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Issue 15


Mr. Dimantha Seneviratne

Director/ Group Chief Executive Officer National Development Bank PLC – Sri Lanka


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EM E A | A sia | A mer ic as

Chairman and CEO Varun Sash Editor Wanda Rich email:


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I am pleased to present Issue 15 of Global Banking & Finance Review. For those of you that are reading us for the first time, welcome.

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Our cover story this issue “ Revolutionizing Banking” is an exclusive interview with Mr. Dimantha Seneviratne, Director and Group Chief Executive Officer at National Development Bank PLC-Sri Lanka. In this interview we discuss the current banking trends in Sri Lanka and his forward-thinking bank. In this edition you will also find engaging interviews with leaders from the financial community and insightful commentary from industry experts. We discuss the importance of Corporate Social Responsibility and the bank’s commitment with Mr. Phaiboun Phongsavanh, Managing Director of Phongsavanh Bank Limited. We interview N Vasantha Kumar, CEO/GM of People's Bank Sri Lanka about their award-winning Investment Banking Unit (PBIBU) and the year ahead. We strive to capture the breaking news about the world's economy, financial events, and banking game changers from prominent leaders in the industry and public viewpoints with an intention to serve a holistic outlook. We have gone that extra mile to ensure we give you the best from the world of finance. Send us your thoughts on how we can continue to improve and what you’d like to see in the future. Enjoy!

The information contained in this publication has been obtained from sources the publishers believe to be correct. The publisher wishes to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations. The purchaser or reader of this publication assumes all responsibility for the use of these materials and information. However, the publisher assumes no responsibility for errors, omissions, or contrary interpretations of the subject matter contained herein no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the publisher Correction Notification In Issue 14 pages 10,116,119 The correct title for Mr Mustafa Rawji is Deputy General Director, RAWBANK S.A.

Wanda Rich Editor


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inside... BANKING


How can banks succeed in the age of personlisation?

Barley Laing, UK Managing Director, Melissa Global Intelligence


The Three Consequences of Bank DeRisking Chloe MacEwen, Western Union ,VP of Public Policy, Europe Barbara Span, Western Union VP Public Affairs, MEA/APAC


Why banks must develop a personal approach to attract the SME market Kyle Ferguson, CEO, Fraedom


Redesigning the Banking Experience with Customer Value Management Amit Sanyal, Chief Operating Officer of the Consumer Value Solutions at Comviva


Banking on IT Security


Big data, big questions


Enumerating an overview of how the advent of digital banking has been transforming the vistas of the financial services industry


Phil Allen, VP EMEA, Ping Identity

Kerem Tomak, Divisional Head, Big Data & Advanced Analytics, Commerzbank

Saipriya Iyer


How can banks deliver on UN Sustainable Development Goals?

Simon Hill is CEO and founder at idea management firm, Wazoku


The bank of tomorrow: Taking personalisation to the next level

James Eardley, Global Director Industry Marketing, SAP Customer Experience


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BUSINESS The Evolutions – and Revolutions – Shaping Commerce in 2019


Pete Bettles, Chief Operating Officer at Global Payments UK&I


Fintech and The UK – Its boom and the talent challenges it brings Prajit Nanu, CEO & Co-Founder of InstaReM

Why Communications Compliance Is a Priority for Financial Services Firms


Richard Mill, Managing Director, Business Systems (UK) Ltd


How Strategic HR is Turning People Analytics into Business Outcomes


Brad Winsor, VP Workforce Analytics, SplashBI


Four Corporate Email Oversights That Put Your Organization at Risk Morey Haber, CTO, BeyondTrust



Purpose and Profit in Private Equity are Inextricably Linked Marc Cloosterman, CEO, VIM Group


5 Steps to Thrive in a Boom or Bust Economy John Murdock, CEO, Centage Corporation


Improving Customer Communications with Intelligent Content Management John Murdock, Jeff Mills , Vice President, EMEA, Messagepoint, Inc



Using technology to help bridge the widening financial advice gap Paul McNamara, CEO, EValue


Finance teams turn to technology to wade Brexit quagmire Richard Sampson, SVP EMEA, insightsoftware


New CX Business Models Driving Financial Services Transformation Iain Banks, Regional Vice President, International Markets


Careful spending, not high wage, helps avoid financial mess B.Z. KHASRU

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inside... INVESTMENT


Towards a new model of venture capital Levent Lezgin Kılınç Belinda Thomas, Partner and Head of Investor Relations , Triple Point



Securities lending 2.0: bringing the sharing economy to capital markets Boaz Yaari, Founder & CEO at Sharegain


Why property investment is more that just a brick and mortar Stephen Findlay, CEO and founder, BondMason



Finger on the pulse! 2019’s big biometric news so far…

Lina Andolf-Orup, Senior Director, Fingerprints


How identity management will change in 2019 to provide the ultimate protection


Mark Rodbert, CEO, idax Software


Emerging market, technology and environmental trends shaping the future of financial services

Vas Kapsalis, Director of Deep Learning and HPC Solutions, Verne Global


The Future of Financial Regulation: Machine to Machine Nikhil Sengupta, UK banking specialist, Five Degrees


It’s time for financial services to trust their tech providers Tom Holliday, Financial Services Consultant at KCOM


The Changing Face of Cloud: How to Overcome Your Data Challenges

Huw Owen, Head of EMEA & APJ at Couchbase


Is the promise of Artificial Intelligence (AI) and machine learning distracting from the technology already at our fingertips? Mark Haslam, Head of Product and Marketing at Synectics Solutions


Taking a More Human Approach to AI


The Latest Cyberattack Types – and How Financial institutions Can Stop Them

Chris Pope, VP Innovation, ServiceNow

Anthony Giandomenico, Senior Security Strategist and Office of the CTO at Fortinet


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Grasping the AI opportunity

Carmine Rimi, AI product manager, Canonical



PHONGSAVANH BANK: LEADING CSR IN LAO PDR Mr. Phaiboun Phongsavanh, Managing Director of Phongsavanh Bank Limited Global Banking & Finance Review interviewed Mr. Phaiboun Phongsavanh, Managing Director of Phongsavanh Bank Limited on the occasion of winning Best CSR Bank Lao 2018 to discuss the importance of Corporate Social Responsibility.





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René Kim Partners, Wouter Scheepens Partners, Willem Vosmer Partners A conversation with three partners of Steward Redqueen: René Kim, Wouter Scheepens and Willem Vosmer.

WHAT INTERNATIONAL FINANCE CAN LEARN FROM RETAIL BANKING AND WHY IT’S TIME FOR A MORE CUSTOMERCENTRIC APPROACH David Mitchell, Commercial Director, Futurice , Nick Haslehurst, Chief Finance and Operating Officer, Moneycorp

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Moneycorp Chief Finance and Operating Officer Nick Haslehurst and Futurice Commercial Director David Mitchell discuss some of the key lessons and insights they have gleaned through the partnership.


REVOLUTIONIZING BANKING Mr. Dimantha Seneviratne, Director and Group Chief Executive Officer at National Development Bank PLC-Sri Lanka

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Compare Prices of Hotels & Flights

EMEA 12 Issue 15


Impact and


Congratulations on your award-winning success. Please tell us more about Steward Redqueen René Kim:” Steward Redqueen is a specialised consultancy that works around the globe to advise organisations on impact and sustainability. ‘Making business work for society’ is our mission. Our head-office is based in The Netherlands and we have an office in Singapore and representative offices in Barcelona, Spain and Princeton, USA. With a team of some twenty professionals we service multinational corporations in various sectors including food & beverage, (development) finance, mining, agriculture, transport and energy. In addition, we work for governments and nonprofits. Corporations around the globe are looking to operate in harmony with their surroundings and to become sustainable; that is, to be a steward for people and planet. At the same time, corporations are competing for sound market positions. In a global economy, the combination of stewardship and competition offers dilemmas, challenges and – above all – opportunities.

