative payments Peek which allows customers to and online services. We will continue to invest in check balances without having to log Onboard with Zapp: HSBC. new technologies that will make our customers’ on to mobile banking.
p a G e 1 0 F E BRU A R Y 2 0 1 4 p a y m e n t s n e w s
s o u n d b i t e s Choice quotes from this issue of FStech lives easier and give them more control of their and banks to bypass the existing payment money.” schemes. “For merchants this poses potentially “2014 will be more of the same; IT great benefits in terms of reduced interchange glitches, poor customer service and Industry reaction fees and substantially faster if not immediate negative headlines fuelling the The venture will go head to head with a number payment settlement. For consumers on the nation’s favourite past time, banker of other mobile payments offerings including other hand, the benefit for electronic and bashing. Yes, there will be a number big hitters such as PayPal and Weve’s (the joint mobile commerce remains significant as it of interesting technology venture between Vodafone, O2 and EE) much effectively provides a simplified payment developments in 2014, particularly in hyped upcoming mobile wallet service; unlike mechanism without the need to create a new the payments sector, but what will many of its competitors it has not rushed to and separate wallet distinct from their existing really change this year compared with market which could well prove to be a strength. bank accounts, and avoids the need for fiddly 2013? Very little, I fear.” p. 5 While the competition is great, so are the and unnecessary virtual prepaid wallets separate potential rewards. Twenty million adults will use from other accounts,” he says. “In-store their mobiles to pay for goods and services by payments may take longer to get off the ground “People thought Big Data would take the end of the decade, with the value of as merchants and consumers alike adapt to a off. There has been a lot of hype but purchases tripling from current levels to £14.2 device based system whereby the merchant Big Data has already moved to the billion in 2018, according to a report published essentially authenticates itself to the consumer. trough of disillusionment phase. The late last year by the Centre for Economic and However with VocaLink reportedly opening up feedback from banks is that they Business Research (Cebr). The study, its API to developers, there remains strong don’t want to hear another Big Data commissioned by Zapp, notes that the figure is potential for Zapp to innovate and develop in story. Use cases are low and often less even higher when all mobile transactions are ways that may gain greater consumer traction.” dramatic versus other issues whch are included (such as bank to bank transfers) at He adds, though, that critical to the long- more pressing. It will come, but it £18.1 billion (citing VocaLink data). By 2020, it term success of Zapp will be the user experience won’t be as big as everyone will represent 1.4 per cent of total consumer and gaining consumer awareness of the predicted.” pp. 38 - 39 spending. platform. “The involvement of participating Mobile has been the next big thing for a banks will go some way in helping this, however number of years; thus far it’s been a case of all as the recent roll-out of contactless showed, this “I think we’re very lucky to be hype, very little substance. But Stuart Gregory, may nonetheless be a longtail growth pattern working in such a fast moving and VP eWallet at digital payments outfit Skrill says rather than an overnight revolution. Alongside innovative industry. My only grumble that the emergence of Zapp is yet another sign this with more countries and regions developing is that it can be easy for business of the growing demand from consumers for faster payments like infrastructure, if Zapp leaders to overlook the importance of digital wallets. “Widespread familiarity of, and proves successful in the long-term could prove technology, and I think IT teams confidence in, online banking and e-commerce to be a model for other markets. Visa and commonly find this within their along with the near ubiquity of mobile devices MasterCard will likely be watching developments organisations. Technology’s often not is driving through change. We all want faster closely.” seen as a vital tool until something and easier ways to pay and mobile and digital goes wrong with it.” p. 18 wallets are the natural extension to our Zapp in action... increasingly cashless lives. It is also encouraging Online shopping that the firm behind the tech – VocaLink – is A pass code is generated during online checkout UK-based, and the support the five banks are and the customer inputs the code into their “If history is a reliable guide, PR giving them is a massive endorsement for British mobile banking app to make the payment. agencies will get rich out of it (new business and technology. We welcome Vocalink retail banking entrants) as companies to the market, as a fellow London-headquartered Paying a bill trumpet their new ideas, but will organisation and see this announcement as The customer opens the mobile banking app, consumers trust an organisation further evidence that European companies are then scans a QR code at the bottom of the bill they’ve never heard of with their leading the way in new and innovative new to make the payment. money? You may have a visionary, like digital payment methods.” Anthony Thomson or Richard Branson, Gilles Ubaghs, senior analyst, financial Paying a retailer but as many have found in UK FS services technology, Ovum, gives a thumbs up After opening the mobile banking app, the before, actually bringing services to to the fact that Zapp builds on Vocalink’s Faster customer scans a QR code or taps a contactless market is very hard.” pp. 30 - 31 Payments infrastructure and enables merchants reader to make the payment.
F E BRU A R Y 2 0 1 4 p a G e 1 1 advertorial
Contract management - peace of mind for the financial services industry at your fingertips
Howard Frear, Director of Sales and Marketing, EASYSoftware, says the days of trying to remember contract deadlines, terminations and extensions are over
he Global Banking Crisis of 2007-2010 was the biggest twenty revisions with each version being saved, until in the end, crisis to the world’s financial system since the Great nobody is 100% sure which is the final, correct version. When TDepression of the 1930s and the global nature of the crisis amendments are made via emails going back and forwards led to subsequent attempts to harmonise regulatory regimes between a dozen people, the confusion can be even worse. globally in order to improve standards at multinational financial institutions. Regulatory compliance alone is one of the biggest Reputation reasons for automated contract management software proving to Another factor to consider is that when you’re running a business be such a boon to financial institutions looking to improve visibility where your reputation depends on having a professional image, and control of the data that they hold. Incidentally, when we talk then out-of-date contracts or missed renewal or expiration about ‘contracts’, we could be talking about mortgages, loans, deadlines can give entirely the wrong impression to potential agreements, terms and conditions, leases or insurance policies. All customers and the wider world. For example, when despite six these documents should be viewed as dynamic, evolving entities, reminders, famous toyshop Hamleys’ online store domain expired but they are often filed away as paper copies and then forgotten just before the Christmas 2009 shopping season, the company until something goes wrong or they expire. This information is faced embarrassment and ridicule. Risk assessment may be driven fragmented and inaccessible and without ongoing supervision externally by regulatory compliance, but internally it is driven by and/or intervention, all kinds of problems can ensue: documents management fear of fines and compensation claims. Protecting get lost or destroyed, potential savings or revenue streams are your brand, means keeping a weather eye out for potential ignored and critical review dates can pass unnoticed. But hiring, banana skins and anticipating crises before they even begin. There training and retaining staff to manage and support these contracts is a growing recognition that the way in which contracts are is expensive and staff leaving can chip away at expertise and best managed throughout their lifecycle can impact quite significantly practice. on revenue and cash flow for all concerned. And this is where specialist software comes in, because it can help automate certain Lost processes while keeping everyone informed of updates and Many institutions will admit in private to having no idea where a deadlines. particular contract is located, let alone being able to access a specific term or clause in it without a time consuming manual Take Up search. This in turn, means they cannot analyse their contracts by The Aberdeen Group published research in 2007 which showed vendor, customer, product, or service line or be able to take that, on average, 68% of a company's revenue comes through advantage of negotiating leverage or optimising contract formalised contracts but only 82% of contracts of ‘best in class’ performance. They cannot spot the interdependencies amongst organisations (that is, well-known businesses including High Street their contracts, track correspondence or their contingent liabilities. names) have electronic contract management; that leaves 18% Even if they do, they have no reliable process in place to alert the that don't and which are still dealing with pieces of paper. Drilling correct person or to respond to the triggered risk. Ownership of down further, 51% of businesses are still fully manual, as opposed contracts may be spread across several people or departments, to only 8% who are fully automated, a huge gap of 43 points and with no one ‘owning’ the whole process and key milestones a surprisingly low percentage to have taken full advantage of the falling through the cracks. Failure to comply with contract terms benefits. It looks like the business case for software has yet to be and conditions is a significant cause of loss of revenue and, over made to everyone even though short implementation times and time, can run into millions of pounds. immediate benefits mean a fast ROI. Misplaced and out-of-date paper contracts, alongside the risks and missed savings that go Workflow with them, will still be around for a while, but as the burden of In addition to compliance and risk assessment, companies are regulatory compliance increases, the risks of failure to comply will increasingly moving from a paper intensive process to an electronic surely outweigh the reticence of taking up contract management. paperless process with all the benefits that that can bring to office For more information, please visit: www.easysoftware.co.uk/ efficiencies. Workflow inefficiencies stem from not knowing what document-management-solutions/contract-management- needs to be done and by whom. Contracts may go through ten or solutions/
P A G e 1 2 F E B R U a r Y 2 0 1 4 Invoice Management has just got easier
1 Accelerated processing times EASY INVOICE 2 Enhanced data quality of Say hello to lower posted invoices invoice processing costs, 3 Better visibility to available better controlled invoice cash flow receipt-to payment times, 4 Real-time view of authorisation improved cash flow and cycles and reporting robust audit compliance 5 Revision-proof storage of electronic invoices
www.easysoftware.co.uk Tel: +44 (0)1284 727870
Untitled-3 1 10/02/2014 12:59:29 r e s t o f w o r l d n e w s
i n b r i e f
• South Africa’s Nedbank has adopted INETCO Insight. Having World firsts: news round up grown by over two million individual Saxo Bank has launched a new portal which takes its trading and small business clients over the last two years, the bank chose the platform and adds in social features solution to improve its operational radingFloor.com was revealed in beta eachother. We believe that this may radically efficiency and maintain its customer during January. It enables traders around change how investors will go about trading FX, experience levels in the face of the world to share their trades with peers CFDs, options, futures, bonds and equities in growing transaction performance T and aims to transform trading into a social the future, making trading a social experience. complexities within the ATM and experience. At the new TradingFloor.com, you can see what PoS service channels. It’s a concept which has been gaining traction the best participating traders are doing with in recent years, particularly among foreign- their own money in any asset class of your • CaixaBank is utilising Oracle exchange traders, via such sites as eToro and choice. We are deliberately only featuring real solutions for the deployment of its Tradeo. But Saxo Bank lays claim to being the traders with real accounts trading their own new Big Data infrastructure. The first major player in the financial sector to move money to ensure a social trading community of bank is pushing ahead with this in into this world. The FI’s co-founders and serious investors.” order to develop a 360-degree view co-CEOs Kim Fournais and Lars Seier Christensen The portal also features a range of content of customer activities, integrating said in a joint statement: “We want to set free for traders, such as market news and views, the data created in its various the peer-to-peer power of traders around the data, insights and trade ideas from Saxo Bank’s channels. globe by enabling them to connect online with research teams and VIP authors. A real-time experienced and like-minded investors who are trade stream will showcase current market • Wells Fargo Visa consumer credit tired of input from salespeople from traditional sentiment. ITV News correspondent Angus card holders are now able to load banks.” Walker has come onboard and will, along with their cards into the Isis mobile They added: “Having revolutionised online former Bloomberg and BBC World anchor wallet. This marks the first phase of trading as a first mover in 1998, we now want Owen Thomas, front an on-demand TV channel, an agreement between the US FS to democratise access to trading and fund reporting from the FI’s trading floor. outfit and Isis, the mobile commerce management by JV created by AT&T Mobility, opening up the T-Mobile USA and Verizon Wireless. otherwise closed world of trading. We • Swedbank has pulled the plug on are now enabling its mobile payment solution Bart just investors to share their six months after launch. In June last trades openly, interact year, Swedbank announced that with each other, post Bart, which involves QR codes comments and photographed by cameras mounted strategies, discuss next to cash registers, was in ideas, follow and copy Claiming a social first: Saxo Bank. Axfood grocery stores. But it has failed to attract enough users and retailers, leading the bank to cut its losses and concentrate instead on Swish, the service it has teamed Most read at fstech.co.uk with other FIs on. Most clicked stories at www.fstech.co.uk during January... • Turkish banking group, Türkiye Finans Katılım Bankası, has deployed Wells Fargo pilots Isis mobile wallet Opengear’s Remote Management ‘Game changer’ SMC4 unveiled Gateways at its branch office sites. LBG apologises for IT glitch It also has plans to roll-out North American banks step up IT spending Opengear technology to a further Spotlight on FinTech innovation 145 sites including several Brits flock to deal/incentive/review sites datacentre locations.
P A G e 1 4 f e B R UA R Y 2 0 1 4 a d v er t o rial Social business means business
f any organisation in the Western groups to collaborate and communicate effectively and safely. world claims to not be a social However, internal collaboration channels – such as instant Icompany, they are wrong. Why? messaging, group chat, enterprise social networks and more – are Because whether or not they like it also subject to regulatory requirements and need to be deployed – and whether or not they are in a safe and compliant way. aware of it – their brand and their “There are ways to mitigate the risks involved in deploying products are already featured these communications platforms, in order to enjoy benefits such across a multitude of networks. as improved productivity, remote working and quicker issue Regardless of what your social resolution”, says David Oates. “Compliance issues should never media policy says, people are using be the reason for any organisation to shy away from unified public forums to discuss and communications, social media or social collaboration.” debate the value of your service. By having a solution in place which manages the access and David Oates is VP of International at Actiance, provider of the usage of applications, an organisation can provide granular leading information governance and compliance platform. “We control of how and when groups and individuals interact with often see examples of how customers with a negative experience each other. Content can be monitored as groups engage with find their voice on social media”, he says. “And when they are each other on various platforms – both internally and externally. compensated and treated with due respect and care, they can “One of the main issues we help our customers with is the turn into huge brand advocates. Customers often recognise that ability to wrap context around data,” says David Oates. “The anyone can make an error, even large corporations. When they social media, collaboration and unified communications systems then receive an apology and are compensated for that error, it generate an awful lot of unstructured data. So when you’re reinforces their decision to do business with them in the first facing litigation and need to provide these records, public or place and they can even develop a stronger loyalty bond than internal, you’re up against a very lengthy and painful discovery they initially had.” process. And with that discovery comes the challenge of piecing In the financial services industry, many organisations are together conversations – and trying to determine in what waking up to the fact that social media is the preferred medium situation and with what purpose comments were made.” of communication for a large slice of their audience. By engaging In that light, context becomes something which can be of on these channels, they can now not only gain a great deal of immense value. According to the Association for Information and intelligence around buyer behaviour, they can also become a Image Management (AIIM), it costs on average £0.13 per day to more “human” brand with a personal touch. buy 1 Gb of storage – while it costs in the region of £2200 to There is, however, inherent risk in all communication. And for review the same amount of data. This is before you add regulated industries, the risk can seem too great. What happens processing and collection costs. So the idea of being able to if things go wrong, what if the wrong kind of information leaks simplify and speed up the process can quickly equate to pounds out? How can organisations protect their brand on social media? and pence. “One truth, which we find ourselves re-iterating again and “This makes financial sense for organisations of all shapes and again,” says David Oates, “is that the biggest risk when it comes sizes,” David explains. “We currently provide compliance to communication across social channels is to do nothing. An platforms to ten of the top ten US banks and eight of the top ten organisation can no longer afford to stand back and choose to European banks. Catering for organisations with the most not take part in the conversations that are happening around stringent regulatory requirements gives us a tremendous amount them.”Recent years have seen an erosion of brand trust for many of confidence in the marketplace. We want to make social banks. As a result, financial organisations need to be more aware business happen, in a safe and compliant way.” than ever of how their reputation can be affected by getting The Actiance platform covers a vast range of applications communications wrong. within unified communications, enterprise social software and And it’s not just social media channels that play a part in an social media through a single interface. The platform has a huge organisation’s ability to provide a consistent and reliable customer footprint in regulated industries worldwide and integrates with all engagement platform. Equally important is the ability for internal the main archiving systems, leveraging existing infrastructures.
