Some big themes dominate Payments today, and each is likely to endure for many years. Sibos 2015 in Singapore brought them into sharp focus – specifically: Big Data Analytics, Cyber-security, Bank & FinTech Hubs, Cryptocurrencies/Blockchain Technology, Trade Finance and APIs for Open Banking. As these themes continue into 2016, I will be blogging on each over the coming weeks, starting here with Big Data Analytics and Cyber Security.
1. Big Data Analytics
Big Data Analytics is an opportunity for Banks to leverage customer demographic and spending trends to structure value-added services, cross sell and engage customers. The use of analytics for real-time risk management system and compliance monitoring for real-time payments is also important. Real-time behavioral analytics can consolidate a variety of data associated with transactions across multiple areas such as enrollment, authentication, login, service-use, money movement, device identity, and others. In particular, behavioral biometrics technology is developing fast with significant potential to match convenience with strong authentication.
Combining robotics with analytics on customer data, allows robo-advisors to provide product recommendations or answer customers in the bank branches. Banks are using social robots to create an engaging customer experience, using multi-modal interaction for data collation – web, touch, speech, artificial intelligence etc. These social robots are likely to become a very powerful tool and a major feature in banking in the future.
On show at Sibos were products such as SizeUp which provides financial institutions with information for their small business customers to make smarter decisions through big data; Jewel Paymentech (Automated risk management platform) which helps to manage e-commerce merchant risk through predictive analytics; and Pepper (a humanoid robot from Aldebaran Softbank Group) which understands and analyzes emotions, providing both interaction with customers and assistance to sales staff.
2. Cyber Security
Cyber-security reappeared as a key concern and theme in Payments in Sibos 2015. Two years ago, cyber-crime was seen as a broader business risk rather than a specific technology issue, but banks and market infrastructures have recognized that preventing cyber-attacks is becoming impossible. The focus now is to move to more sophisticated management of the risk.
Market participants are concentrating their efforts on the development of defensive and recovery capabilities and effective governance. Although from a security perspective banks have to take a zero tolerance approach, they still need to set a cyber-risk appetite as part of the increasing digitization of their business. Cyber-risk is a common threat faced by competing organizations in the digital ecosystem, and there is a need to share intelligence, information and experience to combat cyber-risk as a community.
However, even as cyber-security has become a more open topic between banks, the technology they are investigating and adopting is discussed less openly. There are a growing number of FinTech companies in Israel, London and elsewhere specializing in cyber-security, but, for example we could find no showcases of cyber-security products or companies at Sibos 2015, other than anti-fraud products such as FICO Falcon Fraud Manager.