We provide our clients a broader view. We deliver impact-oriented solutions that strengthen our clients’ potential for longterm value creation.” What is stewardship? Wouter Scheepens: “Stewardship is an ethic that embodies the responsible planning and management of resources. As resources become more scarce, clients more demanding, society more concerned and millennials more aspiring, stewardship offers a range of business opportunities. Yet, as it is an ethic it also challenges businesses to ask questions on what they stand for, on their license to operate and their relationship with stakeholders.” How does Steward Redqueen help companies navigate the challenges of profit and stewardship? Wouter continues: “We combine board room dialogue with thorough quantitative and qualitative analysis. ‘Sustainable development’ still sounds fuzzy and soft to many people in business. By pointing out a range of developments and showing hard numbers we hope our clients understand the upside of

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‘making business work for society’. Sustainability is not a soft, but an even harder part of business. By engaging with our clients and crunching their numbers we provide them with new perspectives on their value chain and their operating environment.” What are the opportunities available? Willem Vosmer: “Our work is extremely tailored. There is no magic bullet to most of the sustainability challenges. Becoming more sustainable, anticipating societal needs while providing new solutions to clients is a process of managing trade-offs. You need to have a sense of direction but proceed step by step. We do not promote a revolution but help clients to make credible progress.” When a company first comes to you, where do you start? Willem adds: “A question we often ask is for what result in a few years’ time they would open a bottle of champagne. We want to challenge them by envisaging a success on a ‘big audacious goal’. Next to that it is helpful to understand the personal drive of our counterparts. How do they define success as a manager? What is the kind of conversation they are having with friends and family on the relevance of their corporations? Is this all about creating financial value, or do they have a broader view on their contribution to their stakeholders?” What does the analysis stage involve? René: All our work is based on thorough research and analysis, both quantitative and qualitative. For example, we are frequently asked to conduct impact assessments that aim to quantify the socio-economic contributions of a company and its environmental footprint. We use a methodology based on input-output modelling. We have a team of analysts that are specialised in combining our client’s datasets with a range of (public) databases. The result is a clear overview of how our client’s customers,

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suppliers, governments and society at large benefit from the company’s activities. This gives relevant management information on how upstream and downstream processes can be adapted to increase the positive impacts of the company. This obviously helps to have a different conversation with stakeholders and to cement relations. How do you support companies in the implementing sustainability strategy? Wouter: “We work with small, dedicated teams of specialists who work in close cooperation with our clients to provide tailored solutions. By working closely with our clients we help them invent the solutions, not the least because this way we avoid the ‘not invented here syndrome’. Not only does the client need a sense of urgency to act, also ownership is needed to actually turn the business case into a new reality. The worst thing that could happen is that a sustainability strategy only remains a nice narrative in a report. We have a proven track-record in supporting our clients in making their business work for society.” What are some of the tools available to clients? Willem: “We are really proud on our big data and tooling work. We have developed a range of web-based management information tools that allow our clients to have real-time information on their impacts and help make better informed discussions. A well-known multinational uses our tools to compare the impact on various countries. By understanding the differences between those impacts specific interventions can be made that can help increase positive impacts, thereby solidifying the company’s local legitimacy and stakeholder relations. Along these lines, a global bank is using a tool we have developed to map sustainability risks across the portfolio. This not only improves the quality of risk management. By providing their clients with this


information and the comparison to sector averages it offers a new dimension to the client dialogue. Both the bank and their clients appreciate the added value this tool generates. Finally, for financial institutions we created an “SDG Mapping” tool that assesses how financial portfolios both positively and negatively interact with the targets supporting the Sustainable Development Goals.” Wouter adds: “We also do independent evaluations for example for impact investors or development finance institutions that want to understand the impact they have made across their portfolios. What was their ‘theory of change’, what decisions did they make, what is the quality of the governance structure, how did their interventions make a difference to selected target groups? Such research, in combination with a dialogue on board level, has proven to help boards and investment committees to focus their efforts and perform better on the environmental, social and governance dimensions.”

René Kim Partner Steward Redqueen

Willem Vosmer Partner Steward Redqueen

Why should companies Sustainable Development Goals be a priority for corporations? René says: “The SDGs have traction. Not only for governments but for many global businesses these are the ‘new normal’. This should not be regarded as a new layer of bureaucracy but as a business opportunity. Companies that fail to recognize that will become increasingly isolated. However, it makes sense to take on the SDG in a smart and business-oriented way. We can help any organization to travel that road.”

Wouter Scheepens Partner Steward Redqueen

What advice do you have for prospective clients? Willem concludes: “The advice to prospective clients is to embrace these new challenges head on. It’s worth it. You will get valuable insights on how to align your business with the needs of stakeholders, which helps reap opportunities for making a positive impact – on the bottom line and on society.”

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The Evolutions – and Revolutions – Shaping Commerce in 2019

Often in the most economically uncertain times, great innovations are born. While market volatility in the UK reigned in 2018, and is likely to continue into 2019 as Brexit decisions come to a critical turning point, the upside for the year ahead will likely be the next generation of innovations that will set the pace and direction of change for the next 10 years. Like a star athlete whose sheer talent and charisma seems to change the behavior of all the players on the other team, digital giants like Alibaba, Tencent, Apple, Google and Amazon are changing the behavior of the many industries where they choose to compete. Furthermore, they’re working to reset consumer expectations around what a great shopping experience enabled through technology needs to look like. In 2019, businesses of all sizes will need to constantly evaluate how they adapt to ever-changing consumer expectations and adopt new technologies that eliminate the lines of distinction between online and offline.

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Welcome to global commerce in 2019, where unified experiences 1 are now the absolute minimum. Mobile payments “evolution” becomes “revolution” The decline of cash usage is no secret. In the UK alone, notes and coins are set to fall to just 21% of sales by 2026 2 . While cards are a mainstay of most consumers’ purses and wallets, with debit cards set to overtake cash as the most frequently used payment method in the UK this year, mobile payments are seeing a slow and steady increase in adoption. Contactless payments such as Google Pay and Apple Pay are growing globally at a compound annual growth rate of nearly 31% 3 . This ‘tap and pay’ mentality has also meant that while mobile payments are becoming a major way in which to pay for goods and services, the contactless card remains a dominant method of payment – the most recent statistics show that in April 2017 alone, £3.9 billion was spentiv in the

UK via this method. As this simple behavior is exercised, repeated and becomes preferred, whether that’s contactless cards or mobile payments, the trend toward faster, more secure and more frictionless commerce will continue to accelerate. Chinese e-wallet models signal a tech shift for developed markets In the UK, only about 24% of consumers 5 have used a mobile wallet. In China, by contrast, the number of e-wallet users jumps to 47% percent. WeChat and Alipay have demonstrated the power that’s possible when a mobile device combines commerce and messaging functions to create a single, unified experience for consumers. This year we’ll see a stronger uptick in the adoption of alternative payment methods in developed markets like Canada, the US and the UK as the wallets from Alipay and WeChat look to expand 6 . One of the primary reasons? The rollout of Rich Communication Services (RCS) and other improved protocols to markets around the world, starting in 2019.


RCS will take texting to the next level, enabling more engaging interactions than SMS with full multimedia support. Over 50 operators 7 , 12 OEMs, Google and Microsoft currently, or will soon, support the protocol; and the rich, conversational interactions that RCS supports will drive considerable focus and investment in 2019. While there is still a question of how rapidly the market will evolve, businesses will soon have an additional platform through which to engage with customers. PSD2 making way for alternative payment methods PSD2 may have been implemented at the beginning of 2018, and while it could appear as though little change has occurred as of yet, what’s been going on in the background has the potential to drastically alter how people to choose to pay in the EU. For example, we’re already starting to see the likes of Trustly and iDeal gain momentum, defined in PSD2 as Payment Initiation Service Providers (PISPs), which allow consumers to pay using their online banking tool rather than with a credit or debit card. While in the UK cards are still typically king, as mobile wallet providers look to expand, familiarity of alternative payment methods will continue to rise, boosted by the changes that PSD2 will enable across Europe, such as Open Banking standards. Securing the European ecommerce landscape with Strong Customer Authentication Another key change coming as part of PSD2 is the requirement to carry out Strong Customer Authentication (SCA), otherwise known as twofactor authentication, on the majority of European ecommerce transactions from September 2019 onwards. This change is likely to cause substantial disruption at first, but will add significant security

to European payments, benefiting merchants and consumers alike. SCA will consist of authentication via at least two discrete elements of the following three categories: Possession (something only you own), Inherence (something only you are) and Knowledge (something only you know). Additionally, there are various situations where merchants can avail of exemptions to these requirements, avoiding the need for authentication when transactions are deemed to be low risk. 2019 will be a challenging year for businesses to get to grips with these new regulatory requirements, but at the same time, vital to ensuring they have the right solution that will balance security with a great user experience.  Unified commerce becomes table stakes Unified experiences extend well beyond supporting both online and offline commerce. Today’s consumers expect seamless experiences powered by mobile ordering, in-store pickup of online orders and using a mobile device in-store to shop, browse and learn about products. Conversely, business expectations have changed as well, driving demand for a single settlement statement across all channels, simple integrations between payment activity and financial reporting, and a common, holistic view of customer behaviours across channels. In 2019, “omni-channel” will officially become old school, and the era of what we call “unified commerce” will truly begin. Each of these changes and evolutions will require business owners to stay nimble and strive to offer shopper experiences that are unique and easy. We see 2019 as a revolutionary year for global commerce, ushering in a more unified and democratised era where businesses can reach more consumers than ever, and on their terms.

Pete Bettles Chief Operating Officer Global Payments UK&I


“Unified Commerce Platform | Global Payments.” Unified Commerce Platform | Global Payments, www.


Lyons, Kate, et al. “Revealed: Cash Eclipsed as Britain Turns to Digital Payments.” The Guardian, Guardian News and Media, 19 Feb. 2018, feb/19/peak-cash-over-uk-rise-of-debit-cards-unbankedcontactless-payments.


“451 Research's Global Unified Commerce Forecast Uncovers Dramatic Shifts In Consumer Spending Patterns.” 451 Research's Global Unified Commerce Forecast Uncovers Dramatic Shifts In Consumer Spending Patterns - 451 Research - Analyzing the Business of Enterprise IT Innovation,


“Contactless Statistics.” Contactless Payments- Key Statistics & Figures| The UK Card Association, www. statistics/.