FEBRUARY 2014 PAGE 1 5 l e t t e r s
Plastic fantastic? be a key month for European politics, with elections to Come the launch of plastic £5 notes in 2016, there the European Parliament due to take place. The full will be challenges for banks and users of cash impact may not be felt this year, but the vote has the machines in making sure that these devices are potential to significantly influence the priorities for adapted for the new substrate and new designs. further regulatory change over the next few years. Ensuring that the new notes are correctly recognised Looking outside Europe, more countries around the will be critical, and finding the right technology world can be expected to be working on suppliers will be crucial for banks in reconciling that implementing the Basel III principles, following the issue, but equally there is presumably going to be a EU’s lead with its CRD IV package of reforms in 2013. phase of dual circulation where polymer and paper At the same time, preparations will be taking place in notes of the same denominations will circulate. Whilst response to the Basel Committee for Banking to every man and woman on the street this doesn’t Standards (BCBS) recommendations for managing cause any major problems, the unseen parts of the intraday liquidity risks. Meeting the new requirements cash cycle will have to adapt processes to ensure that is likely to be challenging, but will have an upside in the old notes are retired and the new notes the form of enhanced liquidity management re-circulated. Having enough capacity and flexibility information and control. Elsewhere, watch out for within the cash cycle and systems that banks, security further evidence of two key 2013 trends (the companies and other major users of cash have will be introduction of near-real time retail payment systems key to the continuation of smooth cash flow – but will and the adoption of XML ISO 20022 as the standard go largely unnoticed by the general public. for payment system messaging) continuing to gather Whether the currency is paper-based or polymer- pace across the globe. based, the on-going challenges for banks are But returning to Europe, SEPA migration will remain essentially the same: counting, authenticating and the most pressing payments issue in the near term. For quality sorting to make sure that the notes we use day those corporates who are ready to take full advantage, in and day out are fit for purpose. These operations 2014 will mark the year they can look to benefit from happen largely out of sight of the public but ensure the greater standardisation and centralisation on offer, that cash is available around the clock in ATMs and via particularly in sectors such as utilities and bank branches. If this were to stop or in some way be telecommunications that need to collect direct debits less effective, the man on the street would certainly from huge numbers of clients. notice. The arrival of polymer substrate is another Simon Newstead, head of market engagement, RBS milestone on the journey for cash – there will be Business Services plenty more to come. Ben Thorpe, director of global marketing & strategy, Glory Global Solutions In the next issue of FStech…
2014: Regulation and elections may reshape payments landscape Cloud computing supplement Existing regulatory reforms and new legislative initiatives are set to have a profound effect on the · Virtualisation payments industry over the next 12 months. Political · Security events may also leave their mark. In Europe, · Future of cloud computing corporates need to rapidly finalise their preparations for migration to the Single Euro Payments Area (SEPA), Other features even noting the recent proposal to allow a six month grace period until 1 October, which may come as · 2014 FStech Awards review welcome news to those companies that have been · Future of FS technology struggling to meet the 1 February deadline. At the · Big Data same time, negotiations will be continuing to determine the final shape of the Payment Services Directive 2 and the draft Regulation on cards For further information, email the Editor at: interchange – together making up the strategically [email protected] important “Payments Package.” Meanwhile, May will
Letters to the Editor should be emailed to: [email protected] letters letters to the editor
PAG e 1 6 F E B R UA R Y 2 0 1 4 d i a r y
Coming up
26-27 February: Customer Analytics & Insights in Retail 06 November: FStech/Retail Systems Payments Financial Services Conference Location: London Location: London Website: www.customer-analytics-in-finance.com Website: www.fstech.co.uk/payments
26-27 February: Cloud Expo Europe 20 November: FStech/Retail Systems Payments Awards Location: London Location: London Website: www.cloudexpoeurope.com Website: www.payments-awards.com/awards
04-05 March: Connected Business Expo FStech roundtables Location: London FStech hosts exclusive roundtables throughout the year, which Website: www.connected-business.co.uk are free to attend for financial IT professionals. Recent topics 27 March: 2014 FStech Awards under discussion have included cloud computing, social business, retail banking and IT security. Location: London Website: www.fstech.co.uk/awards For further information on our forthcoming roundtable events, 08-09 April: TradeTech contact Rebecca Reeves at: [email protected]. Or on: 020 7562 2417. For sponsorship enquiries, contact Sonia Patel: Location: Paris [email protected]. 020 7562 2430. Website: www.wbresearch.com/tradetecheurope
08-10 April: IFINTEC Location: Istanbul Website: www.ifintec.com
29 April - 01 May: Infosecurity Europe Location: London Website: www.infosec.co.uk
29 September - 02 October: Sibos 2014 Location: Boston Website: www.sibos.com
08-09 October: IP Expo Got an event to publicise? Send the details to Scott Location: London Thompson, Editor, FStech at: [email protected] Website: www.ipexpo.co.uk FurtherFS information ontech industry events at www.fstech.co.uk/events Now available: FS Free FStech iPhone app tech Featuring
The latest financial technology news; FStech features looking in depth at key issues; Whitepapers on new and emerging technologies
Just search for ‘FStech’ in the app store q & a
updates spendable cash and provides real-time information to show how Talking heads much money you have in your accounts. How many of us wish we’d Mick Bradley, MD EMEA, Violin Memory had that when we were younger?
FStech: How did you get into the sector? FStech: Which IT professional do Mick Bradley: My strongest subjects at school were engineering you most admire? and mathematics, so it was no surprise when I started my career MB: For me, it has to be inventor of in mechanical engineering, where I worked my way up from a the web, Tim Berners-Lee. His vision has changed the way the mechanical engineer to senior management. I was introduced to world works – I think for the better. Even though the internet is IT when I was presented with a dumb terminal, keyboard and relatively new, we already take for granted the impact it’s made asked to feed it with information. Being an engineer, I soon on our lives; it’s accelerated the rate of business, and it is ‘normal’ asked for data reports and was told they would be done in 18 to work with people wherever they are in the world. Socially, it’s months! I went out that same day, purchased a computer and so much easier to keep in touch with friends and family. And the taught myself to program and the rest is history. My interest in Internet of Things, the next generation of internet technology, tech has driven me to a host of different jobs in very different looks set to change things even further. Add to that the internet’s organisations – from very small start-ups to large enterprises. My potential to improve life for people in developing nations through core passion is still building things and solving problems. That’s faster, more reliable communications, and better access to one of the things I love about the technology sector: there are so education and business opportunities. I can’t think of a single IT many opportunities to try so many different things. But change is professional that has made more of a positive contribution. the only constant. To succeed you need to be adaptable, keep focused on the problems you are solving for your customers and FStech: Is there anything that you dislike or that frustrates build, shape and manage your team to achieve this. you about the sector? MB: I think we’re very lucky to be working in such a fast moving FStech: The biggest influence on your career? and innovative industry. My only grumble is that it can be easy for MB: I would have to say this is actually two people. When I business leaders to overlook the importance of technology, and I started my engineering apprenticeship my father gave me some think IT teams commonly find this within their organisations. advice that I’ve lived by ever since. Spend more time listening Technology’s often not seen as a vital tool until something goes than talking – the people talking to you have a lot more wrong with it. But, used properly, the right kit can bring huge experience and knowledge, so listen, learn and then make benefits that go beyond faster email. It can help organisations decisions. While this is very basic advice, it’s probably the most plan ahead, get real-time insights into their performance and valuable lesson I’ve learned. My first big challenge as an IT speed up business. It’s up to us as the techies to make sure director was to consolidate seven datacentres into one. To say I everyone sees how technology can make a difference. was keen was an understatement, and the advice my manager and mentor gave me at the time has proved to be the second FStech: What technology can’t you live without? most valuable lesson in my career. He simply told me to keep MB: The technology behind Sky+. I travel a lot and it’s great to looking over my shoulder to make sure my team was still with be able to record anything I’m likely to miss while I’m away. I love me. Since that day I have been very focused on building and that I can do it all from my phone now too. empowering teams to work to a common set of goals and to make sure that everyone has a stake in those goals. FStech: What was your last banking experience both online and on the High Street and were they positive experiences? FStech: Who in the sector inspires you and why? MB: Over Christmas I couldn’t have survived without online MB: There are some really great start-ups out there doing banking. What did we do without it? I love that I can check my fantastic things that bigger companies just couldn’t do. And FS account and transfer money without having to go into a branch tech start-ups are really forging ahead. Some of my current or pick up the phone. Having said that, I also use my branch to favourites are FinTech startup GoCardless. It makes it really easy pay in cheques. When I see I have a cheque to pay in my heart for small businesses to take direct debit payments. All of a sinks and the cheque is likely to sit in my wallet for a good while sudden SMEs are working in the same way as the big guys, before I finally make it to the High Street. When I do, as long as putting them on a more equal footing. Level Money, a personal I time it right and the queues aren’t too long, it’s actually fine. My finance service, is set to make it easier to budget on the go from kids also like the fact that I can transfer money to them instantly, your phone. Aimed at younger users, the app automatically and by instantly I mean from my phone while they’re waiting!
PAGE 1 8 F E B R U A R Y 2 0 1 4 appointments
People on the move
Annette Court Phill Jeffrey
Ex-CEO of RBS Insurance and Europe General Insurance for Fidessa group has announced two new sales appointments for Zurich Financial Services, Annette Court, has joined Workshare its sell-side business. Emily Thomas will become global head of as a non-executive director. She will be providing strategic new business sales based in New York, and Phill Jeffrey Asia direction in order to support the growth of the business Pacific regional sales director based in Hong Kong. Thomas has globally. Workshare is a provider of secure enterprise worked for Reuters and Arthur Andersen, while Jeffrey joins collaboration and communication applications. from Greenline Financial Technologies.
Emma Napier Terence Chabe
True Potential Investments has announced the appointment of Formerly of Thomson Reuters, Terence Chabe has joined the Emma Napier as head of distribution. She will lead the new business and sales department at Sentronex, a provider of company’s business development team, driving forward growth outsourced IT solutions to FIs. “I am excited to join such a plans for the firm’s wealth platform business. Napier has young, vibrant company. I have known CEO Joe Sluys for a worked in the IFA community for over 20 years. Her most number of years. It was his entrepreneurial forward thinking recent role was as head of adviser relations at The Platforum. and drive that encouraged me to join the company,” he says.
Matteo Cassina David Child
Saxo Bank has appointed Matteo Cassina in a newly created David Child has been appointed as non-executive director by position of global head of institutional business. He will be tech services supplier Intelliflo. With over 25 years of experience based at the online trading and investment specialist’s Canary in the FS industry, he started his career at The Bank of England, Wharf office. The appointment is part of Saxo Bank’s strategy before moving to DBS Management (latterly Misys Financial to continue its growth within the institutional space (this also Services). In 2003 Child joined The Exchange as MD and took involves placing its core institutional activities in London). the company through its acquisition by Vertex.
Joe Garner John Barker
Joe Garner is to be the new CEO of Openreach, which is BCS, a trader of equities and FX on the Russian exchange, has responsible for BT’s local access network in the UK. He brings appointed John Barker as executive chairman. He brings more substantial commercial, operational and regulatory experience, than 20 years of management experience in the financial having worked at HSBC, Dixons and Procter & Gamble. His market to the firm and was formerly the managing director and most recent role was at HSBC where, as head of the UK bank, head of international at Liquidnet Europe. He has also held he was responsible for launching M&S Bank. various senior positions at Instinet Global Services.
F E BRU A R Y 2 0 1 4 p a G e 1 9 2 0 1 4 o u t l o o k
The next steps
customers to fourth and fifth year service agreements are finally FStech brings you 14 FS technology going away and some of the old school vendors who rely on this predictions for the year ahead, taking in to fuel three year life cycles are being found out.” Gavin the likes of the mobile revolution, Bitcoin, McLaughlin, solutions development director, international, X-IO payments and social customers More intelligent use of cloud computing oorways to digital transformation “In 2014, to get more from the cloud, businesses will start to “Digital and mobile have proven to be pervasive trends move away from working within one rigid cloud model. Instead Dthat have deeply rooted themselves in how businesses look at customer experience and business processes. For retail banks, these trends are not only about investing in and using new technology or how they will support it. It is about looking at how the bank can do more with less to provide the best customer experience and leveraging digital transformation as a means to accomplish just that. Going forward banks will need to look at how “digital doorways”, such as contact centres, web, social media, branches and mobile, can enable them to deliver an enhanced and differentiated customer experience. For example, banks have access to large amounts of data especially from branches and contact centres linked directly to their customers’ behaviour, channel interactions and product selections. By investing in analytics banks can use the data to: develop more targeted products and services, enhance flows of digitised documents, improve web designs and service processes. With customer and operational analytics, a myriad of opportunities exist for both enhancing customer experiences and capturing efficiency gains. For example, typical outputs can result in: improved product offerings, more relevant leads, optimised web design and better service, increased and improved self-service, optimal use of agents for value-added selling activities, and many more. Heading into 2014, banks will need to look at how they can best leverage the right mix of digital doorways to transform their current capabilities into truly differentiating digital customer experiences.” Pierre Yves Glever, channels global practice head, Capgemini Financial Services
Stand up and be counted “2014 will be the year that businesses stand up to the storage industry and demand fairness from storage vendors. There are a lot of common misconceptions in the industry, ranging from the statement that ‘hardware only last three years’ and ‘it’s normal for a system to slow down once capacity fills up’. Businesses need to stop being made to replace their storage every three years. There are solutions out there that are built to last. The right storage vendor can provide zero touch storage that last for five years and can be filled to 100 per cent. The days of holding
PAGE 2 0 F E B R U A R Y 2 0 1 4 of outsourcing to just one CSP and buying an off-the-shelf be far and few in between. We will also see a shift towards package, businesses will expect to be able to work with a CSP continuous improvement of systems, where applications are that knows them inside-out. This CSP will work as an integrator improved all the time, rather than in big upgrade projects. IT to source, establish and manage the most relevant third party functions have two cultures at the moment – the “run” people, deals for a flexible and tailored solution. Working with the right who have to keep the lights on and resist any kind of change to CSP will allow businesses the chance to get more than just the avoid risk and the “build” people, often in business lead projects basics from the cloud in 2014, taking each business objective as or consultants, who like to look at the art of the possible. The a starting point and using cloud computing to meet that “build” people often engage the “run” people only when they objective. So whether it’s accommodating a mobile workforce want to throw what they’ve built over the wall into Business as with Desktop as a Service (DaaS), or provisioning for overseas Usual (BAU) support. Going forward, CIOs need to bring the BAU expansion with Infrastructure as a Service (IaaS), businesses will team in when they are designing new solutions or upgrades, to be utilising cloud computing more intelligently in 2014.” Kevin help design the eventual service they will support. This is standard Linsell, head of service development, Adapt ITIL best practice but often not done. In a world where the development cycles and gaps between development efforts are Improving customer service while reducing constantly reducing (the latter to zero) CIOs need to ensure that costs these two types of people find more common ground this year.” “The big dilemma for financial institutions is to Ben Grinnell, global CIO services leader, North Highland reconcile the need for creating differentiation in experience to win customers while lowering the Leveraging the benefits of electronic channels cost of service. Often these are seen as “Advances in technology and the adoption of industry standards conflicting objectives, but they don’t have to have accelerated the value of electronic bank channels in recent be. Some of the more innovative retail banks years. We expect several related trends to continue to evolve in have put a lot of time into using technology to 2014. In short, electronic bank channels are all about improving make customer interactions easy, relevant, the flow of information between banks and corporates to drive transparent and cost-effective. They are doing operating efficiencies and optimise the use of working capital. this by focusing on customer data and analytics, SEPA implementation, for example, will actually help corporates integrating the different channels a customer operating within the European Union achieve this, through a might use and also fundamentally re-engineering simplification of their account structures. Other technology business processes by looking at how technology initiatives such as eBAM – electronic bank account management can not only improve the customer experience, – will also make it easier for corporates to manage their multiple but also reduce the cost of business.” Rahul accounts around the world. Singh, president, business services, HCL One of the aims of all these industry standards, as well as the Technologies networks across which banks and corporates interact, is to improve straight-through processing (STP) for corporate IT feels the need for speed transactions by automatically reconciling a company’s back-office “At home if you need a new app, you can just systems with its own bank accounts. We foresee more corporates visit the Apple store and buy one for a few adopting these multi-bank messaging technologies that leverage pounds, which works seamlessly with all your these standards over SWIFT and other purpose-built networks this other apps. Excuses will dry up in 2014 for why year. The challenge for transaction banks in 2014 will be ensuring IT can’t do the same at a corporate level. IT will their technology seamlessly connects to clients, not just need to be faster, more innovative and agile in exchanging information bilaterally, but between multiple buyers, 2014, speeding up time to market for sellers and banks. In 2014, we should see banks start to adopt technology based products and services. In common technologies and standards that support a many-to- practice, this will feature a greater focus on many environment. Similarly, banks will also be looking to make systems integration for easy plug and play IT, the process around supply-chain finance far cleaner – rather than like APIs and integration architecture; rapid just pushing payments from one party to another. Transaction procurement frameworks with nimble suppliers; banks will increasingly ensure that financing and the flow of IT innovation roles with clear ROI targets; agile payments and information about goods and services being sold development and delivery methods; and an resides in one central location. Ultimately, cloud computing is an acceptance of disposable IT, where IT solutions important part of that more connected future.” Ken Deveaux, are built with shorter lifespans to meet global head of channels and distribution, RBS International immediate needs; 10 year life expectancies will Banking
FEBR U ARY 2014 PAGE 2 1 2 0 1 4 o u t l o o k
Personalisation drives innovation “This feels like an old trend, but the next step is personalisation based on rapid, confident authentication of the person in possession or in near proximity to a mobile device, automobile, point of sale terminal or even a smart TV. Our voices are unique identifiers and are totally underutilised as such. In 2014, thanks to the marketing efforts of consumer electronics manufacturers like Samsung and LG, as well as video programming distributors like Comcast and DirectTV, people are learning how they can use their voice and TV remote controls to cut-through the clutter of multi-channel offerings. In the next two years they, along with financial services companies, retailers and others will learn to add voice biometric-based speaker identification along with speech recognition to deliver a highly personalised, results oriented user interface.” Dan Miller, senior analyst & founder, Opus Research
Bitcoin will continue to gain ground (but not as a currency) “Bitcoin will continue to attract more people as a store of value and a speculative investment asset. I predict that the value of Bitcoin still has the potential to double (as of 11 December 2013 and the banks and technology providers, but also between the at 8:08 AM PT: 1 BTC = 915 USD) by the same time this year. But regulators and the technology providers – a vital third pillar of the I believe it will have a hard time becoming mainstream as a system. With that third channel of communication in place, it currency, due to its expected continued volatility amidst regulation should be much easier (and much less costly) to implement and authorities and governments figuring out what to make of the refine the business-wide IT architectures that are needed to cryptocurrency.” David Marcus, president, PayPal support and secure the compliance programmes that accompany complex and stringent industry regulations. Working with banks 2014: the year regulation gets serious and technology vendors in such a tripartite manner will do a great “If 2013 was a year of revelations in the UK banking industry – deal to help regulators to promote stability and sustainability in with most of them being ugly hangovers from the pre-crash days the global financial service industry. That’s good for banks, good – 2014 is set to be a year of sober improvement and studied for business, and good for the economy as whole, and I hope to reflection for senior figures in the industry. In the UK, the FCA’s see it become commonplace in 2014.” Said Tabet, global expert use of attestations in the final few months of 2013 have been a on financial services compliance and risk, EMC signal of determined intent. These agreements, where senior figures are asked to assume personal responsibility for their Mobile marches on business’s regulatory compliance, have raised the ugly spectre of “Mobile, mobile and more mobile. Google’s executive chairman criminal charges for senior figures should the substance of their Eric Schmidt might not have a buzzy catchphrase for it like “post attestations prove unfounded. For most, however, they have PC era,” but he is certainly onboard with late Apple co-founder merely focussed the minds of senior figures on compliance, with Steve Jobs’s line of thinking: the future is mobile, and the future regulatory rectitude, and the technology that enables it, becoming is now. ”Everyone is going to have a smartphone,” Schmidt said an ever more central concern for those in charge of overall during a segment for Bloomberg TV in which he shared some strategy. I have certainly noticed a trend whereby senior bankers predictions for the technology space in 2014. “The fact that so are thinking more in terms of risk – and that is systemic risk at an many people are connected to what is essentially a super- industry and economy-side level – rather than solely in term of computer means a whole new generation of applications around compliance: the spirit, as well as the letter of the law. entertainment, education, social life…those kinds of things.” This trend is reflected elsewhere around the world, and with “The trend has been that ‘mobile was winning,’ ” Schmidt CRD4, Basel 3 and parts of Dodd Frank, as well as the Volcker rule continued. “It’s now won.” He added that smartphones and and the Vickers recommendations all coming into force, even the tablets are already outselling traditional PCs. As an extension to most senior bankers are being compelled to consider the why the mobile march, low price will become a critical driver in global (these rules came to be in place) of industry regulations, rather consumer-electronics product creation, as emerging economies than just the how (my company can obey them at the lowest absorb a dramatically larger fraction of all devices sold. The result possible cost). Coupled with that is a real improvement in of bringing hundreds of millions out of poverty is a shift in design communications, not just between the regulators and the banks, motivation from the radically innovative, to incremental change at
PAGE 2 2 F E B R U A R Y 2 0 1 4 low cost, driven by the creation of a new purchaser segment in seen as offering third-party fraudsters rich pickings, highlighting consumer electronics. Expect the sub-$100 smartphones to the need for lenders to use as many checks as possible including dominate the phone category in the drive to connect billions trusted panels of solicitors, advisers and valuers, as well as across the globe. We are seeing cheaper models from China, maintaining vigilant electronic ID checks. However, it’s not all bad Africa and South America that will hit the market with a storm. news. Despite a significant increase in attempted fraud, The BRIC nations alone have a potential to drive over a billion investment in better fraud prevention by the UK’s financial units.” Scott Bales, former chief mobile officer, Moven services sector is paying off. Institutions are now uncovering even greater numbers of application fraud when compared to the Big year for payments sector same period last year, and we think that this can only increase as “2014 will see another busy year for the industry, with uncertainty, more organisations invest in tools and services.” Nick Mothershaw, risk and mobility being key areas. The creation of the Payment director of fraud and identity solutions, Experian Systems Regulator will be the biggest change. The regulator won’t officially start regulating until April 2015, leaving a period Building a single view of social customers of uncertainty looming over us. This is heightened by the “For years, all online identification mechanisms were not only European Commission’s legislative proposal for a revised completely separate from real identity, but were also unconnected Payments Services Directive and a regulation on Multilateral to eachother. Because of this, companies have been struggling to Interchange Fees. The retail banking sector is seeing cyber obtain a ‘single view’ of the customer for decades. Building a security become the number one risk factor. As a result of this we social identity has the potential to tie all of these details together. expect to see increased diligence in this area and a large If you can tie the data together (not just between customer investment in both detection and prevention of these threats. In service channels, but at all points your business touches a addition to that, the Current Account Switching Service is now in customer) it gives the ability to deliver completely personalised full swing which will boost customer mobility. It will become service. Consumers expect a joined up seamless interaction, especially pertinent to retail banks looking to offer improved therefore this should be a key consideration for brands going into banking experience in a bid to attract new customers. We will 2014.” Harry Rollason, community manager, Conversocial also see an increase in the mobility of payments this year as the Payment Council’s new mobile payment service comes into effect ATMs will offer increasingly cardless services, driven by in spring. In summary, 2014 is shaping up to be another big year mobile wallets, P2P apps and a growing number of for the industry with some exciting times ahead.” Chris Dunne, interesting use cases payment services director, VocaLink “Ukash is challenging the perception that only those consumers who are ‘banked’ can access cardless services at ATMs. Initiatives Rising fraudulent applications in 2014 such as our Cash Withdrawals service provide customers with a “Irrespective of the messages from Whitehall highlighting our unique code which can then be redeemed at a cash machine. improving economy, fraud continues apace and this trend looks And we’re seeing an increasing number of use cases whether it’s set to continue into 2014. Many communities – particularly the for P2P payments, corporate disbursements, refunds, prizes, inner cities – continue to face on-going challenges such as gambling account payouts or emergency cash. To date, without financial stress, a challenging employment market, rising costs any marketing, more than 1,000 newly verified customers and pressure on disposable income. As a result, the temptation have used the Cash Withdrawals service at Bank to attempt fraud will remain intact. Perhaps surprisingly, the Machine ATMs in the UK. This has given us a motivation to commit fraud is identified as prevalent among clear indication that cardless cash wealthier income groups as their reliance on maintaining a withdrawal is a service in which perceived lifestyle continues to be funded by on-going access to consumers have confidence.” credit cards, current account overdrafts and short-term loan David Hunter, CEO, Ukash facilities. In 2013 fraudulent applications for credit cards saw the largest rise. We believe that there’s every possibility that this trend will stick in 2014. Current accounts will also continue to be targeted by fraudsters, particularly following the launch of seven-day account switching and the arrival of new entrants to the market. Elsewhere, despite instances of mortgage fraud falling, the sector still sees the highest rate of fraudulent applications across all financial services products. Mortgages will always be
FEBR U ARY 2014 PAGE 2 3 b i o m e t r i c b a n k i n g
A good fit?
Glynn Davis takes a look at the drivers for the adoption of biometrics in the banking sector
ravel through an airport and you will see facial recognition Where biometrics has been implemented there have been in widespread use and in some countries fingerprinting is obvious drivers, often specific to that particular market. In Japan, Talso being used to recognise individuals. But within the for instance, an increase in fraud and the liability shifting from the financial services industry the use of biometric technology is used customer to the bank prompted the deployment of biometrics only sparingly despite being around for many years. UK firms like onto 80,000 of the country’s 180,000 ATMs. To tempt customers Nationwide were doing experiments some 20 years ago with to use this more secure technology the banks enabled them to fingerprinting but they came to very little, mainly as a result of the withdraw larger amounts. Anthony Duffy, director of retail high costs of this extra security when compared with existing banking at Fujitsu, agrees that customers need to see the benefits solutions such as chip and PIN. of using biometrics and suggests Japanese banks also worked at Peter Jones, business manager for security solutions EMEA at convincing people that there was some cache in using biometrics Hitachi, suggests the challenge is to show that the technology is and also greater speed of transactions. being used in a constructive way to improve customers’ lives. Fujitsu has worked with Bank of Tokyo Mitsubishi and Ogaki “Security alone is not a sufficient driver for the adoption of Kyoritsu Bank as well as Brazil’s second largest bank Bradesco, biometrics,” he says, especially in those countries where chip and which has introduced the Palm Secure biometric solution into PIN technology has been regarded as enough of a deterrent to many of its ATMs at its branches and as standalone units in criminals. shopping malls. “The extra security has helped them to provide
P a g e 2 4 F e b r U a r Y 2 0 1 4 more services on its ATMs and (effectively) operate them as part “The previous model of PINs and passwords is breaking down as of its branch network,” says Duffy. we often use the same for all log-ins and (smart) technology is Other concentrations of adoption are in Central and Eastern moving towards ubiquity.” Europe such as Poland and Turkey where the driver has been Possibly playing a major role in this is Apple with its iPhone 5s financial inclusion, according to Jones: “We’ve worked with that uses fingerprint recognition to access the device. “Apple smaller banks and they’ve seen it as a driver to target the will open the door and the banks, Visa and MasterCard will un-banked. It’s seen as a tool for inclusion.” then see that customers are using this technology,” he says, In 2010 PBS Bank in Poland pioneered biometric technology adding that should the US firm open up its API (Application on some of its ATMs that enabled benefits claimants to collect Programming Interface) to third-party app developers then their money by simply keying in an ID number and placing biometrics will be much more widely used and will inevitably their finger on the reader. It was a similar story in Turkey with enter the mainstream. Isbank, which deployed the same technology onto 3,000 ATMs This all adds up to a positive future, according to McEvoy: and in branches. “We’ve done biometric work in the dim and distant past and we The common element to these implementations is the use of a were sceptical about it but not now. In two or three years time it central database that holds the individual’s biometric record, will be used a lot more. And in five years’ time there will be full which Jones says is important because the objective has been to roll-outs.” create a card-less experience for these un-banked customers. Goldhill reckons in countries like the UK, where deployment of It has been different in Japan where Duffy says the model has biometrics to ATMs would be very costly, it seems sensible that it typically involved customers having a high-end chip card that will more likely be initially introduced onto mobile devices. “As holds their biometric details – this must match their actual finger individuals we buy our own phones so deployment is a lot more vein or palm vein when presented to the ATMs reader. Taking this practicable,” he suggests. However, he does not expect it to route is partly down to the regulators disliking the banks holding happen overnight, particularly in the UK: “The High Street separate data on their customers. banks have had conversations about biometrics but we’ve Both Fujitsu and Hitachi agree that the most secure forms of not even seen the pilots yet. It’s all quiet here, possibly because biometrics use vein recognition – with the former’s solution, palm it is only one of many things that the banks are dealing with at vein, while the latter has developed a finger vein solution. They the moment!” believe this is more secure than fingerprinting, voice and iris Jones suggests one of the problems is the legacy infrastructure recognition as these can all be scanned and recorded and and outdated mindsets in some mature markets which make it therefore be potentially used illegally by fraudsters. difficult to see any major decisions being made on biometric For Duffy it is a case of using the relevant solution for implementations. “The emerging countries are OK with the leap each separate scenario – dependent on the level of security whereas (in the UK) we’ve a bloated banking infrastructure. required. “You have to balance the benefits versus the cost,” he Other markets in Central and Eastern Europe are fast moving and says. Neil McEvoy, managing director at Consult Hyperion, agrees the banks are not constrained,” he says. and suggests biometrics should be used as part of a mix of He adds that the first moves in the UK will be within corporate security measures. “If it is an account balance request then it banking whereby the bank provides a terminal to its business could be done by voice recognition whereas if it is for moving customers who then access it via biometric technology. There money then it could be voice and fingerprint recognition as could also be internal implementations as Duffy reveals that well as a question being asked of the customer. You can go up to Fujitsu is talking to a number of banks about introducing the serious security for some transactions and biometrics will be biometric log-ins for laptops on the trading floors where hot- part of this.” desking is a feature. James Goldhill, associate director at Transform, believes care Another example of this internal use of biometrics can be seen has to be taken as consumers have seen contactless introduced at Sber Bank in Russia that uses the technology on the entry and that this has led to an element of mistrust as there is a “fear points to some of its buildings thereby limiting access into security is being compromised for ease of use.” He says it needs sensitive areas to specific individuals only. to be clear that where riskier transactions are undertaken then When these tentative steps by some financial services firms are higher levels of security should be expected – and this is where combined with the examples of serious implementations by biometrics would fit in well. banks in some other countries, then it is clear biometrics has come a long way since it first emerged a couple of decades ago Opening the door and it will undoubtedly be widely adopted around the globe. But As McEvoy sees it, a number of factors are working in favour of such are the major differences in the financial infrastructures of biometrics that will result in its widespread adoption by financial individual countries that the speed of take-up of the technology services firms – especially in the area of smart mobile devices: will vary wildly country-by-country.