Young, Bill. “The Rise of Digital & Mobile Wallets: 2019 Global Usage Stats.” Merchant Machine, 7 Nov. 2018,


“Alipay's Vancouver Head Office Scores Major Advances in Canada.” Business in Vancouver, 10 Jan. 2019, article/2019/01/alipays-vancouver-head-office-scoresmajor-advances-canada.

7 Sarnoff, Peter. “Verizon Will Begin Supporting New Messaging Standards in 2019.” Business Insider, Business Insider, 21 Nov. 2018,

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Fintech and The UK – Its boom and the talent challenges it brings To say fintech in the UK has boomed is an understatement. Disruptors have become unicorns and wallets are now home to bright new shiny cards. Customer expectations are being met every day and people are actually excited about financial services once again. And the recent announcements are proving that this isn’t just a fad either. The Boom The UK is now a hotbed for digital banking. FIS, in its latest survey, ‘The Performance Against Customer Expectations’, found how the UK’s appetite for digital banking amongst customers has grown “emphatically in the last year”. The same survey stated how mobile banking was also the preferred method in the UK and millennials in particular are driving this demand. 71% of all UK banking interactions are now digital or online, compared to just 6% that are performed in branches. But fintech isn’t just changing how we bank – it’s also boosting the economy. Especially the UK

economy. New research has even revealed that fintech is the fastestgrowing sector in London. According to a recent report by Robert Walters and Vacancysoft, there was a 61% increase in fintech job creation within London between 2017 and 2018. The report also found how London is now home to seven out of the world’s twenty-nine fintech unicorns and 39% of Europe’s VC funding goes towards London. The Challenge Whilst job creation is great and rapid growth of startups is something to celebrate, the fintech boom does pose a slight headache for hiring and retaining talent. The demand for tech talent is massive and there just isn’t the supply to match it. The UK Fintech Census, commissioned by the HM Treasury, found that 58% of respondents identified talent as one of their top three challenges, with coding and software skills both big areas of concern. Further research conducted by the Open University reiterates the issue stating that, 75% of fintech firms fear a skills crisis

over the next three years and 44% of them claim that finding the right talent represents a vital challenge for their business. The sector is growing fast - some might say too fast. Innovative Finance, which represents UK Fintech firms, issued a report ‘Accessing a Global Talent Pool’, the report discusses how the fintech sector will exceed 100,000 employees by 2030, creating 30,000 new jobs. Yes 30,000 new jobs are a great thing, but if you combine the existing skills shortage with the impact that Brexit might have on the UK’s ability to attract people from overseas – then there’s a real problem. The same report estimates that by 2030, the fintech workforce gap will close to 3%, costing the sector roughly £361 million. What are the solutions? Initiatives to address the skills shortage have already begun. Last year, the UK Government launched a coding school as part of its big push

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‘Making business work for society’ Consultancy boutique focused on Impact management and sustainable entrepreneurship Executing projects globally Proud to have been awarded:

----------------------------------------------------------------------------------------------Steward Redqueen: The Netherlands, Singapore, Spain, USA www. Telephone: +31 (0)23 553 0400


to bolster fintech talent. Furthermore, the government passed legislation to make coding a compulsory part of the school curriculum. The government recognises the shortfall the UK has in technical skills and through these new sanctions there’s hope that students can gain access to develop and improve their digital skills. The fintech community is also doing its part. The independent industry body, Innovate Finance, this year launched its fintech for school’s initiative. The school engagement scheme is looking to inspire the next generation of fintech leaders. Interaction On the surface, this may seem like I’m pointing out the obvious, but in a pool of limited talent, your business needs to stand out. To do this, we must create an environment that appeals to new talent, and no that doesn’t mean bean bags and table tennis. Offer things that make a real difference. Do you offer a flexible work-life balance (we do)? Is remote working an option (it is with us)? Promote the key

role that tech plays today and stress the fact that those in fintech are genuine disruptors. Accessibility is important. London alone has the highest concentration of financial institutions in the world meaning competition is huge. Omar Ali, Partner at EY recommends fintech companies should think about poaching direct from the university and college system and I can’t help but agree. Getting your brand out there will also help with recruitment drives. Network, network, network. Take part in roundtables, attend events, sponsor events, comment in the media, be content-heavy and interactive on social. Whatever it is, make people know who you are and know how to find you. Connect with the future Talent doesn’t just come to you, you must also go to it. Connecting with your future workforce isn’t something to do when you need to recruit, it’s something you do all the time.

Prajit Nanu CEO & Co-Founder InstaReM

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How can banks succeed in the age of personalisation? In the age of Amazon consumers increasingly expect personalisation from the brands they engage with. This is backed up by research from Epsilon 1 which reveals that 80 per cent of consumers are more likely to do business with a company that offers personalised experiences. With online financial institutions that rises to 89 per cent, and for those banks with a physical high street presence it’s 77 per cent, according to their study.

sets financial institutions apart. Unfortunately, many banks are still stuck in the mindset of delivering generic one size fits all communications on a new product or service. It’s this approach that modern consumers are less attracted to with their individual needs and requirements, and is the reason why a transformation in the thinking process is required if financial institutions are to grow and prosper.

Furthermore, research by Boston Consulting Group 2 highlights that over the next five years $800 billion in revenue will shift to the top 15 percent of companies who get personalisation right in financial services, retail and healthcare.

Before embarking on the personalised communications route banks need to have an up to date, clean and enriched customer database. Only then can they undertake effective analysis to make learnings from the data and deliver a single customer view (SCV). It’s this 360-degree picture that will help form the basis of their personalised communications activity and enable banks to become the source of trusted identity their customers use for all of their digital banking activities; vital if they want to grow and prosper in the increasingly competitive open banking age and successfully compete with the new entrants, be they big or small. Personalise using transactional data

Personalisation the answer for a standout customer experience In an increasingly competitive open banking world with new entrants set to join the mix in the future possibly even Amazon, Google and Apple who are already experts in using data effectively to deliver personalised customer experiences it’s vital financial institutions embrace personalisation as quickly as possible. They need to start cleverly using the latest machine learning, artificial intelligence (AI) and cloud technology to turn their customer data into actionable insight and deliver that holy grail of one-to-one personalised communication with customers at the right time – often in real time. Personalisation is particularly important in financial services, because in the highly commoditised world of banking products it’s the customer experience, driven by personalisation, that really

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The next stage is for banks to make learnings from all interactions with customers from across all touchpoints, including using data based on their purchasing behaviour. After all, financial services companies have access to a huge amount of very valuable transactional data that they can analyse and use to deliver highly personalised upsell and cross sell communications to customers. For example, if it appears a customer has booked a holiday the bank can communicate travel currency or travel

insurance offers at that individual. Also, through such communications, banks can become trusted advisors by alerting customers that they may need a credit or a savings product at the right time. Of course, taking such an analytical approach could mean banks have to shake up how they structure and manage their customer database. However, it’s vital to do this to survive and thrive in the new digital age, particularly as many new players entering the market will be offering personalised communications.   Some of the retail banks are starting to embrace personalisation, such as Bank of Ireland. Learning from the tech giants and challenger brands they have merged online and offline customer data, as well as undertaken segmentation of their data, to boost customer engagement. This has


seen them shift from product-based to issue-based marketing with their website architecture now built around life stages - highlighting what they can do to help customers during those stages. When they personalised that content they experienced in the region of a 170% to 173% increase in engagement 3 . Customer service and personalisation Also, let’s not forget that personalisation plays a key role in improving customer service, which means banks should put processes in place that identify customers when they get in touch. Such technology should learn, register and make the rest of the organisation’s systems aware, so that wherever and by whatever touchpoint a customer interacts with the bank they get the same level of service and treatment because they are pre-identified.

Financial institutions must invest in the appropriate data cleaning, analytics tools and technology that can personalise the customer experience in real-time to drive loyalty, trust and additional revenue from their customers. Those that don’t will soon find themselves losing out to the competition who will embrace personalisation, and will face the very real threat of extinction in the longer term.

Barley Laing UK Managing Director Melissa Global Intelligence


Epsilon Marketing. “The Power of Me: The Impact of Personalization on Marketing Performan...” LinkedIn SlideShare, 4 Jan. 2018,


“Profiting from Personalization.” Https://, www.


“Why Segmentation Is Critical To Bank Of Ireland's Personalization Strategy.” by Adobe: Digital Marketing Insights, Expertise and Inspiration – for and by Marketing Leaders, articles/2018/8/14/bank-of-ireland-is-changing-thenarrative-for-savers.html#gs.tNs00LFn.