F e b r U a r Y 2 0 1 4 P a g e 2 5 Caterham F1 case study Putting Caterham F1 on the road to success
About Caterham F1 8VYTLSRIFIRIƜXW Based out of Oxfordshire, the Caterham F1 Team first entered the F1 circuit Truphone’s patented technology and unique in 2010 and immediately started to compete on a global level. The constant approach gave the Caterham F1 Team a push for excellence presented significant technical and logistical challenges, competitive advantage other mobile operators but with the support of Truphone the Caterham F1 Team has risen to the task couldn’t replicate… and quickly established itself as formidable force within F1 racing. • Exceptional service Caterham F1 business challenge Outages aren’t an option for the Caterham F1 Team, so Truphone’s proprietary system tools In F1, the only thing that matters is performance and pursuing that means using provided a real benefit by constantly testing resources intelligently to secure every possible advantage. The Caterham F1 network stability and addressing issues in Team collects more than 20GB of data from every race as a result, with real-time. Additionally, Truphone’s worldwide trackside analysts in constant contact with the Oxfordshire HQ. Every second coverage and support offered extra peace of mind. counts and clear communication is crucial. That’s where Truphone comes in. • Greater collaboration The Truphone solution Truphone overcomes international borders to As official Mobile Telecommunications Provider, Truphone keeps the allow local calls between a growing number of Caterham F1 Team connected no matter what. Truphone’s unique systems countries, such as the UK, US and Australia. That tools monitor network performance to identify and address issues in means better call quality and no roaming fees – real-time, while a dedicated Business Help Team is always available just in which stopped cost limiting communication and case. Truphone’s unified global network also spans over 220 countries, bought the team closer together. delivering improved call quality to ensure the team collaborates as productively as possible and no time is wasted, ever. • Increased productivity
Truphone offers global tariff bundles for both groups and individuals that are customisable Š8VYTLSRIMWHIƜRMXIP]QEOMRKXLI'EXIVLEQ*8IEQQSVIIJJIGXMZI through a range of add-ons. The Caterham F1 ;ISTIVEXISREKPSFEPPIZIPŦ[IWIRHLYKIEQSYRXWSJHEXE Team seized on this by creating bespoke plans EVSYRHXLI[SVPH;MXLSYXXLEX[IWMQTP]GSYPHRŞXGSQTIXIš to free staff from the stress of monitoring their usage, letting them focus on the next race. Tom Webb, Caterham F1 Head of Communications
s p o n s o r ' s introduction
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© 2013 Truphone Limited. All Rights Reserved. (2013) Business as usual, no matter where you are in the world
The FCA in the UK and technology, that enables your traders to conduct business as the Dodd-Frank Act in the usual while the call gets recorded and stored securely. US have introduced new Most mobile operators also enable recording only in the regulations that require country where they are based. For example, if you sign on financial organisations to with them in the UK, you can avail of mobile recording only record all business-related in the UK. To record mobile conversations of traders travelling communications. These or based in other countries, you will have to work with a regulations outline strict provider in that country. Not the case with Truphone. Truphone record-keeping requirements for swap dealers and major swap is the only network to offer a global recording architecture participants and also cover transactions involving equities, bonds, where even if your company is based in the UK, and your traders derivatives and financial commodities. It is critical that mobile are in Hong Kong or New York, Truphone ensures all their mobile conversations are recorded, no matter where the trader is in the conversations are recorded, encrypted and stored. This is what world, to ensure there is an audit trail for compliance purposes. truly differentiates our network – a global architecture and the ability for you to work with one trusted partner. Put simply, if your business operates in any of these areas, Truphone Mobile Recording is available as either a hosted you’re required to: solution, which features a highly secure, resilient, cloud-based • Record all relevant communication on mobile devices, including storage service; or it can integrate with your existing recording SMS messages equipment, plugging directly into any third-party recorder/data • Store all recorded data for at least a year in the UK access component, as required. Access to these recordings is • Take reasonable steps to stop staff discussing business on securely encrypted and automatically monitored – ensuring the unrecorded devices system can be used as evidence in a court of law. Highly secure and totally flexible, Truphone Mobile Recording Truphone Mobile Recording helps financial institutions fulfill these adapts to your existing systems too, so your teams can close requirements, while at the same time providing better call quality business, on the go and faster data connections as a benefit of Truphone’s unique global architecture. Purpose-built to record both voice and SMS traffic internationally, Truphone Mobile Recording captures data Truphone Mobile Recording within the network itself – meaning there’s no effect on your is a purpose-built recording calling experience. service that helps facilitate Our mobile recording platform works across any handset and financial organisations in there are no call delays. It helps you meet regulatory requirements, meeting evolving industry quickly and easily, and records most calls made globally. That’s regulation, such as the because we run the world’s first truly global mobile network, with Dodd-Frank Act in the US a global recording architecture, that was built on truly disruptive, and FCA regulations in the UK. Unlike other recording patented technology. solutions, Truphone Mobile Recording captures all voice and Most recording services use specialist handsets or apps to SMS traffic from within the mobile network. No apps, no either capture traffic on a device or divert it to a remote server. delays. So, its business as usual no matter where you are in This results in connection delays of up to 30 seconds for long- the world. distance calls, in-call latency of up to 1.5 seconds and reduced Truphone Mobile Recording is powered by the Truphone phone functionality – something that encourages staff to avoid network, which connects over 200 countries with a single the software and therefore breach regulations. With Truphone, global infrastructure. Therefore, Truphone is THE only global there are no call delays because of our patented forking recording solution in the marketplace.
P AGE 2 6 F E B r u A R Y 2 0 1 4 CASE STUDY
Caterham F1® team case study
Putting Caterham F1® Team on the road to success ...... About Caterham F1® Team Truphone benefits
Based out of Oxfordshire, the Caterham F1® Team first entered the F1 circuit Truphone’s patented technology and unique in 2010 and immediatelyCaterham started to compete on F1 a global case level. The study constant approach gave the Caterham F1® Team a push for excellence presentedPutting significant Caterham technical F1 and on logistical the road challenges, to success competitive advantage other mobile operators but with the support of Truphone the Caterham F1® Team has risen to the couldn’t replicate… task and quickly established itself as formidable force within F1 racing. • Exceptional service About Caterham F1 8VYTLSRIFIRIƜXW Caterham F1® team business challenge Based out of Oxfordshire, the Caterham F1 Team first entered the F1 circuit Truphone’s patented technology and unique in 2010 and immediately started to compete on a global level. The constantOutages approacharen’t an gave option the Caterham for the F1 TeamCaterham a F1® In F1, the only thing thatpush mattersfor excellence is performance presented significant and pursuing technical andthat logistical means challenges, Team, socompetitive Truphone’s advantage proprietary other mobile system operators tools but with the support of Truphone the Caterham F1 Team has risen to the task couldn’t replicate… using resources intelligentlyand quickly to established secure itself every as formidable possible force advantage. within F1 racing. The provided a real benefit by constantly testing Caterham F1® Team collects more than 20GB of data from every race as a network stability• Exceptional and addressing service issues in real-time. result, with trackside analystsCaterham in constant F1 business contact challenge with the Oxfordshire HQ. Additionally,Outages Truphone’s aren’t an worldwideoption for the Caterham coverage F1 and Team, so Truphone’s proprietary system tools Every second counts In and F1, the clear only thing communication that matters is performance is crucial. and That’s pursuing where that meanssupport using offered extra peace of mind. provided a real benefit by constantly testing resources intelligently to secure every possible advantage. The Caterham F1 Truphone comes in. network stability and addressing issues in Team collects more than 20GB of data from every race as a result, with real-time. Additionally, Truphone’s worldwide trackside analysts in constant contact with the Oxfordshire HQ. Every second• Greater collaboration coverage and support offered extra peace of mind. The Truphone solutioncounts and clear communication is crucial. That’s where Truphone comes in. Truphone• overcomesGreater collaboration international borders to allow The Truphone solution As official Mobile Telecommunications Provider, Truphone keeps the local calls betweenTruphone overcomesa growing international number of borders countries, to As official Mobile Telecommunications Provider, Truphone keeps the Caterham F1® Team connected no matter what. Truphone’s unique systems such as theallow UK, USlocal and calls Australia. between a growingThat means number better of Caterham F1 Team connected no matter what. Truphone’s unique systems countries, such as the UK, US and Australia. That tools monitor networktools performance monitor network to performance identify andto identify address and address issues issues in in call quality meansand no better roaming call quality fees and – no which roaming stopped fees – real-time, while a dedicated Business Help Team is always available just in real-time, while a dedicated Business Help Team is always available just in cost limitingwhich communication stopped cost limiting and communicationbought the team and case. Truphone’s unified global network also spans over 220 countries, bought the team closer together. case. Truphone’s unifieddelivering global improved network call quality also spansto ensure over the team 220 collaborates countries, as closer together. delivering improved callproductively quality to ensureas possible the and team no timecollaborates is wasted, asever. productively • Increased productivity
as possible and no time is wasted, ever. • IncreasedTruphone productivity offers global tariff bundles for both groups and individuals that are customisable Š8VYTLSRIMWHIƜRMXIP]QEOMRKXLI'EXIVLEQ*8IEQQSVIIJJIGXMZI through a range of add-ons. The Caterham F1 ...... ;ISTIVEXISREKPSFEPPIZIPŦ[IWIRHLYKIEQSYRXWSJHEXE Truphone Teamoffers seized global on this tariff by creating bundles bespoke for plans both EVSYRHXLI[SVPH;MXLSYXXLEX[IWMQTP]GSYPHRŞXGSQTIXIš groups andto freeindividuals staff from thethat stress are of monitoringcustomisable their usage, letting them focus on the next race. “Truphone is definitelyTom making Webb, the Caterham Caterham F1 Head F1 of® CommunicationsTeam more effective. We through a range of add-ons. The Caterham F1® operate on a global level… we send huge amounts of data around the world. Team seized on this by creating bespoke plans to Without that, we simply couldn’t compete.” free staff from the stress of monitoring their usage, Tom Webb, Caterham F1® Team Head of Communications letting them focus on the next race.
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truphone.indd 2 11/02/2014 15:07:38 Truphone Mobile Recording Global compliance for global businesses
Truphone Mobile Recording can seamlessly record, All your calls – on the record encrypt and store all your business calls. It’s become - Record all your business calls and texts, an indispensible tool for international financial simply and securely. organisations who need to comply with industry regulations from the Dodd-Frank act in the US to - Get up and running quickly with no FCA regulations in the UK. That’s why five of the interruption to your normal phone service. eight largest investment banks in the world are - Enjoy clearer calls, faster internet access already using Truphone Mobile Recording. We are the and lower rates in over 220 countries. only recording solution that helps facilitate global compliance, without compromising on call quality. Visit truphone.com to learn more
Untitled-10531_TMR_1_Page_Ad_AW.indd 1 1 11/02/201410/02/2014 09:39:45 16:49 FS techc o m p l i a n c e s u p p l e m e n t FStech
Changing Features 30 Breaking barriers
Launching a new bank today could take as little as nine months under the horizons new regulatory framework. David Adams reports 32 The innovation game
Opinion among vendors and solution providers appears to be divided on whether excessive regulation is holding back new financial services technol- ogy. Paul Golden reports
34 A matter of time
Hannah Prevett looks at how FS organisations have responded re. the legal requirement to record mobile communications to and from trading floors
Sponsored by c o m p l i a n c e o v e r v i e w
S p o n s o r e d by Breaking barriers
Launching a new bank today could take as little as nine months under the new regulatory framework. David Adams reports
n January, Ed Miliband customers switched last year, up from a long term average of four announced that If Labour per cent. But these are still fairly small numbers within the overall Iwon the 2015 General picture. Election it would instruct But might this sector be transformed in the near future by the the Competition and injection of new blood? Both Tesco and Virgin are set to Markets Authority to assess launch current accounts during 2014. And we might be whether limiting the market about to see many more new entrants, suggests Anthony share of the biggest banks Thomson, founder and former chairman of Metro Bank. would benefit consumers With regulatory changes having made the banking license and small businesses. application process much quicker and less onerous and Although a number of improved access to payments services for new entrants, Thomson industry experts and even believes we may see a boom in banking applications over the next the governor of the Bank of three to five years, including from new firms with a greater England Mark Carney focus on particular areas of the country. He told delegates at the questioned whether limiting Future for Regional Banks conference in November that a the size of banks would source at the FCA had revealed 21 companies were in the have the desired effect on pre-application phase. competition, the fact is, at The regulatory changes that may enable this began when the present, the largest five FSA was replaced by the FCA and PRA last spring, but were driven banks hold about 85 per by work the FSA completed during 2012. There are now two cent of the UK’s current routes a company wanting to launch banking services can follow. accounts (Lloyds Banking One is to present the Regulator with full details of their Group has 30 per cent, RBS application up front – a route that might be taken by an overseas 16, HSBC 14, Barclays 13, bank seeking to launch services in the UK. Santander 12) and 67 per Completely new entrants might be more likely to take the cent of mortgage lending. second route: presenting regulators with a business plan, upon True, the number of which they then receive detailed feedback. Having addressed any people switching to a issues highlighted by the regulator they can then submit their different bank has increased application in the knowledge it is more likely to be approved. The since the government full process could be completed within about nine months. By launched a major initiative comparison, it took Metro Bank two and a half years to pass to encourage this in 2013: through the previous application process. the Payments Council says Banks are also no longer required to hold such large amounts switching rose by 17 per of regulatory capital as in the past – an important step, says Fiona cent in the last three months Brownsell, CEO and founder of the consultancy and systems of 2013 to 306,000 and integrator Tusmor, as this means launching a bank no longer about eight per cent of depends above all “on the depth of your pockets.”
p a G e 3 0 F E B R U a r Y 2 0 1 4 The final regulatory change Thomson believes will give new emergence of offerings such as entrants a big boost will be the forthcoming establishment of a GoBank in the US, “effectively a dedicated regulatory body for payments. This should mean tablet-based bank”, as an that access to the payments processing systems (owned and example of the way technology controlled by the largest banks) is disproportionately expensive may change consumer for new entrants and smaller companies. “The new payments expectations. He also believes regulator is critical to remove the final hurdle that has many new entrants are likely to been preventing new entrants launching current accounts,” specialise in particular areas of says Brownsell. consumer finance, such as payments, consumer finance, or Technology in play unsecured lending, rather than Technological advances will also help. Online and mobile offer the complete range of technologies are enabling the further development of mobile and banking services. online banking services that do not require a branch infrastructure, But Alex Kwiatowski head of while more use of off the shelf, or outsourced banking financial insights, Europe, at IDC, technologies will allow new entrants and smaller players to remains unconvinced that the construct – or in some cases share – effective IT infrastructures at new entrants will make much far lower costs. difference. “If history is a reliable Brownsell believes more banks with a regional focus could guide, PR agencies will get rich provide UK consumers and businesses with the same benefits out of it as companies trumpet enjoyed by customers of regional banks in Switzerland and their new ideas, but will Germany, with more localised decision making and greater consumers trust an organisation financial support for local businesses and communities. they’ve never heard of with their Thomson thinks the credit union sector could also become money?” he asks. “You may have more important at a local level, applying for banking licenses to a visionary, like Anthony take deposits and increase their lending. But he feels that while Thomson, like Vernon Hill, or some new entrants to the banking sector may have a regional Richard Branson, but as many focus to begin with, all will be able to exploit online and mobile have found in UK financial technology to increase their geographical reach. services before, actually bringing The question is, if these new entrants do appear in the market services to market is very hard.” will it really make much difference? Eric Leenders, executive Thomson is convinced that director of retail at the British Bankers Association (BBA), stresses the new wave of banks will the organisation’s commitment to supporting new entrants, but enrich the market. “We have acknowledges the factors that seem to limit account switching. the potential to see lots more People are most likely to switch, he suggests, either because of a new banks,” he says. “Some disastrously negative experience with their current bank – not will look like credit unions, we that common an occurrence – or because another bank is may see peer to peer lenders offering a tempting proposition. But it seems many consumers acquiring banking licenses; and now assume that their own bank is likely to copy good ideas seen we will see regionally-based elsewhere at some point, so wait rather than switch. banks. None of us has a crystal Thomson’s response to these points is to point to the 230,000 ball, but the rules have been people who have signed up with Metro Bank: a proposition that massively simplified, the time to is not based on price. He also points out that the consultancy launch has reduced, the capital Simon-Kucher is predicting 12 per cent of consumers will switch you have to hold has reduced; in 2014, while research from industry watchers including Deloitte and issues around accessing the and PwC suggests that up to 40 per cent would do so if there payments system are being was ‘a real alternative’. “The challenge to the new entrants is to resolved. So all the barriers that be that real alternative.” did exist have been reduced or Tony Prestedge, chief operating officer at Nationwide, believes removed.” we will see significant innovation in banking over the next few The consequences of those years – but not just come from new entrants: “from other sectors changes will start to become clear and particularly from the technology sector.” He points to the this year.
F E B R U a r Y 2 0 1 4 p a G e 3 1 c o m p l i a n c e & i n n o v a t i o n
The innovation game
n the 2014 Global Regulatory Outlook report published by Kinetic Partners, the firm’s global Ihead of consulting Monique Melis observed that the investment banking and broking community has come under intense pressure from regulatory authorities since the global financial crisis. While acknowledging that regulators are trying to impose higher moral standards without destroying the industry, she warns that heavy-handed oversight is arguably just as detrimental for financial innovation as the outcome of ‘light touch’ regulation was. Sunil Prahbu, industry consultant for banking and insurance at Lexmark, is one of those who believes regulatory compliance has stopped banks from adopting innovative new technologies like mobile and cloud. “Banks have been investing heavily in compliance to keep abreast of demanding regulatory requirements, but this has come at a cost as evidenced by the numerous outages experienced by RBS customers in recent times. Other contributing factors include the liquidity crisis, the global financial crisis, the Eurozone crisis and outdated core-banking backbone, which will not be able to completely leverage the new technologies.” According to CCL Co-Comply director Chris Kaye, regulation is holding back technology innovation in two ways. “Firstly, the need to Regulation and technological innovation are not comply with regulation is absorbing the bulk of always the most comfortable of bedfellows and firms’ IT budgets and this is just to keep the lights opinion among vendors and solution providers on; there is no budget, capacity or even desire to appears to be divided on whether excessive innovate at the same time. Secondly, the biggest regulation is holding back new financial services innovation and opportunity for financial services is technology. Paul Golden reports the cloud. However, people are still nervous about or do not fully understand the growing regulatory implications and risks of moving data, especially sensitive data, to the cloud. Some of the greatest technical advances are being witnessed in less regulated territories Overly tight deadlines and lack of technical clarity are holding such as Africa, where mobile technology is completely changing back the industry. The amount of resource that firms need to the payments market.” commit to meet unrealistic deadlines means they endanger their
p a G e 3 2 F E BRU A R Y 2 0 1 4 S p o n s o r e d by
‘business as usual’ as well as pretty much halt new initiatives Regulation is actually driving innovation in technology as firms while the ‘has to be done’ stuff gets done. That is the view of are having to streamline their workflow to remain in line with the Steve Young, CEO at Citisoft, who suggests that the basic issue new rules, claims Fidessa director of group strategy, Steve Grob. with regulation is that it tends to be politically driven and thus has “Key to this is consistent information from front through to no focus for how firms may need to adapt or replace their middle and back office and reducing the number of different technology to adhere to it. “The other major frustration is that systems that each firm operates.” the detailed requirements that may require technology code or The European Commission’s proposal for a new regulation to configuration changes are never easy to build on the existing Markets in Financial Instruments Directive extricate from the pages and pages of legally (MiFID) framework is a recent example of regulation changing to scribed jargon which is very often vague, reflect advances in technology. especially in the early stages of the regulation’s “The new proposals are designed to take into account life, thus limiting the supplier’s opportunity to developments in the trading environment since the implementation develop in line with the regulation.” of MiFID in 2007, including advances in technology and gaps in transparency to investors and regulators,” explains Kinetic Another take Partners associate director, Alison Adcock. However, Simon Kirby, senior pre-sales Market, product and technology developments have been consultant and solvency II specialist, SAS UK & seen as outpacing the provisions of the original directive, with Ireland says increased regulation often means structures such as high frequency trading and dark pools falling that financial services companies need to do outside the scope of the original MiFID. But there is also a something better, quicker or smarter. “This divergence of opinion among the industry participants interviewed means that they will seek to improve systems by FStech on whether regulators have a responsibility to monitor and processes, which in turn drives demand for developments in technology to ensure that new products and technology innovation. The regulators realise services are compliant with existing regulations. that they also need to improve their use of “Many of the regulations are pan-European or even global in technology in order to make better use of the nature, but with local interpretations it would be a complex data they receive from the firms they regulate.” challenge for the regulator to monitor every technology platform His colleague and capital markets industry and ensure compliance in various jurisdictions,” says Prahbu. lead Vincent Kilcoyne adds that innovation in According to Kirby, it is the job of financial services companies technology, both in terms of processing speeds to ensure that new products and services comply with existing (high performance computing, in-memory and regulations. “This may change in the future, but at the moment grid) and delivery models (cloud), are providing regulators like the FCA do not have the resources to review and organisations with access to functionality and approve all the new products and services that are issued.” services that would previously have been the Vanlint agrees, while adding that regulators should take an sole preserve of banks with big IT budgets. active interest in emerging technology and how this may create “Whilst the fact that banks are having to challenges for new or upcoming regulations – a view shared by spend more on regulation may mean that they Kilcoyne, who reckons it is essential that regulators remain are spending less in other areas (for example, attuned to risks that may be relevant to their remit such as on the development of new financial products) hacking or data oversight. this doesn’t necessarily mean that regulation is Grob explains that in Hong Kong and Singapore the regulatory holding back technology innovation in the authorities are compelling market participants to undertake financial services sector,” states Neill Vanlint, formal due diligence on their technology and suppliers to confirm MD EMEA and Asia, GoldenSource. that their systems meet various criteria in terms of resilience, “If anything, the opposite is true; there is a failover and compliance. strong argument to suggest that regulation is Kaye says regulators need to keep on top of the implications pushing forward technological advances and of new products and services and Young goes even further, helping to unlock new opportunities. The Legal suggesting that in an ideal world regulators would also ensure Entity Identifier, which is triggering a raft of that the various regulations are complementary and co-ordinated innovation across the industry, is a great as far as possible, allowing firms to take a more holistic view and example of this. Data aggregation, improved implement strategic changes. risk management processes and knowing customers better are all “The volume of regulations introduced has led to many tactical examples of operational benefits that have been derived from the solutions for each individual issue and this is not in the medium regulatory onslaught.” and long-term interest of anyone,” Young concludes.
F E BRU A R Y 2 0 1 4 p a G e 3 3 m o b i l e c a l l r e c o r d i n g
S p o n s o r e d b y A matter of time
ince the economic downturn, the banking sector has faced a raft of new regulation. But amongst the cacophony of Shype around heightened financial reporting and disclosure requirements, a small yet punchy bit of legislation tiptoed into the fray pertaining to mobile recording. First dreamt up by the then- FSA, mobile call recording regulation was initially floated in the UK in 2009. The financial regulator sought to impose call recording and full communications recording of all trade in the UK market, whether it was voice or data, or whether it be a fixed or mobile connection. But the regulation didn’t come to fruition, when it became obvious that there wasn’t the technology available to perform such tasks. Any technology that was in place wasn’t enterprise-ready, says Rik Turner, a senior analyst on the financial services technology team at Ovum. “It meant a lawyer who particularly wanted to record a conversation on their mobile could do so, but it did require user intervention and therefore could not be compliant.” A year later, the FSA decided the technology had evolved to a satisfactory extent and it would enforce the regulation from November 2011. At this time it became a legal requirement for regulated investment firms to record all mobile phone conversations relating to certain markets and store them where they could be easily recalled for investigation purposes if necessary. Compliance came with a hefty price tag: the FSA admitted that the cost of recording and putting the secure storage systems in place would cost up to an initial £10,000, with Hannah Prevett looks at how FS an ongoing cost of £2,000 per user, per year. For a large organisations have responded regarding investment bank that adds up to an eye-watering comms bill – the legal requirement to record mobile not to mention a logistical nightmare. communications to and from trading
The right approach floors For despite the fact that the technology had evolved to a satisfactory standard, there were still some teething problems. would be delays, much to the chagrin of the traders. “When Two main approaches had emerged as the de facto industry you’re dealing with high net worth individuals, delays with the standards. The first was what was known as the application or call being set up, which affected both incoming and outgoing software client approach. “In other words, your IT department calls, is just not acceptable,” says Furmidge, head of product would bung onto your corporate mobile a software client which management, financial technology services, BT. would sit on top of the operating system thereby enabling the BT was amongst the trailblazers of the most popular alternative phone to record the conversation in a compliant manner,” says – the SIM, or network-based approach. “It’s the approach that BT Turner. took from the beginning in the UK. We worked with a partner This proved unpopular amongst users. As calls would often and we were basically able to replace the standard SIM card have to be routed through the company’s landline network, there within a mobile phone with a SIM. Then that made sure that for
P a g e 3 4 F e b r U a r Y 2 0 1 4 S p o n s o r e d b y
an outbound or inbound call that call was trapped in the mobile in the legislation which leads to minor regional inconsistencies in network and effectively streamed down to our datacentres where approach. For example, in the UK, many financial services that could be recorded,” continues Furmidge. companies have plumped for cloud storage – despite a few initial For other providers, it has been more a case of a trial and error. concerns about security. “A lot of banks ran out of time (to Red Box Recorders initially opted for the application-based become compliant) and had to go into the cloud because onsite solution. “What became apparent is takes longer. All of our customers at that point said, ‘we’ll go to that it wasn’t an enterprise solution. the cloud and then we’ll migrate onsite once everything has It had some delays in the connectivity settled down’. Very few have,” says Liesching. “I think they’ve which didn’t really fit well with the stayed in the cloud because it works, it’s easy to administer, it’s users themselves, but it served a easy to control and we’ve been through over 60 security purpose in the first stages of roll- assessments.” out,” says Lee Jones, chief executive Meanwhile, over the pond, US banking counterparts have at Red Box Recorders, which has since been more reluctant to take advantage of cloud storage solutions ditched the application approach for due to the stringent Dodd Frank regulation which dictates in the a SIM-based alternative. event of an investigation, an FS firm must be able to retrieve all A knee-jerk reaction to the related files and information – including mobile and landline calls, legislation, to simply get any half- emails, instant messaging and so on – within 72 hours. viable solution in place, was “Therefore, having all that information in one place gives them a commonplace, says Paul Liesching, better chance of getting back to the regulator within that SVP, Truphone Mobile Recording, the timeframe, and the most logical place to have it is onsite,” mobile call recording business at explains Liesching. communications company Truphone. One of the effects of regulation becoming more globally “What banks don’t like doing is widespread is that vendors are keen to find ways to leverage the going to these tactical siloed solutions masses of data being gathered by call recording. Rather than that can’t provide them any kind of having thousands of audio files languishing in a datacentre, they strategic benefit.” could use analytics tools to gain useful insights. But further spend This is one of the reasons the on analytics tools is not currently top of the list for budget bigger players – including Truphone allocation, says Furmidge. “It’s seen as a nice to have. Firms are and BT – appear to be cornering the getting basic recording and compliance in place at the moment. market when it comes to mobile call But we do think it will happen and certainly we are positioning recording. BT claims to have 5,000 ourselves to be able to do that for customers.” mobile call recording clients, which is Analytics will present yet more opportunity for vendors in the a third of the total number of mobiles mobile recording space. Op3nvoice, which enables firms to the FSA originally estimated would search voice recordings for words or phrases, is just one that’s need to be recorded when it initially sprouted in recent years. Its director of financial services, Jason announced its intentions for the Boud, is the former head of voice at investment bank Credit legislation (Ovum places the number Suisse. He says that whilst there remains some pushback to closer to 25,000 in the City of mobile call recording, it’s simply a case of ‘like it or lump it’ for London). Both offer much more the investment banking community. besides mobile call recording, “They don’t have any choice, it’s as simple as that. If you work including an all-important global in a highly regulated industry, everything you do is monitored and reach. recorded. I guess the choice you have as a trader is whether you The days of opting for a regional or local solution are long go and work in a different industry. If you speak to any gone, says Furmidge. “Something which started with the FSA compliance person in any bank they’ll have the same view,” he taking the lead in the UK is clearly becoming a global requirement,” observes. he comments. “Even with the Dodd Frank regulations, (in the Tantrums on the trading floor withstanding, it’s only a matter United States) it’s not just limited to people in the US – it’s actually of time before the regulation gets teeth and begins to bite those anybody trading on the US markets. That includes firms in Asia, who are non-compliant, says Ovum’s Turner. “It might be this firms in the UK trading on the US markets in those swaps areas year, it might be next year, or they might wait until 2016, but the have to be recorded.” first time somebody gets a fine, everybody else in the City will run Yet whilst the regulation is becoming more global, and around like headless chickens saying ‘for Christ’s sake, what do seemingly the solutions are too, there remain a few inconsistencies we have in place?’”