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The Three

Consequences of Bank De-Risking

Ten years ago, the financial crisis damaged the financial industry and led to government action. Regulatory controls were implemented to protect the economy and reinforce the global financial system. A decade later, we can now look back and see how banks and other financial players responded, and where the regulatory controls have led us. Many of the changes have been positive, but others have had unintended consequences for both the financial services industry and its customers. One of the unexpected consequences for the global financial system has been de-risking, and it is time we address its threat to the livelihood of people around the world. According to the Global Center on Cooperative Security 1, de-risking refers to financial institutions closing the accounts of clients perceived as high risk for money laundering or terrorist financing abuse, such as money service businesses, nonprofit organizations, and correspondent banks. Put simply, de-risking is when organizations seek to limit exposure to risk by ceasing to bank entire categories of activity without regard to the actual risk represented by each individual customer – it is treating industries in a one size fits all manner. Rather than adopting steps to continue to serve clients, some banks are cherry-picking services with lower regulatory costs and higher profits. It is entirely correct that financial institutions conform with regulatory requirements. However, the actions

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some are taking to do so go far beyond anything that has been mandated by any regulator. It is in a sense a very simple and crude way of removing risk from their books and the consequences are far-reaching. This approach is not consistent with the global guidelines issued by the Financial Action Task Force and regulations issued by many countries across the world, which call for banks to take a “risk-based” approach to evaluating their customers and specifically state that banks should not remove entire categories of financial services from their portfolio. Instead, the guidelines ask banks to take a case-by-case look at the risks presented by their potential client’s customer base, and determine whether their AML program meets that risk. The first consequence is that bank de-risking undermines financial inclusion and therefore interferes with the UN sustainable development goals 2 , because global banks have been limiting correspondent banking relationships (CBRs) with local banks in emerging and developing economies. According to the Financial Stability Board 3 , there has been a reduction in the number of CBRs on the global level. With this reduction, many developing nations cannot access vital financial services, which limits their financial inclusion capabilities and interferes with their ability to engage in trade and access finance for infrastructure and community development.

Second, bank de-risking undermines anti-money laundering and combatting the financing of terrorism (AML/CFT) objectives, which, paradoxically, the toughened regulations were designed to target. According to the World Bank 4 , by pushing these transactions out of the regulated system into more opaque, informal channels, they become harder to monitor. Therefore, AML/CFT transactions are more difficult to catch. Finally, bank de-risking may increase the cost of remittances, therefore undoing the trend of lower fees and progress in recent years. According to the Center for Global Development 5 , as financial institutions withdraw from types of activities that they


Chloe MacEwen VP of Public Policy, Europe Western Union

perceive as riskier, there is an impact on cost of remittance flows because remittance service providers are forced to turn to higher cost alternatives, remittance corridors cease operating altogether because the cost of providing them is no longer economical, or money has to be shipped in cash or through other informal methods which are inherently insecure and prone to risk. At Western Union, we know the significant impact that de-risking has on many of our customers and the global economy at large. When entire categories of people or geographic regions are eliminated from a bank’s portfolio, it impacts whole communities that need to move money across borders. It pushes people away from the formal financial system, which jeopardizes their financial security. That is why Western Union has been working with governments, regulators, multilateral organizations and banks around the world to highlight the

consequences tied to de-risking. The Global Compact for Migration 6 was developed with intent for nations to act together in combatting the issue of de-risking as a means of progress towards the UN Sustainable Development Goals. It is encouraging to see the international community acknowledge the problem, but still, not enough has changed. What are governments doing to ensure that individuals around the world are able to bank? The people who suffer most are those who are financially excluded, so what is being done to prevent this? Enough reports, enough roundtables, enough discussion. Talk is cheap. It is time for meaningful and impactful change. This problem requires unity. It requires a willingness and determination from nations and banking systems around the world to work together to solve the dire consequences of de-banking. It is high time the global community takes action.

Barbara Span VP of Public Affairs, MEA/APAC Western Union


“Understanding Bank De-Risking and Its Effects on Financial Inclusion.” Global Center on Cooperative Security, 3 July 2018,


“Sustainable Development Goals .:. Sustainable Development Knowledge Platform.” United Nations, United Nations,



“De-Risking in the Financial Sector.” World Bank, www.



“Global Compact for Migration | Refugees and Migrants.” United Nations, United Nations, refugeesmigrants.

Issue 15 | 25

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BFA is growing with Angola. With 16 Corporate Centres, 10 Investment Centres and 166 Agencies across the country, it now serves more than 1,8 million Clients. With a competitive and wide range of financial services available and a commercial network that reaches almost every part of the country, BFA is growing to meet all its Clients’ needs wherever they are and wherever they need to be. For further information on how to start or strengthen your business relations with Angola, visit any BFA Agency, Corporate Centre, Investment Centre or go to


Why banks must develop a personal approach to attract the SME market

For the majority of banks, attracting the SME market is a key aim. When you consider that, according to the Federation of Small Businesses (FSB), UK SMEs had a combined annual turnover of ÂŁ2.0 trillion in 2018, which accounted for 52% of all private sector turnover, this is hardly surprising. SMEs are clearly a crucial part of the UK economy, counting for 60% of all private sector employment in the UK. However, catering to the changing needs of SMEs is something the majority of banks are struggling to do.

in 2017 completed online or via mobile, this expectation seems reasonable and will only continue to rise as younger, more digital-savvy employees take up senior roles. In order to attract such a lucrative market, banks must take steps to deliver the more personalised service and consumer-focused offering the majority of SMEs desires. So, what exactly will this look like? Understanding SMEs

As technology and expectations have evolved, so too have the needs and expectations of SMEs and banks have failed to keep up. Driven by experiences and offerings in our personal lives, these often more agile organisations are now demanding a better digital approach, as reflected by 57% of SMEs that now want to move to an online/mobile banking business environment. With 40% of all SME financial transactions

According to research by Fraedom, just 12% of UK SMEs said they thought that banks their organisation had dealt with over the past year fully understood their needs as a business. This worrying figure suggests something of a breakdown in the engagement process between banks and SMEs and positions banks as a potential barrier, rather than as an enabler of

Issue 15 | 27

EMEA BANKING agility. The lack of understanding of SME customers means that banks have failed to adjust their offering and instead remain far more geared towards big businesses. As such, the incentives offered, such as lowering costs and up-weighting rebates, that appeal to large corporates, don’t pack the same punch for SMEs. Rather, SMEs want banks to offer the same service they get from banking in their personal lives, particularly the same digital approach.

In the world of consumer banking, thanks to technological innovation, we now have seamless mobile transactions, highly responsive customer service and fast transaction times. While personal bank statements typically update in real time and can be viewed on a mobile device, reconciliation of work-based expenditures can take days, if not weeks to process. Procurement generates reams of paper invoices and purchasing orders. In contrast,

personal mobile wallets pay, log receipts and reconcile on bank statements in the blink of an eye. It is therefore unsurprising that SMEs are left frustrated by the lack of innovation offered by banks and are demanding banks provide the same level of service and personalised experience we have become so used to in our personal lives. This also extends to the ways in which banks communicate with SMEs with the 2018 FIS Performance Against Customer Expectations (PACE) report, finding that almost half the of UK SMEs prefer to contact their bank using digital methods. With the way in which we communicate in our personal lives now being heavily reliant on digital methods, it should come as little surprise that businesses now desire the same. Digital capabilities According to a Fraedom survey, 95% of commercial clients who bank digitally in their personal lives, expect to do so at work as well. Ultimately, SMEs want access to the same apps and online platforms most of us now take for granted in our personal lives. When delving deeper into what SMEs want from these platforms, Fraedom found SMEs most value real-time accessibility, access to online and mobile banking and online, fast turnaround specifically relating to problem rectification, credit applications, account balance and fee enquiries. Despite these capabilities being a top priority for SMEs, just 43% claim to currently have near real-time control over business spend. Almost a third of respondents feel they have very little visibility on a day-to-day basis and nearly a quarter confessing to having to regularly spend significant time and money investigating who spent what. Furthermore, over half of UK respondents said that on average they were personally spending more than two hours a week on expense or

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financial management tasks. This need to regularly go back and interrogate audit trails can be a further drag on a business’ efficiency, resources and productivity – particularly given that senior people are often left to do much of this administrative work themselves. Banks must, therefore, address this clear disparity between what SMEs need and what is being provided in order to give SMEs the tools needed to give SMEs the real-time view of spending they require. The role of fintechs In order to answer the demand from SMEs for a more personal, techenabled service, we will begin to an increasing number of banks partnering with fintechs. Fintechs are best placed to plug the gaps in knowledge banks have internally and provide the technology platforms their customers require. As part of this relationship, fintechs can help banks to better understand the consumerisation of business processes and technologies; the eagerness of SMEs to adopt these to achieve enhanced agility; and the frustration they feel if they sense that banks are effectively not speaking their language. For banks, these partnerships, and generally offering SMEs the levels of service they are demanding, will enable them to build lasting, more trust-based relationships with SME customers while SMEs achieve streamlined efficiencies and greater business agility.

Kyle Ferguson CEO Fraedom

Issue 15 | 29


Using technology to help bridge the widening financial advice gap An advice gap exists in the UK – and it’s leaving savers stumbling into poor financial decisions, without the right advice. The gap started in the wake of the 2013 retail distribution review (RDR) 1, which resulted in advisers making their charges transparent for consumers – and putting people with low wealth off seeking advice. The gap widened in the wake of the Pension Freedom 2 changes in 2015, which gave individuals more flexibility about taking income from their pension pots – and meant more people need advice and guidance to help guide their decisions. A pensions advice endemic Worryingly, this gap is affecting around a third of the UK population: a survey carried out by the Financial Conduct Authority (FCA) last year 3 found that there are 18.2 million people who might have a need for advice, but haven’t yet taken it. Basic financial education is lacking: 34% of workers have a workplace pension but don’t know anything about it, while 79% of adults 4 wished they’d learnt about finances at school. At the same time, the number of organisations offering financial education to employees has fallen from 41% in 2017 to 36% in 2018 5. Cost is a major contributor to the pensions gap. High fees deter people from seeking financial advice 6, while advisers refuse to speak with those that have less than quarter of a million in savings and investments. This is leaving many people abandoned, without knowing where to turn for advice – and this is where technology can play a crucial role.

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We’ve seen how sectors like retail and travel have changed the way they engage and serve customers using technology: £1 in every £5 is spent online. Four in five people book their holidays online 7 , rather than in-store or over the phone. These industries now use technology as a core part of doing business and are seeing it transform their customer journeys and supply chains. Change in financial services is less uniform. The way we make payments is radically different to how it was just five years ago. And the way payments and insurance businesses use technology is leading the charge. But many organisations in planning, longterm savings and investments are yet to embrace new consumer attitudes and advances in technology. Complex relationships with work, finances and retirement Although slow, change is happening – and the disparity between payments technology and investment technology is only natural. We have an undeniably more complex relationship with our long-term finances than with everyday transactions. From personal loans to multiple pension pots taken from multiple companies, we’re past the days of having a single final salary pension from one employer. The state – and many businesses – no longer have a paternalistic attitude towards savings provisions. Instead, they’re willing to give people the access and control to shape their own finances. 2015’s pensions freedoms 8 gave people greater access

to their pensions, while the upcoming pensions dashboard project 9 will let people manage their finances, rather than solely relying on their employer or the government. The introduction of auto-enrolment 10 has meant 10 million more people are saving towards their futures too. People aren’t just being pushed into taking more control. There’s a definite ‘pull’ going on, with more people moving away from businesses and the state for their financial security. Despite the state pension age getting later and life expectancy getting longer, millennials are planning on retiring earlier 11 . Whether it’s following the Financial Independence, Retire Early (FIRE) movement, or saving, investing and working on side projects, their financial lives are increasingly complex. With these huge changes to income streams, retirement expectations and pensions, people need financial advice and guidance more than ever. And many want more control over their finances and future too. But with basic – and workplace – education lacking, the advice gap has never been greater or more dangerous, particularly for those approaching retirement. If they make the wrong decisions, they potentially risk running out of money in retirement. New approaches using technology The combination of rising customer expectations, the growing need for advice and an influx of smart technology is creating a catalyst for much-needed change in the industry.


Paul McNamara CEO EValue

And this is where technology can make a real difference. Application programming interfaces (APIs) can make complex calculations accessible to anyone, while tools and widgets can help improve communications and set expectations for consumers. This includes digital advice and guidance platforms 12, which give precise customer advice or guidance in an efficient way, while reducing the regulatory risk for the provider. A platform that combines technology like APIs, tools and a stochastic asset model with third-party technology and automation elements can provide sophisticated and seamless advice. This combination supports endto-end digital advice and guidance processes – which in turn provides people with the confidence and

motivation to make better informed financial decisions around pensions, savings and investing. What’s more, these platforms can provide up to a 90% reduction in the time it takes for people to get savings and investment advice, without stripping out any parts of the process. That means more customers can be seen, while also receiving better quality time with advising staff. A winwin all around. I want to see more people receive better advice and, in turn, start making more informed financial decisions to help secure their futures. Technology can only help with this.


“Retail Distribution Review (RDR).” Check-in to Law-Now and Make Sure You Have All the Legal Know-How You Need for Your World.,


HM Revenue & Customs. “Pension Changes 2015.” GOV.UK, GOV.UK, 5 Apr. 2015,


Financial Reporter. “1.3m More People Taking Financial Advice in 2018: FCA.” Financial Reporter, www.


Dawson, Christine, and Christine Dawson. “Most Adults Feel They Missed out on Financial Education.” Money Marketing, 12 Nov. 2018,


Turton, Jennifer. “Employers Urged to Provide Financial Education.”, 15 Feb. 2019, pensions/2019/02/15/employers-urged-to-provide-financialeducation.


“Five Reasons People Don't Get Financial Advice and Why You Should.” The Telegraph, Telegraph Media Group, 12 Feb. 2019, investment-pensions-service/why-you-should-get-financialadvice/.

7 Habits Report 2018 011018.pdf


“Pension Freedom & Choice - The Pensions Advisory Service.” Pensions Advisory Service, www.


Pensions Dashboard,

10 Espadinha, Maria. “Auto-Enrolment Reaches 10 Million

People.”, 11 Feb. 2019, pensions/2019/02/11/auto-enrolment-reaches-10-millionpeople/.

111Leonhardt, Megan. “Millennials Want to Retire by 61, but Most Have Nothing Saved.” CNBC, CNBC, 18 July 2018, www.cnbc. com/2018/07/17/ideal-retirement-age-for-millennials.html.

12 EValue Ltd. “Our Digital Transformation Platform

Delivers Partial or Fully Automated Advice and Guidance Processes.” EValue, php.

15 | 45 31 Issue 14


Finger on the


2019’s big biometric news so far… Not sure what you’ve missed? Here’s my run-down of the big biometrics news stories that have started the year. Biometric payment cards ‘go large’ Last year saw biometric payment cards 1  go from talk to trial. Partnerships with banks, vendors and payments schemes gained traction worldwide and have continued to do so into 2019. In March, we saw the UK’s first biometric payment card trial 2  announced from Royal Bank of Scotland and NatWest. Unsurprisingly, given the nation’s love of contactless, scrapping the £30 payment cap was central to the trial of what NatWest called, “the biggest development in card technology in recent years”. Earlier in the year, we also saw the world’s first volume order of fingerprint sensors for dual-interface payment cards 3  placed by global

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digital security leader, Gemalto. The announced partnership and order represent a major milestone for the technology’s path to market, and the countdown is on as to when we’ll see the first commercial biometric card in the hands of consumers... With European banks facing PSD2’s secure customer authentication requirements, biometrics is taking centre stage as a simple solution that doesn’t compromise UX across mobile payments, banking applications and, of course, on card. Not just for payments… While the first volume deployment of biometric cards will be in payments, the applications of the technology are much more diverse. Just last month, our partner FEITAN announced 4  its new ‘all-inone’ card 5  that can be used for identification, physical access control, and authentication to access

data and applications. This is a secure, convenient and cost-effective solution for enterprise business and payments markets. An interesting use of our technology, and just one possibility of this exciting new form factor! Ready to rock and enroll! Defining the process of registering fingerprints onto cards is a crucial element in getting biometric smartcards to consumers. In fact, 83% of issuing banks we interviewed cited enrollment as the most important thing to get right. With this in mind, we set out with UX design specialists BlockZero to define a straightforward and secure solution that we launched earlier this year. Our ‘out of the box’ enrollment 6 provides an easy, secure (and dare I say ‘fun’!) way to register your biometric data! See what we mean on our YouTube channel.

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Another important announcement was the launch of our new software platform for payments. The complete software solution has been designed in harmony with our hardware to deliver enhanced biometric performance for payments and can be used across a range of form factors: from payment cards and wearables to USB dongles. Biometrics and bendy phones in Barcelona Of course, MWC Barcelona, the biggest mobile event in the world, was a key highlight of the first quarter. From ID authentication to wearable payments, biometrics was a major talking point. Even the delegate passes were biometrics-secured for a smooth and quick entrance! 5G was a focus point, showcased through synchronized live concerts and remote surgeries. 5G will also enable the future of connected homes, automotive and smart cities. For many of these use cases biometrics will play a vital role as the most convenient way to secure identification and verification.

We also (finally!) saw some real innovation to the smartphone – and the biometrics that secure it! Alongside the mind-bending foldable phone 7, we also saw our optical indisplay (or ‘under glass’) fingerprint sensor make its debut. This is one smartphone innovation we really expect to take off: offering more design freedom and the ability to ‘touch’ and authenticate on a broader area. Consumers are the key to everything In the same way that biometrics has transformed the mobile space, it’s rapidly taking hold of the payments world and beyond. In an age of increasingly connected, more seamless solutions across industries, security and the consumer experience sit at the heart of everything. Biometrics offers the perfect balance of trust with convenience that will be key to keeping up in this new age and will see the technology continue to thrive in smartphones, but also in applications far beyond. It’d be naïve to look too far ahead, but we can be sure that if the rest of the year continues with the same pace as the first quarter, the biometrics industry will certainly be kept busy!

Lina Andolf-Orup Senior Director Fingerprints


Fingerprints. “From Talk to Trial: What Is a Biometric Smartcard?” Fingerprints, from-talk-to-trial-what-is-a-biometric-smartcard/?utm_ source=iseepr &utm_campaign=Q1_roundup.