F e b r U a r Y 2 0 1 4 P a g e 3 5 awards 2014
Awards Gala Dinner and Ceremony Thursday 27 March 2014, Lancaster London Hotel, Hyde Park
Congratulations to the finalists!
We are delighted to announce the 14th annual FStech Awards shortlist. Barclays, Nationwide Building Society, RBS, Lloyds Banking Group, Fiserv, BT and Misys are among the companies shortlisted for the 2014 FStech Awards. The winners will be announced on Thursday 27 March at the London Lancaster Hotel.
We look forward to seeing you on the night as we once again celebrate the innovative, fast moving financial services technology sector.
2014 FStech Awards Shortlist
Best Use of Social Media Best Trading System Barclays Bank (SmartCall) Friends Life Deutsche Bank Deutsche Bank LMAX Exchange MahiFX LV= Social Advisors Maybank Group/Misys Santander/Vizolution Portware TEB SME Banking Group Best Use of IT in Retail Banking Barclays Bank Best Use of IT in Insurance Best Use of Online Services Co-operative Bank of Kenya/Misys Achmea Insurance/BlackLine Systems Bank of America Merrill Lynch Lloyds Banking Group Exeter Family Friendly LV= Nationwide Building Society/IPL LV= Nutmeg.com Nationwide Building Society/IRESS UK Standard Chartered Bank (China) Data Governance Project of the Year Swissquote Bank/Temenos Best Use of IT in Wholesale & Investment Allianz Ireland Unity Trust Bank Banking Ecclesiastical Insurance/SAS UK and Ireland Bank of America Merrill Lynch (Trade Pro) ISDA/Sapient Global Markets Best Use of Mobile Deutsche Bank MKK Central Securities Depository of Turkey Bank of the West/Fiserv GE Capital UK National Australia Group Europe Barclays (MyDevice) Investec Asset Management Barclays Bank Nutmeg.com Best Use of Technology in Customer Service Deutsche Bank (Mobile Platform) UniCredit Business Integrated Solutions/Splunk Barclays/BT Global Payments/Intuit
With thanks to our sponsors Branding sponsor
42-43_FStech-Awards.indd 1 10/02/2014 12:51:38 RBS/Monitise/Visa Europe Unity Trust Bank Fixnetix Societe Generale Virtual Piggy MarketsPulse Thomson Reuters WorldPay MphasiS Perforce Software Anti-fraud/Security Strategy of the Year IT Team of the Year Phoebus Software Ally Bank Citi PROFILE Software Barclaycard Deutsche Bank S&P Capital IQ Real-Time Solutions Garanti Bank/FICO Exeter Family Friendly Sentronex Nationwide Building Society/SAS Lloyds Banking Group (IT PM and BA Department) VEN/ValidSoft LV= CIO department Online/Mobile Technology Provider National Australia Group Europe of the Year Compliance Project of the Year AirWatch Barclaycard Cloud Computing Innovation of the Year Arxan Technologies Deutsche Bank Bank of America BlackLine Systems Handpoint BFA Bank/Diasoft CurrencyFair Lloyds Banking Group BlackLine Systems Distribution Technology National Australia Group Europe Mambu MarketInvoice Sapient Global Markets Workshare Monitise Quintessential Finance Group Systems Integration Project of the Year Risk Management Software of the Year Seven Investment Management Bank of America Aon Benfield Truphone Citi Acclimatise Commercial Bank of Africa/Temenos Fiserv Most Disruptive Financial OpenGamma Sector Technology Best Use of Networking/Cabling Quantifi Acquis Exhange LMAX Exchange SIX Swiss Exchange BATS Chi-X Europe National Australia Group Europe TeleWare Citicom Solutions (UK) Visa Europe/BT TM Group Mambu Wolters Kluwer Financial Services miiCard Outsourcing Partnership of the Year Xactium NetPay Credit Suisse/BT smartTrade Technologies Coller Capital/DataArt Most Innovative Product of the Year Tradable National Australia Group Europe Adaptiva TransferGo National Savings & Investments/Atos ACI Worldwide Vizolution Tiaa-Henderson Real Estate/Telstra Global FircoSoft Zapp USS/Civica Fluency Solutions ZNAP Landmark Information Group Payments Innovation of the Year Platform Black European Payment Services SanDisk i-movo SunGard Financial Systems Barry Holland Memorial Award for Nordea Bank/Misys Tarmin Outstanding Individual Achievement Paylib Services To be announced on the evening. Syniverse Technology Provider of the Year The Currency Cloud Cinnober Financial Technology Overall winner Ukash Eze Castle Integration To be announced on the evening.
Book Your Table Now: www.fstech.co.uk/awards
In association with Media partner
42-43_FStech-Awards.indd 2 10/02/2014 12:51:43 f i n t e c h i n s i g h t 2 0 1 4 Hot right now
he report, created by PR bods Metia, contains contributions from Aite Group, Booz Allen Hamilton, Celent, Chartis TResearch, Citisoft, Consult Hyperion, Deloitte, Everest Group, Greenwich Associates, IDC Financial Insights, KapronAsia, Lipis & Lipis, Mercator Advisory Group, Ovum and Pierre Audoin Consultants. “We have gathered the views of 34 of the smartest influencers in FinTech,” says Steve Ellis, CEO, Metia. “Some sectors such as retail banking and cryptocurrency, are experiencing a period of rapid innovation. Business practices in other areas, such as payments, are being challenged as disruptive technologies make their presence felt. Regulatory pressures are a constant; institutions are looking to technology to help them deal with this pressure. It’s an exciting time to be in FinTech.” It is indeed. Credit where credit’s due, the report, weighing in at 50 plus pages, for the most part succeeds in capturing the sense of a sector in a state of flux. Yet seasoned FS technology observers should note that they won’t find anything out of the
Scott Thompson reviews the FinTech Insight 2014 report, in which analyst houses and consultancies provide viewpoints into the issues and technologies set to make their mark in 2014, those on the wane, and those still to deliver
blue here or very many bold predictions. Bitcoin? Check. warehouse will look like for the buy-side and 2.) drive investment NFC? Check. Big Data? Check. All present and correct. You get in next generation portfolio and security analytics tools.” the picture… Progress is also being made in Asia Pacific banks. “We believe In terms of the latter, it was the big miss of 2013, according to that by 2020 most of the largest banking institutions in Asia will Daniel Mayo, practice leader, Ovum. “People thought it would have Big Data analytics capabilities,” comments Michael Araneta, take off. There’s been a lot of hype, but it’s already moved to the consulting and research director, IDC Financial Insights. trough of disillusionment phase. The feedback from banks is that they don’t want to hear another Big Data story. Use cases are low Don’t believe the hype and often less dramatic versus other issues which are more Bitcoin receives mixed reviews in the report. It has landed acres of pressing. It will come, but it won’t be as big as everyone press coverage and whipped up an intensely loyal and enthusiastic predicted,” he says. following, but regulatory uncertainty remains an obstacle. Ben Keeler, director of practice development, Citisoft: “We “Regulators don’t yet know what to do with Bitcoin. Thailand has don’t see 2014 as the year Big Data arrives on the buy-side but banned digital currency exchanges outright; Germany has we do see managers leveraging tools born out of the Big Data acknowledged the currency as a legitimate transaction unit and movement. Technologies like Hadoop were created to support even collects sales tax on the transactions; and US federal Big Data concepts and allow for better handling of large, regulators have imposed daunting requirements that Bitcoin structured and unstructured data sets. Investment managers will exchanges get licensed as money transmitters and comply with actively be evaluating these technologies in 2014 and their AML regulations,” says Julie Conroy, research director, Aite findings will likely 1.) crystalise what the next generation data Group. “Amid these ups and downs, Bitcoin’s value has fluctuated
PA g e 3 8 f e B R U A R Y 2 0 1 4 substantially but recouped lost value quickly, a sign of resilience. Another area which is going to be hot in 2014 is It is too early to know whether Bitcoin and its brethren will data lineage and data provenance, according to weather the storms necessary to make it to mainstream. To do so, Virginie O’Shea, senior analyst, Aite Group. “It the currencies will need to sacrifice some of their outsider comes back to the need for an audit trail and standing and work within sovereign regulatory structures in order pushing ownership of data and responsibility to remove the uncertainty swirling around them. The question is back on the business. Even the buy-side is whether this can be accomplished while the currency retains the waking up to the need to improve data efficiency that drives value in legitimate use cases.” governance and will continue working on “The interesting thing about Bitcoin is in my opinion, and for developing best practices over the next 12 that matter in other people’s opinion, the technology of months.” maintaining the open and distributed ledger and the use of Elsewhere, real-time payments has made cryptographic ‘proof of work’. But this is technical and as a astonishing progress and 2013 was a consequence it’s boring to journalists and no one understands it,” watershed year, argues Leo Lipis, managing director, Lipis says David Birch, global ambassador, Consult Hyperion. “The only & Lipis. “Many of the innovators now sit in the interesting thing about Bitcoin, if you don’t understand the developing world, e.g. Nigeria, India, Chile, Brazil, technology, is the ‘currency’ which has a wonderful creation myth places you might not expect. Two of the largest and a devoted following who display a fervour that is extraordinary. markers have also not made much progress; Europe Hence the tremendous media focus, on the wrong thing, the with SEPA and the US who voted against same day appearance of an alternative to the state-issued, interest-bearing payments at NACHA last year. The Fed Reserve has flat currency money system.” initiated a public consultation on how to speed up Gilles Ubaghs, senior analyst, Ovum, urges us to keep in mind payments in the US but it is early days there.” that, even if Bitcoin fails, the principle behind it still stands and a Finally, in the retail banking space tablets will take off. “Some more price stable system could easily arrive in its place. banks view this as just another channel and another cost. Where NFC and social media fare less well. The former is given short banks have worked on a tablet app with responsive design, shrift by Thomas Zink, research manager, IDC Financial Insights. you get an uptick in activity through cross selling,” Deloitte “Most commercial NFC roll-outs have reached a state of ongoing points out. paralysis after the first wave of early adopters. Even in Japan and It also notes that there has been noise around social credit Korea, where NFC saw a much larger uptake than elsewhere, it models with firms such as Kreditech, Neo Finance and Lenddo remains a niche product for transit payments and students,” he that are generating credit scores using social data. The notes. “Those who have invested in mobile NFC are stuck having advancement of computer processing capability, improvements spent too much money and effort to let go. The hope is that in analytical software, reduction in the cost of storage consumers eventually will change their minds and embrace the combined with the widespread adoption of social media have technology.” facilitated this. And social media gets blasted out of the water by Celent. “It And it wouldn’t be a FinTech predictions report without at will remain ‘cold’ in 2014. It is one of the most talked about least one mention of Google Glass. The next big thing or a load subjects but still very immature. Banks are having a hard enough of nonsense? Deloitte is sitting on the fence. “Banks globally time managing basic social media interactions and security have talked about bringing out an app. It will be interesting to threats and many have expressed concern that angry customers see if this is something to watch and whether of not it will gain are more likely to post comments than satisfied customers. Just wider adoption.” look at #AskJPMC. The list of companies that have had their IDC Financial Insights’ Zink, however, goes out on a limb. “I Twitter accounts hacked is almost endless, and the aftermath may don’t think mobile NFC or wearables will change the way we pay. put into question doing more than simple customer support and Expanding the forecast to 2020, I have doubts whether there will PR.” be a need for proximity payments in the first place. While So, those are the damp squibs, but what about the hits in consumers will still pay at shops and restaurants, commerce will 2014? Daniel Latimore, senior vice president, Celent, sees good have virtualised. Whether the price is displayed as a barcode, an times ahead for core banking vendors. “The concept of ’rip and NFC tag, or in another way won’t matter. Payment technologies replace’, if not dead, is in critical condition. Vendors who are will have converged to provide the consumer with the simplest open to interoperability will have a leg up in 2014.” and most convenient solution.” “Moving away from rip and replace so that banks can conduct And he concludes: “As for 2030, cash will still be king.” projects in phases is very attractive and we’re seeing more Good news for consumers, who still like and trust coins and institutions moving in this direction,” observes Christine Barry, notes. Bad news for the banks and card schemes who would like research director, Aite Group. it gone asap.
f e BRUARY 2014 PA g e 3 9 c o m m e n t On the brink?
Freddie McMahon, head of innovation and strategy at FusionExperience, looks at how the FS industry is facing competition from a growing range of challengers
s the global economic outlook improves, the FS umes grew 65 per cent in 2012 to $945 million; donations market is focusing on how it can return to growth. crowdfunding grew by 85 per cent; lending-based crowd- AHowever, everything from new banking entrants to funding grew 111 per cent and equity-based crowdfunding virtual currencies and innovations in digital transactions has grew 30 per cent. created major changes that threaten the dominance of the A raft of digital giants are also setting themselves up to UK’s “big banks”. As a result, financial services is on the displace some of the capabilities traditionally reserved for brink of a transformational era with its entrepreneurial banks. For example, Apple and Google are rapidly evolving energy creating the potential for long-term change. monetary wallets for mobile devices linked with near field Challengers to the big five banks are focused on using communication payments for payments ‘on the go’. behaviour economics to drive customer acquisition and Smartphones are facilitating this change in behaviour and make significant inroads into traditional banking. For exam- companies like Google, Apple, Microsoft, Facebook and ple, Tesco Bank recently announced that £12 billion a year is Amazon are acting as intermediaries, which pioneer stored spent using its credit card by 6.8 million customers. As a monetary value. Whilst this evolution has been happening result, it is now planning to offer current accounts to con- for some time, such developments will allow digital compa- solidate its position in the market. With large amounts of nies to use stored monetary value as a ‘living current capital and a captive customer base, supermarkets have a account’ that effectively bypasses the banks. The emerging significant opportunity in the FS space. By using available acceptance of virtual currencies has also contributed to the data to detect behavioural patterns, retailers can use the beginning of a paradigm shift in modern micro monetary margins in their financial products to influence behaviours. systems. Whilst there are still question marks hanging over For example, by identifying customers who prefer short-term the longevity of Bitcoin, it is placing pressure on organisa- lending, retailers can offer consumers discounts or promo- tions to create a system that enables frictionless money tions to encourage spending on financial products with transfer. Bitcoin has grown its reputation as a peer-to-peer lower-interest rates. digital currency that offers a secure financial system inde- In addition, some of the most successful challengers to pendent of traditional banks. In addition, low-cost or non- traditional banks are joining the market with simple products existent transaction fees have driven the uptake of Bitcoin that have a lower-level of risk. Fast-growing institutions, such among online retailers who can increase sales margins by as Metro Bank, are launching ‘stores’ on the High Street that accepting it as a method of payment. So far, Overstock.com, offer simple services so they can reduce the overheads asso- Zynga, OKCupid, and WordPress have all signed-up to using ciated with compliance and capital adequacy requirements. it. As the FS industry approaches a stage where serious Adopting this approach allows new challengers to quickly money is invested in virtual currencies, it is likely that we will achieve scale. Within the last year, Metro Bank has doubled see brands, for example, Apple and Amazon, start to create the number of customer current accounts and raised almost their own virtual currencies. It is now only a question of time £400 million to fund future expansions plans including the before the banking industry reaches a tipping point where creation of 200 new branches by 2020. Alternative lending the redistribution of cash liquidity materially impacts banking platforms have also invested in technologies that collate as we know it today. The convergence of so many different unstructured data to build a single-customer-view. As entrants into the financial services sector means it is becom- demand for lending exceeds supply, new entrants are using ing even more important for financial providers to sense- algorithms to determine risk profiles in a matter of minutes and-respond to the changing market dynamics being driven and based on a combination of richer data sources than by consumers. As a result, Big Data is becoming the differen- banks. Everything from social media interactions, web his- tiator of FS providers who need to understand customer tory, purchasing behaviour and previous correspondence can behaviours and anticipate changes in the consumption of be captured and used as the basis of instant lending deci- services. Collecting, connecting and correlating data has sions to grow market share. The big players are also coming become a ‘must have’ for any firm providing financial prod- under increasing pressure from new online entrants, such as ucts for informed, timely and actionable decisions that keep crowdfunding firms like seedrs.com and spacehive.com, pace with the rate of change. The traditional banks need to which are continuing to emerge all the time. The rate of become data-driven businesses in order to effectively com- growth for new platforms is so rapid, that the Massolution pete against the combination of new entrants and an ever Report recently revealed that European crowdfunding vol- fickle, increasingly demanding customer.