Collinson, Patrick. “NatWest Trials Fingerprint Debit Cards to Remove £30 Limit.” The Guardian, Guardian News and Media, 11 Mar. 2019, natwest-trials-fingerprint-debit-cards-to-remove-30-limit.


Fingerprints. “Fingerprint Cards AB (Publ) Signs Partnership with Gemalto and Secures the World's First Volume Order of Fingerprint Sensors for Dual-Interface Payment Cards.” Fingerprints, fingerprint-cards-ab-publ-signs-partnership-withgemalto-and-secures-the-worlds-first-volume-order-offingerprint-sensors-for-dual-interface-payment-cards/?utm_ source=iseepr&utm_campaign=Q1_roundup.


“FEITIAN Technologies Launches Advanced Technology Power Cards.” PRWeb, 6 Mar. 2019, releases/feitian_technologies_launches_advanced_ technology_power_cards/prweb16149361.htm.


Fingerprints. “Biometrics by Fingerprints in New ‘ALLIN-ONE’ Card by Feitian.” Fingerprints, www.fingerprints. com/2019/03/07/biometrics-by-fingerprints-in-new-all-inone-card-by-feitian/?utm_source=iseepr&utm_campaign=Q1_ roundup.


Fingerprints. “Fingerprints Launches 'Out of the Box' Enrollment Demo for Biometric Payment Cards.” Fingerprints,


Black, Marie. “Best Foldable Phones Coming In 2019.” Tech Advisor, 15 Apr. 2019, mobile-phone/foldable-phones-3692547/.

Issue 15 | 35



a new model of venture capital The Venture Capital Trust (VCT) investment landscape has undergone significant change over the past few years driven by legislation which is focusing on VCT investing providing growth capital to start-ups. Despite the fundamental changes made to the investment landscape, VCTs have never been so popular among investors. Driven in part by caps introduced to annual and lifetime pension saving allowances, last years’ VCT fund-raising season raised £745m, the highest amount for over ten years, according to HM Revenue & Customs, while early indications suggest that VCTs are set for another strong year of activity. The first of the structural changes made to VCT investing was from the 2015 Finance Bill, which brought UK VCT rules in line with EU state aid regulations by restricting the types of companies that were eligible for VCT investment. Since then, VCTs have no longer been able to support management buy-outs (MBOs) or acquisitions, and investments have been directed towards growth capital for companies that have been trading for less than seven years.  Subsequent legislation from the UK in late 2017, known as the Patient Capital Review (PCR) further reinforced the emphasis on growth companies. The principles-based test that was introduced, meant asset backed business no longer qualified for VCT investment, while growth capital for eligible businesses was capped at £5m. A separate category, known as ‘knowledge-intensive’ businesses, those that spend at

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least 15% of their operating costs on research & development (R&D) or innovation in one of three years, was also created and companies that fulfilled this criteria were eligible for up to £10m of funding. The deployment of this capital is another striking change that managers have had to manage as VCTs are now required to invest funds raised more quickly than before: 80% of cash held by VCTs now needs to be invested within one year of fundraising, up from 70%. This has compounded the requirement for VCT managers to identify potential investee companies far quicker than in the past, and execute on these transactions. As a result, VCT managers have had to adapt their strategies to mitigate the inherent and increased risk involved in investing in less established companies and a number of new investment approaches to overcome the far-reaching structural changes to the investment landscape are now starting to emerge. One that is proving particularly successful is the challenge-led approach.

established revenue stream at the point of investment. It also mitigates some of the risks to investors of investing in earlier stage companies through VCTs as a way to continue to provide impressive returns for investors, while at the same time providing greater support for those start–ups that have a genuine chance of success.

The basic premise of challenge-led investing is to use as the starting point a significant challenge or issue that has been identified by an established corporate or blue chip company. SMEs with innovative new products and services that can provide the required solution are then sought out. This approach enhances the potential for the success in early stage investment by ensuring market validation and, as a result, an

The challenge-led approach focuses on larger businesses that have already identified a business issue, but which lack the in-house expertise to solve it. Rather than simply looking to innovative start-ups that may have simply developed an innovative product or solution, VCT funds deploying the challenge-led approach seek start-ups that have identified a market requirement in the first instance, and then developed a solution to solve that issue.


This means that a market fit has already been established, as has a clear need for the product or service the business offers. In addition, by solving the problems of larger corporates in this way the start-up already has a sustainable business model, which is compatible with an investor’s long-term goals - both the investee company, and the investor benefit. For start-ups, this challengeled approach offers a real prospect of future success through working with a significantly larger corporate partner. For investors it helps to mitigate much of the risk associated with investing in early stage businesses and start-ups.  At Triple Point, we are already championing the challenge-led VCT philosophy, having launched our Venture Fund. Drawing on the specialist skills and experience of

all its members, the Triple Point Network has developed a strategy which proactively helps early stage businesses increase their chances of success. With close ties to over 100 large corporates, the Venture Fund uses the issues faced by large businesses as its starting point, and then invests in the innovative young company that is able to provide the solution. This helps the start-up to further refine the product / solution and hopefully penetrate additional markets that could benefit. By focusing on early-stage businesses, which have established a market fit for their products and services with large corporates, the Fund addresses one of the most significant risks of early stage venture capital and can enhance investors’ chance of securing a robust return on their investments.

Belinda Thomas Partner and Head of Investor Relations Triple Point

Issue 15 | 37


Redesigning the Banking Experience with Customer Value Management

Banks are equally bad everywhere. A bank customer in US or UK faces the same set of challenges faced by a bank customer in India or Mexico. In a 2017 survey, carried out by the Financial Brand, it was found that most banks do not have a formal customer experience plan in place. In terms of key drivers of customer experience, technology ranked 5th and channel ranked 9th, below branch personnel which was placed 4th. The importance given to branch banking over technology and channels in an increasingly digital world can only be put down to misplaced priorities in the banking sector. Banks have a strong reservoir of trust, to be sure, but they seem to be losing ground, with PayPal and Amazon nearly as high as banks in recent study by Bain & Company. Just as intriguing is the increasing willingness of the respondents in India, Mexico, US and UK to run their finances through a fin-tech firm according to the study. Should banks worry? They do appear to be vulnerable to fin-tech companies providing better customer value propositions with data enabled offerings. Compared to the rapid pace of innovation in other industries, banking foray into the digital sphere can be best described as rudimentary. In a way we can say that the digital revolution in banking has just begun, with banks offering mobile apps

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and high quality websites to their customers, allowing customers the ability to open an account, checking their account balances, and making payments However, all said and done, all these changes are perfunctory, barely skimming the surface considering the wealth of data and customer goodwill at the disposal of the bank. For a long time, the banking industry was resistant to change, as it was in a comfortable position, with a captive market, little or no competition, robust customer relationships and no pressure to change. Now, new competitors are flooding the industry, with digital only agile models, driving rapid innovations in product and service, leaving banks struggling to regain their loyalty as well as market share. The customer’s attitude towards banking has also changed, adding insult to injury. They are comparing their banking experience to other disrupted industries (Netflix, Amazon) and finding banks falling short of their expectations. In fact it would be fair to say, that even today, after many years of digitization, bank customers are still waiting for that new banking experience, touted as revolutionary and transformational, with customer centricity at the heart of everything. Therefore, the biggest question that banks have to address today is what

is next after digital banking? This comes from the realization that they have to dive much, much deeper than their perfunctory digital offerings allow, in-order to first understand and then serve their customers. Ideally Retail- analytics should have transformed banking by now but it has not. However, the rise of fin-tech and the digital customer have renewed focus on big data, AI, Machine Learning. Here, it is worth mentioning that banks have laid down stringent requirements for account opening, which makes the customer database more robust than the customer database maintained by telecom companies. This data can be used to create a better customer profile, helping banks to segment customers and provide individualized engagement to each of them. Banking CVM – The next step after digital Banking Customer Value Management (CVM) help banks to understand their customer and fulfill their needs with contextualized offerings that are mapped to customer personas. CVM uses customer data to drive sentiment analysis, 360 degree customer profiling, customer segmentation, next best offers, and channel management. Social media platform are great sources of feedback for improvement opportunities, and banks should know


Issue 15 | 39



Call Center

+373 22 268 999


how to leverage this information. In this regard, advances in the field of Natural Language Processing, machine learning, text analytics are helping banks to uncover customer sentiments from structured as well as unstructured data, allowing them to address customer issues quickly.



Shift to personalized banking

Banks have much to gain by gaining a 360 degree understanding of their customer, as it gives them the actionable insights for fine tuning marketing campaigns, improving customer’s engagement with the product, predicting customer behaviour and stopping churn before it is too late.

Increasing loyalty

According to Financial Brand, Analytics is the CX initiative that is most challenging for brands. It further goes on to say that most bank marketers are using the same outdated data sources and marketing methodologies they have used for decades, which is only alienating their customers further. In this light bank needs CVM to utilize data at the same level of sophistication of digital disruptors like Netflix or Amazon to drive higher customer engagement and revenues.

Similarly, customer segmentation allows banks to provide a higher level of personalization, assess customer’s pricing sensitivity, and build relationship with their valuable customers. For example, banks can used card usage data to design personalized loyalty programs, where customers are offered cash back offers according to their card usage. Similarly, banks can optimize their revenues by testing customers across multiple pricing points, and applying the one that is most optimized. Pricing segmentation also allows banks to give preferential treatment to their most valuable customers. Next best offers (NBO) provide banks with an opportunity to re-engage with their customers and provide a cross sell or upsell opportunity. It helps to increase loyalty by providing relevant offers in a timely manner. NBO helps the bank in identifying products or services customers are most likely to purchase next allowing its marketing managers to run campaigns like Amazon’s “you may like to buy next”. Finally, CVM keeps track of customer journey, helping in the understanding of channel effectiveness, driving more relevant content, and optimizing conversions.

Banking CVM provides a shift from mass marketing to n=1 marketing, where services are tailored according to user personas.

CVM provides valuable insights on customer’s lifestyle by analyzing transactional data. This information can be used to design loyalty programs with vertical partners that reflect customer lifestyles. By allowing the customer to indulge in activities and content of their choice, the bank improves customer loyalty. New revenue through cross sell and upsell opportunities Similarly, it will help the bank to realize new revenue streams through up-sell and cross sell opportunities based on customer segmentation, Next best offers. Identifying the right channel In today’s omni-channel world, the customer is leaving his footprint on multiple channels like mobile, social media, web, chat, branch and so on. Big data analytics analyzes customer journey in order to understand where the sale is taking place in order to make the conversion funnel better and improve marketing effectiveness by driving the right content on the right channel. Allows banks to plan for the long haul Customer segmentation allow banks to take a long term business view by targeting customer segments, like students, who are likely to evolve into a profitable segment in the long run.

Amit Sanyal Chief Operating Officer of the Consumer Value Solutions Comviva

Amit Sanyal is the Chief Operating Officer of the Consumer Value Solutions at Comviva, a business focused on Customer Value & Life-cycle Management solutions in the telecom space. A marketer at heart and with over 11 years of work experience in the telecom and internet service provider spaces, Amit has also worked with various industry leaders such as Bharti Airtel and Sify Technologies in a multitude of marketing functions across the Usage and Revenue/Retention and Value Added Services domains. A PGDM (Marketing & Finance) holder from TAPMI, Manipal, Amit graduated from the University of Delhi with an Honours degree in Economics.

Issue 15 | 41


Banking on IT Security In January, Santander, one of the big five high streets banks, announced that it would be closing 140 branches in the UK. The reasoning was lack of demand and the move supports data from the Office for National Statistics (ONS) which shows that nearly 6,000 local branches have shut since 2010, a fall of around a third. The decline in high street banking is moving in lock step with a wider switch to ecommerce and away from in-store retail that has led to lower footfall in town centres. However, the death of the high street bank heralds a wider trend across financial services which is embracing internet-based alternatives within an increasingly cashless society. The UK is not alone in this shift. In Germany, Deutsche Bank, the country’s largest bank, has been working through a two year project to close down or merge 188 of its 723 branches. In France, long a bastion of high street retail banking, Société Générale announced plans to close 20 per cent of branches by 2020. Yet the decline of the high street bank is not a signal that demand for financial services is waning. The data suggests otherwise as highlighted by a 2017 survey by The Telegraph, a UK national newspaper, which found that 97% of the UK population has at least one financial product such as a current account or savings account – a rise from around 91% in 2001 according to data from CSR Europe, a monitor of Corporate Social Responsibility. In fact, the number and variety of financial institutions has

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flourished in the UK as new entrants such as retailers have entered the market over the last decade alongside the growth of easier mechanisms for switching products that have been mandated in law. Yet the biggest shake up has been around internet and mobile banking. According to the Office of National Statistics, 10 years ago, around 1 in 3 people used online banking which by the end of 2018 had risen to 7 out of 10 and still growing. The Telegraph survey also highlights that 50% of new products and services are applied for online (38%) or on mobile (12%). The enabler for this trend has been three-fold. Firstly, the ubiquity of broadband connectivity has made online banking easier for consumers and therefore, banks have invested heavily in internet and mobile ready platforms. The familiarisation with technology and especially smartphone apps has also helped to streamline the process. The last major element has been improved security leading to more consumer confidence and trust. Although several consumer sentiment surveys during the 2000s registered fear over cyber criminals breaching internet banking platforms, the reality has seen few breaches of online banking systems. The overwhelming majority of the £300 million of annual fraud experienced by UK consumers is through stolen card details or phishing emails and calls that trick customers into giving personal details to fraudsters.

The main mechanism now adopted by all the major banks to secure access to online banking is based around multi-factor authentication systems that require two or more independent credentials before gaining access: what the user knows (password), what the user has (such as a smartphone or separate card reader) and what the user is (biometric verification). This reduces the risk of unauthorised people gaining access to online bank accounts and carrying out illicit transactions. However, the growth of online banking is likely to accelerate even further over the next few years as banks and others including retailers start to transition towards open banking as prompted by the EU-led second Payment Services Directive (PSD2). PSD2 is aimed at providing more consumer choice around how they share their financial information with the aim of instigating more competition in the market. Although PSD2 has come into law, implementation is way behind schedule across the EU27 – with the UK slightly ahead of the game but still not yet widely implemented. Yet with more choice and freedom, there is still the issue of encouraging consumers to exercise their rights and making the process easier. From a security standpoint, the industry needs to ramp up education to help consumers adopt safer practices to reduce fraud through fake phone calls and spoofed emails. Technical controls also need to be more widely


agreed upon. Although PSD2 has several security requirements, there needs to be more common agreement around how all online services are secured to create a cultural mindset that sets a minimum-security level which applies to every online account or consumer interaction. Once this criteria is established, it will allow more services to be moved online, and we are already seeing some of these innovations filtering through to the market through new paperless mortgage applications and mobile based account aggregation services.

The financial services sector is starting this process and industry groups such Open Banking UK, which includes nine major banks in the UK, offer a template for the rest of Europe to emulate. But as non-banks start to become more ingrained in core financial services, the notion that security must be baked into every service from design to delivery will ensure that the closure of high street retail outlets is not a negative outcome but the herald of a better long-term future for consumers and the financial services industry.

Phil Allen VP EMEA Ping Identity

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How identity management will change in 2019 to provide the ultimate protection It seems that the peak of data breaches is upon us, with a different story hitting the headlines everyday – although I’ve been saying that every year since 2015. When imagining where the threat is coming from, most people picture a hooded hacker in a dark room, or a state-sponsored covert operation. As a consequence, most organisations are focussing their defence on implementing solutions to prevent intruders from getting in, relying heavily on solutions such as firewalls or antivirus protection. But what about the people who are already in and pose a threat to the internal security of the organisation? Internal threats taking a turn for the worse It turns out that the real threat lies a lot closer to home, with sixty six percent of organisations considering malicious insider attacks or accidental breaches more likely than external attacks. Whether they are the result of bad actors attempting to sell on sensitive company data, collusion or unwitting accomplices using a work laptop on Starbucks wifi, most breaches are simply a matter of access and opportunity. Ultimately the outcome is the same, whether the intent is malicious or not. But, if we can identify who has access to what data and applications, and which of these are out of the ordinary, maybe there is a way to prevent internal threats after all.

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Clearly, external threat is still a priority for businesses and it’s no surprise with many well-known enterprise businesses like T-Mobile, Facebook and Google all facing damaging external cyber breaches last year. Yet this should not distract companies from the internal threat, which can be just as damaging - a reported ninety percent of organisations feeling vulnerable to insider threat, and the majority of employees have access to data they shouldn’t. However, an insider threat becomes an external threat when compromised access is used by unscrupulous attackers. By tightening up internal security vigilance, controls and access processes, external hackers will find it harder to break through and entice staff with a phishing email.

employees at the front of the fight. This requires building tools not just for the IT security department available and but targeted at the whole organisation.

Access management on the front lines

The next phase, which is becoming increasingly widespread among organisations, is steering away from having just the security team deal with all things security and are instead putting line managers in charge of access rights. Currently, this often involves the line manager having to deal with a highly complicated, confusing spreadsheet of access details, with no context or explanation about what in the list refers to what data, and what files are required for a role.

So, what can businesses do to start building their cyber defence to insider threat? Unfortunately, the answer is not as easy as simply implementing a new security system or process. Companies need to recognise the need for a cultural shift and change in attitude, to the point where everybody in the organisation understands that cyber security is their responsibility. In order to change the culture around protecting assets, organisations need to make everyone from the CEO to the person on the door feel responsible, involved, and empowered, putting

However, we are discussing a transformational change which won’t take place overnight, but over a significant period so that each individual comes to recognise the part they play. The first phase of this is access management being the job of specific security teams. The issue here is that employees feel as though security is a job for the security or IT team and has nothing to do with them.