PAGE 4 0 F E B R U A R Y 2 0 1 4 FStech FStech Webinar, exclusive to FStech The infrastructure at the heart of the financial sector
Date: Tuesday, 25th March 2014
Time: 11:30 - 12:30
• Understand the global trends and spending by your global competitors • Discover the latest advances in ultra low latency networks • Discuss the security issues involved with cloud and hybrid solutions – and how to solve them • Debate the concept of private build networks vs managed services • Gain insight from our case studies into how other leading organisations are building high performance networks utilising technologies such as lean packets, coherent optical transport and software defined networking (SDN).
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Join our hosts to discuss the above mentioned issues, trends and concepts
Scott Thompson is Group Editor at FStech. He has been working in journalism for 14 years, during which time he has held senior editorial positions at and contributed to a number of business and technology-related publications.
Chris Janson is currently Sr. Industry Market Manager, Financial and Public Sector with Ciena and an adjunct lecturer at Northeastern University in Boston, where he teaches courses in product development and engineering economy. He holds an MBA from Boston University and Bachelor of Science from Wentworth Institute of Technology.
41_webinar.indd 2 12/02/2014 14:25:32 t a l k i n g p o i n t
talking point
Industry reaction to the news that migration even with this delay. In Finland, the European Commission has for example, due to timely preparations, a announced an extension of the clear schedule, strong relationships with deadline for SEPA compliance by software companies to help them with six months. this change and continuous collaboration Tony Virdi, vice president and head of with all parties involved, SEPA migration banking and financial services in the UK has been smooth and it is this level of Ensuring SEPA compliance isn’t a & Ireland, Cognizant: “This will no doubt in-depth planning that the UK market can quick fix. come as a welcome relief to many UK learn from.” organisations. While major banks have does not comply with the SEPA already started advising and guiding their Jonathan Williams, drector of strategic technical requirements? Who bears corporate clients in readiness for development, Experian: “We welcome the cost and effort in repairing and migration, there are too many FIs who the European Commission statement on re-processing it? were unsure whether the immediate the introduction of an additional six The organisations which remain migration date of 1 February 2014 month transition period to help migrate behind schedule have been given a six applied to them, so have not started euro payments to SEPA. Whilst it is month reprieve to get their house in planning for SEPA migration yet. regrettable that all payment service order. For businesses in this situation, this Ultimately, if they have subsidiaries, users in the Eurozone will not be ready is their last chance to get compliant by branches or even bank accounts within by the original deadline of 1 February working with a payment service provider Eurozone countries, they will need to be 2014, the lack of migration to the new to upgrade the necessary software and SEPA compliant within the year. This standards has been proven for a long processes, as well as verifying data extension shows that the EC recognises while and specifically the percentage of where necessary. As non-compliant many are not ready and gives them a direct debits has lagged far behind what businesses have effectively been issued a grace period, but they still need to react was expected. The figures being used by reprieve with this extension to 1 August swiftly to be ready on time. the Commission and the European 2014, it may be that the EC will interpret Ensuring SEPA compliance isn’t a quick Central Bank are certainly more up-to- rules more strictly and penalties may be fix; the level and scale of change depends date than those published for November levied. For businesses still to make the on the individual organisation and transactions which revealed 64.1 per transition, the risk of being made an companies need to work closely with cent of credit transfers and only 26 per example of and fined heavily is too high banks to ensure they are compliant. This cent of direct debits were processed to chance.” requires effective planning and using the new schemes. It is therefore communication to determine the right unsurprising that the authorities have Neil Burton, director of product strategy, solution and process ahead of the taken this decision, although we have Earthport: “Small businesses are deadline. Eurozone corporates still have before suggested that a moratorium on dependent on cash flow and governments some way to go to meet even the penalties for non-compliance was cannot let them suffer, as they would if extended deadline of SEPA compliance. likely. they’re not ready to transact payments The challenge is that the banks need to This still leaves some key questions by February when the SEPA deadline is work with their corporate clients as a unanswered: Who will legislate to eventually reached. Most regulated trusted partner to explain the rationale waive the provisions of the SEPA financial service providers stepped up to for the approach to compliance. This, regulation and when can this be the challenge – Earthport had to delay alongside the wider economic issues in done? Can payment service providers other developments to be SEPA-ready by the Eurozone is proving a challenge, and process old Euro transactions using new the deadline. The efficiencies gained by take-up is slower than anticipated. Plans SEPA schemes and, if so, will they be treating cross-border Euro payments as need to be put in place to respond to this forced to? Who will bear the cost of domestic payments are designed to bring in a timely and effective manner. running the old systems for six months benefits to all users of the system. Internationally, there are success stories longer, if that is necessary? What will Enforcement is needed so that these we can learn from to help a successful happen if a payment fails because it benefits can start being realised.”
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Untitled-1 1 24/01/2014 10:10:27 i n f o s e c e u r o p e Show
FStech brings you its preview of the 19th time Infosecurity Europe event
nfosecurity Europe is the largest and most attended information Meet with the key industry players security event in Europe. Held in London and taking place from From the New Exhibitor zone to the Country Pavilions, discover I29 April to 1 May, it is a free exhibition featuring over 325 the latest products and solutions of the local and international exhibitors and a diverse range of new products and services plus scene. This is your best opportunity to receive expert advice and a free education programme attracting visitors from every to discuss your needs with key information security players. segment of the industry across Europe. Infosecurity Europe is the most important date in the calendar for information security professionals across Europe. The Top three reasons for visitors to attend: attendees reflect every segment of the information security 1. Keep-up-to-date/see what is new industry coming from key sectors including: 2. Educate myself/my team 3. Talk to product experts or technical staff • IT distribution companies • IT hardware, software, manufacturers and suppliers Collect CPD/CPE credits • End-user information security professionals The Education Programme is shaped by the industry for the • Government professionals industry. Addressing the latest challenges and industry needs it will provide you with business critical insight, best practice and Infosecurity Europe 2014 Keynote Theatre practical case studies. Speakers include information security This year’s Keynote Theatre agenda will address the theme of thought-leaders from public and private sector end-users, policy- security as a business enabler, focusing on how a proactive, makers and government, analysts, industry experts, service resilient security strategy can add value to, and support growth providers and vendors. and transformation in the hyper-connected business. Bringing Featuring five conference and seminar theatres and a together senior end-user practitioners from the public and comprehensive programme of workshops and training courses, private sectors, policy-makers and analysts, the programme the Infosecurity Europe Education Programme helps you to will provide strategic insight, best-practice and real-life further develop your career and learning. experience, providing a unique opportunity for delegates
P AG e 4 4 f e B r u A R Y 2 0 1 4 to learn directly from the experts who are at the sharp-end opportunity to find out how to protect current legacy systems of information security. With panel discussions, presentations, and build resilience in current technology to protect against interviews and Q&A sessions, delegates will leave the future threats. sessions with strategic insight and practical tips that will enhance their personal skills and assist them in developing and ‘Applification’ of business and implications for security implementing a robust information security strategy for the next As applications increasingly become an essential part of a 12 months. business, agile software development is critical to enable rapid adaption and speed to market. At the same time, ‘applification’ Supporting innovation and transformation throws up a host of information security challenges. Embedding Information security is evolving, moving beyond technology to information security into software development is critical become a business discipline. By developing risk-based, to minimise vulnerabilities and ensure software meets intelligence lead security strategies, the information security regulations and OWASP standards. At Infosecurity Europe 2014 function is able to determine what the real level of risk is to the attendees will discover how DevOps can be used to embed business, and support decision-making within the organisation. security in the development lifecycle and how security and To do this the information security function needs to shake off development can work together to achieve best practice and the reputation for being risk averse, stifling innovation, agility and ensure the rapid delivery of secure applications to enable business efficiency with strict controls and policies to become business growth securely. lead – sharing the risk appetite of the business whilst protecting Attendees of the Keynote Theatre will also have the opportunity the enterprise with business lead strategies. So how can security to learn about business critical topics including building a functions start thinking like the business and become a business predictive threat intelligence capability, balancing security versus partner? How can business knowledge be brought into the usability, building transparency and trust in the supply chain, Big security team? How can security be integrated into agile business Data security intelligence, Generation Y and information security, practices and transformation? Keynote Theatre attendees will and what’s new in cybercrime. gain insight into how to transform information security to truly Speakers already confirmed to speak in the Keynote Theatre support the business. include senior representatives from Skype, Pearson, Viacom International Media Networks, Premier Farnell, Home Retail Future-proofing information security and protecting legacy Group, Rank Group, Travis Perkins, GE Capital and Amgen. systems Alongside this, a host of other theatres will be running including The pace of technological changes continues to increase. the Business Strategy Theatre, Technical Theatre, Security As businesses become more connected than ever before workshop and the Information Security Exchange Theatre, information security practitioners are tackling the dual challenges providing a format to meet all educational needs. of securing current legacy systems that are increasingly vulnerable For more information about what’s on for 2014, the educational to new risks, whilst looking ahead at how to future-proof sessions and to register for the event, visit: www.infosec.co.uk/ tomorrow’s legacy. At the show attendees will benefit from the visiting.
f e B r u A R Y 2 0 1 4 P AG e 4 5 contactless
Tipping point
Hannah Prevett attempts to wade through the hype surrounding contactless
here are few technologies to have filled more column confidence, as well as the growth in acceptance,” he says. inches in the past three years than contactless payments. Large-scale deployments have certainly helped contactless’ TAs distribution of cards and deployments of contactless- cause. Many High Street names, including the likes of Marks and enabled PoS terminals gathered pace, it seemed this form of Spencer, McDonald’s and Boots, have kitted their stores out with payment was finally being embraced into the mainstream. But the technology. Likewise, card issuers have upped distribution of the industry remains fragmented and customer response contactless-enabled cards: one in three people in the UK lukewarm. Is this technology really coming of age? now have a card in their wallet or handbag. But the two Predictably, the payments companies who have placed large need to go hand in hand, says Mark McMurtie, director at bets on contactless say a new day is dawning. In its annual results Payments Consultancy. “The issue with contactless is that it statement at the beginning of the year, Visa said that its revenues has been a classic chicken and egg scenario,” he says. “Do had climbed thanks to the “rapid adoption” of contactless you issue the contactless cards before the retailers have payments. UK consumers spent £460 million on Visa contactless upgraded their acceptance infrastructure, or do you do it the in the year to November 2013. This represents more than a other way around?” fourfold increase, from payments of just £96.7 million in 2012. Raja Ray, product manager at VeriFone, admits that the case Mark Austin, director of contactless at Visa Europe, believes for contactless isn’t attractive enough to entice IT directors to the solid set of financials are representative of a shift in public upgrade their hardware before the end of the natural hardware perception. “This is a sign of increased consumer awareness and lifecycle. “In many retail segments, contactless by itself is
P A G e 4 6 F E BRU A R Y 2 0 1 4 probably not a compelling struggle to remember the days before chip and pin, this enough proposition to demand a technology was also met with hostility from consumers in its early proactive upgrade. So they’ll year,” adds Lachenmeier. implement it as they upgrade With more use, customers are likely to become less wary of their PoS systems and upgrade contactless and more attuned to its merits, says McMurtie. “Quite their card acceptance systems,” rightly, consumers always have concerns, but these are dissipated he says. with usage, and also with reassurance from their bank and from But Ray also suggests that the retailer. A greater push towards education should help speed there will be increasing pressure up adoption.” from consumers to accept Visa Europe’s Austin agrees that retailers need to be educating contactless – especially in light of both their staff and customers about how the technology works. developments around mobile “You do need to make customers aware that contactless is now payments (m-payments). “For a payment option for them, and you need to make sure your staff the first time there will be a are confident in accepting contactless cards,” he says. And card consumer demand that will issuers need to play their part too, he adds. “Retail support is require filling. We’re going to crucial in encouraging consumers to use contactless payments, start seeing customers saying, but it’s not the only factor: there’s an onus on us and on ‘I’d like to use my phone because our members who issue contactless cards to do our bit to I can see other people doing it.’ encourage usage.” At the moment, there isn’t that With more than 36 million contactless cards now having been demand among customers, issued in the UK and 300,000 merchants accepting payment although there’s demand in the through this method, it seems this has reached a tipping point. industry; retailers see the service And the needle on the dial could be moved a few more inches by benefit.” some high-profile upcoming deployments. A major milestone will be the roll-out of a contactless payment pilot by Transport for The retailer POV London across the London transport network later this year. The benefits for retailers are two- Londoners can already tap their credit or debit card instead of an fold. The first is a cost-saving Oyster Card on the capital’s buses, but a similar system is benefit, the second time saving. expected to be implemented across the entire network later Roy Ford, IT director at Spar, this year. realised merchants could save 40 There are other predictions for the medium-to long-term per cent on processing fees if future of alternate and contactless payments. M-payments is a customers paid by contactless. major growth area, says Lachenmeier. “The next step for Time savings are particularly applicable in high volume retailers, contactless will be incorporating NFC technology into smartphone such as a coffee shop or a Marks and Spencer at a train station in devices. With consumers increasingly completing a number of central London. Both serve high volumes of customers – day-to-day tasks from their mobiles, this could prove to be a particularly during peak times. Serving customers more quickly popular solution.” can mean more cash ringing in the till. “So far logistical issues have stood in the way of widespread Is the time-saving incentive similarly compelling for consumers? adoption of contactless technology via smartphones – mobile- Alex Kwiatkowski, head of financial insights Europe at analyst enabled contactless payments rely on the right deals between firm IDC, is sceptical. “Is that convenience factor enough? Am I credit card companies, banks, mobile manufacturers and mobile in that much of a hurry that I’ve got to pay for my cup of coffee networks. However, Visa has made moves to bring mobile by contactless because I could not wait the 30 seconds it takes networks on board across Europe, which could be a sign that the for me to hand over a £5 note and for the barista to give me contactless revolution is on its way. Vodafone, Orange and my change?” Telecom Italia signed deals with Visa across Spain, France and Italy Worries about security continue to hamper take-up too, says last year, so contactless smartphone technology will be one to Bernhard Lachenmeier, head of products and marketing at SIX watch in 2014,” he predicts. Payment Services. “Customer concerns about security is one of Gazing into the crystal ball, technologists conjure images in the the major hurdles to widespread uptake of contactless payments mind’s eye of paying for groceries via wearable technology. But so far,” he admits. Yet he’s not conceding defeat just yet. “That Kwiatkowski warns against technology for technology’s sake. is not to say that there is no hope of encouraging a change in “Just because something is technologically possible, that doesn’t perception towards the technology. While many Europeans may make it operationally desirable.”
F E BRU A R Y 2 0 1 4 P A G e 4 7 ech tech ech tech ch ec h ech ech ec h ec h tech tech tech ec h ec h tech tech fs FSt ch
H tech EC tech ec h FSt ch
FStech FStech FStech FStech FS FStech tech FStechD i r e c t o r Y o f k e Y FS p l aY e r s FStech c a l l 020 7562 2430 tes o n i a .chpat e l @ f s t e c h . c o . u k f a x 020 7374 2701 FStech o r 020 7562 2429 e m m a . s t o k e s @ f s t e c h . c o . u k To make the directory section as easy as possible to use, we have added an index of headings below. These are listed alphabetically in order for you to find the products and services you are looking to source.
• Actionable Intelligence Solutions and Value-added Services • IT Security Solutions • Call Centre Technology and Applications • Mobile Voice Recording • Customer Experience Management • Open Source Management Solutions • Core Banking and Payment Solutions • Payment Efficiency and Risk Solutions • ERP / Business Solutions • Software Version Management & Development • IT Infrastructure Solutions • Telecoms Provider
call centre technologY anD applications Red Box Recorders Ltd Red Box brings simplicity to digital recording, with flexible solutions that are easy Bradmore Business Park to specify, install and manage. Loughborough Road Bradmore We focus on voice and data capture: Red Box software solutions cover Nottingham everything from storage and event logging, to retrieval, playback and analysis. NG11 6QA, UK Our latest products incorporate web-based interfaces for worldwide access to Tel: +44 (0)115 937 7100 replay, configuration and maintenance. Fax: +44 (0)115 937 7494 We have over 20 years' experience and a strong reputation for innovation. email: [email protected] www.redboxrecorders.com Little wonder, then, that Red Box solutions are used in over 120 countries.
customer experience management
eGain Communications EMEA Ltd eGain is a leading provider of cloud customer engagement solutions. 258 Bath Road Trusted by leading brands, eGain solutions help design and deliver smart, Slough connected customer journeys across social, mobile, web, and contact centres. eGain solutions help leading financial services companies to Berks. improve contact centre effectiveness, increase customer loyalty and SL1 4DX lifetime value, maximize ROI on web self-service, and deliver consistently excellent customer experiences. t. +44 (0) 1753 464646 e: [email protected] For more information and inspiration on building multichannel customer journeys, visit http://customerjourney.egain.com/financial or contact us www.egain.com via www.egain.com
core banking anD paYment solutions
Mrs. Antonella Comes Auriga is a software solutions company, specialized in end-to-end systems that Marketing & Communication Manager integrate the various delivery channels used in retail banking. The Company is a specialist provider of innovative multi-channel solutions to banks and other Auriga financial institutions, always focusing on shared and integrated architectures as Strada Vassallo,1 70125 Bari (BA) enablers for the implementation of new distribution channels as well as for the ITALY promotion of cross-channel capabilities. [email protected] [email protected] Auriga’s flagship solutions are WinWebServer (WWS), a unique cloud-based Phone: +39.080569211 concept to manage all distribution channels consistently and with minimum Fax: +39.0805692112 effort, regardless of the manufacturer of the terminals, and PlainPay a mobile And visit us at app integrated in WWS architecture, testimony of how Mobile technology can Website: www.aurigaspa.com become a cross channel enabler in today’s banks’ multi-channel strategy.
erp anD business solutions
m-hance m-hance has over 25 years’ experience of implementing integrated ERP Trinity House and CRM solutions which provide organisations with real-time business Bredbury Park Way intelligence, effective resource allocation and improved customer Stockport management. m-hance’s core solutions are complemented by an innovative SK6 2SN range of integrated cloud, mobile and social applications which improve productivity, cut costs and provide a rapid ROI. With over 100 financial Tel: (0)161 406 2300 services customers, including NCB and London & Capital, m-hance has E: [email protected] the knowledge and solutions to improve your business’s competitive advantage. For further information, visit http://www.m-hance.com/sectors/financial-services/
Jan_February_2014.indd 1 10/02/2014 10:32:21 DIRECTORY OF KEY PLAYERS c a l l 020 7562 2430 s o n i a . pat e l @ f s t e c h . c o . u k f a x 020 7374 2701 o r 020 7562 2429 e m m a . s t o k e s @ f s t e c h . c o . u k
erp anD business solutions
EASY SOFTWARE UK was founded in 1990 and is Europe’s foremost provider EASY SOFTWARE of integrated document management technologies with more than 12,000 customers worldwide.
T: +44 1284 727870 UK customers include the Co-Op, Anglian Water and The Premier League. F: +44 1284 727871 E: [email protected] We are a Microsoft Gold Partner and the second largest global provider of W: www.easysoftware.co.uk SAP archiving solutions. We promote our document management solutions through a network of 200+ global sales partners. EASY ENTERPRISE™, our flagship solution includes packaged solutions for invoice processing, contract management and HR records management.
it infrastructure solutions
Eze Castle Integration Eze Castle Integration is the leading provider of IT services to hedge 9 Marylebone Lane funds and investment firms. More than 600 funds rely on Eze Castle to 2nd Floor, London, W1U1HL be their single source of strategic IT consulting and support in designing, Simon Eyre, Director of Service procuring and managing their infrastructure. Services include Outsourced T: +44 (0)207 071 6835 IT, Private Cloud, Disaster Recovery and BCP, Storage, Archiving and more. E: [email protected] Eze Castle Integration has offices in London, Boston, Chicago, Dallas, Dean Hill, Director of Sales EMEA Geneva, Hong Kong, Los Angeles, Minneapolis, New York, San Francisco, T: +44 (0)207 071 6807 E: [email protected] Singapore, and Stamford.
it securitY solutions
IPL IPL – Big Enough to Trust, Small Enough to Care Eveleigh House IPL creates competitive advantage for Financial Institutions from Central Banks and Grove Street National Regulators to the world’s largest Building Society. Put simply, we have an unparalleled pedigree of delivering high quality IT Software and Business Consultancy Bath solutions within the most complex, highly secure and regulated environments. We BA1 5LR facilitate advances in organisation’s data lifecycle management strategies by improving data quality, data integration and data governance practices.
T: +44 (0)1225 475 000 We have recently delivered Nationwide’s new online banking platform and its E: [email protected] underpinning multi-channel framework.
W: finance.ipl.com IPL – welcome to our world of intelligent business.
it securitY solutions
ValidSoft Limited provides the world's leading telecommunications-based authentication ValidSoft (UK) Ltd solutions. Our cutting-edge technology presents the only integrated product set that provides 9 Devonshire Square both card-based and electronic fraud prevention solutions. Validsoft's solutions include London real-time proximity-based card fraud detection (VALid-POS®), as well as Internet Out-of-Band EC2M 4YF Man-in-the-Browser protection, Mobile based transactions and Voice Verification for Telephone United Kingdom Banking through its VALid® solution. It is also the first commercially available four-factor authentication solution through the combination of its own proprietary voice biometric T: +44 (0)20 3170 8125 technology coupled with Proximity Correlation Analysis. The solutions are designed for mass www.validsoft.com markets, in a highly cost effective and secure manner, yet are easy to use, intuitive and lever- age the most ubiquitous devices available. ValidSoft is the only security software company in the world to be awarded the European Privacy Seal for their product, VALid-POS®, which certifies its compliance with European Data Protection law.
mobile voice recorDing
Red Box Recorders Ltd Red Box brings simplicity to digital recording, with flexible solutions that are Bradmore Business Park easy to specify, install and manage. Loughborough Road Bradmore We focus on voice and data capture: Red Box software solutions cover Nottingham everything from storage and event logging, to retrieval, playback and analysis. NG11 6QA, UK Our latest products incorporate web-based interfaces for worldwide access to Tel: +44 (0)115 937 7100 replay, configuration and maintenance. Fax: +44 (0)115 937 7494 We have over 20 years' experience and a strong reputation for innovation. email: [email protected] Little wonder, then, that Red Box solutions are used in over 120 countries. www.redboxrecorders.com
Jan_February_2014.indd 2 10/02/2014 10:32:23 DIRECTORY OF KEY PLAYERS c a l l 020 7562 2430 s o n i a . pat e l @ f s t e c h . c o . u k f a x 020 7374 2701 o r 020 7562 2429 e m m a . s t o k e s @ f s t e c h . c o . u k
open source management solutions
Black Duck Offering award-winning software and consulting, Black Duck is the partner of United Kingdom choice for open source adoption, governance and management. According to Gartner, “by 2015 at least 95 percent of IT organisations will leverage open source within mission critical software deployments, but less than 50 percent Tel: +44 20 3290 0770 will have effective governance programs.” E: [email protected] We help financial services organisations harness the power of open source technologies and methods for faster innovation and improved efficiency by:
• Reducing operational and security risk • Ensuring regulatory and organizational compliance • Maintaining quality when software is built from externally-sourced code • Managing code across the application lifecycle
paYments solutions
VocaLink VocaLink designs, builds and operates world-class payment systems and ATM Drake House switching platforms. It operates the UK national payments infrastructure, Homestead Road a national grid for payments. Last year it processed over 10 billion UK transactions: value £4.9 trillion. Rickmansworth WD3 1FX VocaLink, with its vision and proven capability, is leading the way in payments. United Kingdom It provides the infrastructure for the Faster Payments Service, which helps Tel: +44 (0) 870 165 0019 businesses and individuals realise the value and benefit of real-time payments. Email: [email protected] VocaLink is at the forefront of mobile payments, driving a new era of ultra- convenient commerce.
software version management & Development
European HQ: Perforce Software West Forest Gate The financial services sector is under constant pressure to reduce cost, Wellington Road consolidate IT systems, and search for higher margin. Perforce enterprise version Wokingham management solutions help development teams keep projects in compliance and on schedule. With Perforce, IT and the business work in concert on important Berkshire, RG40 2AT digital assets, including software code, documents, multimedia, spread sheets, Tel: +44 (0) 845 345 0116 images and more. Over 100 financial services organisations, such as NYSE Email: [email protected] Euronext, Deutsche Bank, Moody’s, and SunGard, use Perforce to develop Web: www.perforce.com compliant, secure enterprise applications.
telecoms proviDer
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t o p o f t h e t w ee t s The most tweeted Book review FStech Online (www. fstech.co.uk) stories in December/January.... Title: Cybersecurity: Mowbray has obtained), and subtle put downs Managing Systems, to the CISSP, a recognised standard in computer 1. 2014 FStech Awards: Conducting Testing, and security. shortlist announced Investigating Intrusions. The material covers an array of more basic Author Thomas J. topics, such as Linux software installation from Barclays, Nationwide Building Mowbray. Publisher: Wiley, source and packages, explanations of different Society, RBS, Lloyds Banking Group, Price: £42.50 (paperback types of anti malware measures, their Fiserv, BT and Misys are among the and e-book). Reviewed by Francis Stokes. applications and usage, network administration, companies shortlisted for the 2014 FStech Awards. See pp. 8 - 9 for The market is not short of variation when it specifying details applicable to virtual machines more details. comes to books about computer security. From when appropriate, and an intro to imaging and professional reference to casual hobbyist, installing Backtrack, a well known and trusted 2. UK banks onboard with penetration to defence, all share a common build of Linux built with security, pen testing Zapp thread. So when I came upon this book by Dr. and exploit creation in mind. By the time the Thomas Mowbray, I expected more of the same, first hints of network traffic analysis come in, HSBC, first direct, Nationwide, but what I actually got was something a little the reader is halfway in and has been well and Santander and Metro Bank are to different. Initially covering a series of antipatterns truly primed. There are sections on BASH shell offer Zapp mobile payments to 18 (the idea that for any problem, there are one or and python programming, which like many of million customers across the UK. more responses that are widespread and the sections in this book, feels a little like a light 3. M-payments: persistent, yet ineffective for purpose) the first speed crash course, only glossing important innovation, disruption, chapter’s format illustrates a problem, starting concepts in a sentence or two. For these tools consolidation usually with a catchy buzzphrase like “webify to be used effectively in any context, more than everything” and “you can’t patch dumb”, a few pages are required. The “Assignments” This year will see continued presenting the typical (inadequate) approach, section at the end of the chapter doesn’t technology and service innovation in and finally a proposed solution. I was taken encourage further reading in these areas either, the mobile payments space, aback by lack of technical depth for both the only that the user should copy out the programs according to Ovum. problem and solution, and actually felt a little parrot fashion, in a kind of code-by-numbers 4. M&A gaming? disappointed. But after reading the entire text it style. This is somewhat understandable since ansarada has an app for seemed that this book wasn’t written for me, a the text aims to cover such a range of topics, that programmer and enthusiast, but instead for but without attributing a weight of importance, someone in an enterprise/management position. it would be easy for the reader to get lost in the The world’s first M&A game app has What I perceived to be a lack of depth turned sea of the rapidly changing discussion. Common been launched by virtual dataroom out to be a careful and intentional laying of areas of exploitation are similarly glossed, with provider ansarada. foundations. The language and format used to buffer overflow and SQL injection explained side discuss these ideas in the early stages seems by side as if closely related. 5. Brits flock to deal/ incentive/review sites more an attempt at not scaring an unfamiliar The final sections deal with securing small reader away, preventing an anxiety that could and large businesses in different ways, mainly The increasing savviness of British easily occur from the introduction of such a through the education of both employees and consumers’ in finding the best deals large topic. Curiously, the “Who this book is end users, and through good practices such as generated £14 billion in sales via for” section claims to address graduates in keeping software up-to-date. If you are looking price comparison, voucher, cybersecurity and professionals already in the for a text to take you in depth with the gritty cashback, loyalty and product review field, who in my own opinion should have a aspects of buffer overflow, XXS, or SQL websites in 2013. working knowledge of most of the book’s exploitation, this may not be the book for you. content. Dr Mowbray is obviously a competent However if you are a professional in a non 6. Nedbank migrates to FLEXCUBE security professional, but is versed in the dark technical management role looking to gain the and sacred art of being able to transcribe ideas understanding needed to enhance South Africa’s Nedbank has selected to non-technical members of management. communication within an organisation, this is Oracle FLEXCUBE to modernise its Interestingly, throughout the text he laces in his the best option. If you use this book as a Rosetta infrastructure and improve operating seal of approval and support for the SANS Stone, and not a reference manual, you will efficiency and customer service institute’s GPEN certification (a qualification Dr most certainly see its value. delivery.
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