Moreover, the risk with reviewing access to assets is asymmetric. If access to something that an employee does need is taken away, there is a very


high chance of a small issue. However, if somebody keeps access to something they shouldn’t have, there is a very small chance of a huge breach. Human beings need help comparing these risks. In the long run - the eventual third phase of this shift - companies can look to become part of the security revolution that will see everyone in a company self-certificating their own access rights, with oversight and ultimate approval from line managers. With an engaging, end-user- friendly UI, employees are encouraged to take responsibility of their own actions and aim to be as secure as possible.

2019 is looking like it may be the year for organisations to finally take a step back - or in fact step up - and analyse their own internal security measures. Internal threat is and always has been overlooked as a significant cyber threat. Why wait any longer to crack down on your internal security? By implementing a software to manage access rights, employers can start their journey to change company culture towards security immediately.

Mark Rodbert CEO idax Software

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Finance teams turn to technology to wade Brexit quagmire You cannot get away from Brexit. The lack of clarity and melodrama in Westminster is the perfect storm for uncertainty. Businesses are now attempting to find a way through the mess, using technology to help them make certain decisions given the lack of direction coming from the House of Commons. What next? At the time of writing, the UK has agreed to an extension until 31st October, with a review of progress scheduled in June. This throws more uncertainty into the air, considering Theresa May’s cross-party talks are yet to bear any fruit. While the extension leads to a greater period of uncertainty, it does mean businesses have a little bit more time to plan for multiple scenarios. There’s a lot to take into consideration, for example currency fluctuations. As it stands, a weak pound is more of a certainty for the markets. The pound is down 20 percent since the original referendum result in June 2016. Despite it steadying since the meaningful vote held on 29 March (because the markets predicted a failure), investors do not want to be on the wrong side of a currency rebound, which means a weak pound is the “new normal” for businesses to plan for. Technology steps up Quickly investing in the right technology that can compute all potential Brexit variables – and quickly – is the right way forward to ensure every business is prepared for the new 31st October deadline. There are many moving parts that businesses are having to consider as the Brexit saga plays out. Predicting the future can be difficult, which is why technology is instrumental in predicting specific outcomes, for example, what would happen if we end up with a no-deal.

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These moving parts amount to, for example, reviewing suppliers, updating supply chains, stock piling, re-evaluating margins as a result of changes to potential EU preferential rates, and reviewing possible changes to credit ratings. Interestingly, stock piling is causing an increase in the HS Markit’s Purchasing Managers Index, which rose to 55.1 in March, the highest since February 2018.

The amount of data that needs analysing across various systems of record can be huge when planning for, for example, a nodeal Brexit. However, time-intensive data extraction is not possible anymore; manually compiled static Excel spreadsheets that lead to human errors make certain data untrustworthy for making reliable decisions.

Therefore, it is no secret that UK companies are already acting on advice from their predictive scenarios, limiting the impact that any version of Brexit will have on their businesses. Based on conversations with customers, those simulations chiefly revolve around inventory planning, currency movements, and any potential changes to credit ratings. Overall, this amounts to calculating 50-100 what-if scenarios a week using technology, and that changes daily depending on activity in the House of Commons.

At this stage, if a finance team wanted to implement a traditional reporting system to tackle this challenge, it would be fraught with problems. They would need to hire programmers and allow for huge implementation times to get everything working. Therefore, the only way for a finance team to remain agile in an uncertain world is to create calculations and predictions from live data with automated, flexible ERP reporting to satisfy stakeholders, customers, and shareholders quickly.

A new view of reporting during periods of uncertainty

A department of strategy and management

Shareholders, regulators, and other business stakeholders want a Brexit strategy, especially if the business in question has a complicated supply chain involving the EU. This puts increased pressure on finance teams to deliver the right data analysis for making sound business decisions.

With the creation of Brexit-led predictive reports a “must,” the finance team becomes heavily involved in business strategy. ERP reporting systems are able to elevate the finance department to a department of strategic analysis, rather than the “folks who do the

numbers.” By freeing up time that was previously spent compiling data, finance teams now have more capacity to focus on analysing and interpreting that data. Now more than ever, as the Brexit process continues, CFOs and their teams are making ground-breaking decisions, helping to shape a company’s Brexit strategy and its future role in the UK. An internal review of existing reporting methods is the priority to get them to this level, as the only way forward hinges on agility and doing things quickly.

Richard Sampson SVP EMEA insightsoftware

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Big data, big questions Widespread industry digitalisation means that banks are not only custodians of wealth, but of data too. How can they dovetail the storing and interpretation of this data with improvements to the client experience? Kerem Tomak, Divisional Head, Big Data & Advanced Analytics, Commerzbank discusses the industry’s progress so far Like any large corporate, a bank has access to enormous swathes of data. But data collection and, indeed, storage is only one part of the puzzle. To better understand their clients and ultimately improve their banking experience, financial institutions must find ways to analyse this data more effectively – and find meaning in the otherwise unintelligible.

more than 100 petabytes of data exist worldwide; in five-to-10 years, this will be considered “small”. The meaning of “data” has also fundamentally changed over the same period. It isn’t only ones and zeros arranged in rows and columns but other data sources including video and audio files. Even what (or who) can generate data is changing. For instance, today’s smartphone user is a constant data generator: digital interactions, such as SMS messaging, emails and tweets, create enormous batches of unstructured data.

This presents a challenge for banks: either we keep up with the exponential growth of data or risk being left behind. The scale of the task at hand is clear when we consider that 90% of all data in existence has been created So, how are banks rising to the in the past two years. 1 Equally, this challenge of harnessing big data? By applying modern analytical techniques is an unprecedented opportunity for learning and advancement. Therefore, to their digitalised infrastructure, the sooner that banks leverage its banks are building crucial data wealth of data in more creative ways, insights, which can, in turn, inform the better outcomes this will create how banks can better support for the end-client. individual clients – whether that be by detecting fraudulent transactions, Putting data to work reducing their exposure or by suggesting new modes of working. So, how can banks begin to make sense of their data and put it to Changing definitions work? This process, we believe, is part science and part art. Big data First, though, what does “big data” storage solutions are firstly required mean? At a basic level, it refers to gather the data. A modern example to data sets that are too large is Hadoop: a purpose-built solution or complex for traditional dataprocessing software to deal with. Yet, designed to collate various data types en masse, which helps to improve the volume, variety and velocity of the speed at which users can access, data included within this definition manipulate and clean data. has evolved considerably over the past 30 years: back then, 30 megabytes, or the equivalent today, of three minutes of high-quality video footage, would have been considered “big”, yet, today, the average smartphone in 2019 can easily store this amount of data 1,000 times over. To put this into perspective, today

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Then comes the art. Here, what’s important is knowing how to use the data. Banks can build algorithms that can interpret datasets in order to glean insights. In a way, the “art” is akin to making the data tell you the story that otherwise meaningless

streams of data cannot. This will help banks to interpret scenarios facing their clients in a new way − eventually allowing them to spot fraudulent activity, reduce risk and suggest new products. In fact, by using this model, Commerzbank has already found success – connecting approximately 70 different data systems with scope for future additions. Big questions A challenge for big data will likely be awareness. While we may not realise it, the application of big data analytics is already commonplace, and drives many of our online interactions. Each time we search online, we create data, leaving a digital footprint that companies can use to tailor advertisement choices and goods specifically to us – as well as to curate a deeper understanding of their customers’ needs. For the financial sector, the goal is no different. Better understanding clients’ pain points is fast becoming a prerequisite for success. At Commerzbank, we recently developed a data-based loan solution for the manufacturing sector. Known as a “pay-per-use loan”, it calculates the repayment schedule based on machine usage. When machine usage is low, repayments are also low. But if there is an uptick in production – which will likely mean a rise in turnover – the repayment rate increases. This data-driven approach allows the client to better manage its liquidity, and match income to outgoings. Big future Banks need not tackle big data alone and should, instead, leverage existing solutions to meet client demands. Certainly, fintechs can


allow the banking sector to rapidly react to industry changes – in part a result of their nimble solutions and commoditised access to faster computer power. Also, many solutions have already been developed by third-party providers. The next logical step for banks, therefore, is to leverage existing solutions to meet client demands. Digitalisation shows no signs of slowing down. Against this backdrop big data represents a big opportunity for the financial sector. The biggest challenge going forward will be to continue asking: “how can new technologies make a bank work better for everybody?” Only then can banks remain at the cutting edge.

Kerem Tomak Divisional Head, Big Data & Advanced Analytics Commerzbank 1 how-much-data-do-we-create-every-day-the-mind-blowingstats-everyone-should-read/#18f1981160ba

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Why Communications Compliance Is a Priority for Financial Services Firms In an industry where compliance and regulatory scrutiny is ever more of a factor, finance companies need a smart, forward-looking approach to stay in control, says Richard Mill Ultimately, a financial services brand success depends on reputation and public trust, which are put into question every time a new industry scandal emerges – such as a rogue trading incident or PPI-level product mis-selling. There will be other scandals too – and the financial services industry needs to protect itself to not just limit the risk of such events taking place, which are hugely costly but also to remain on the right side of the regulators. Financial organisations must keep peerless records of all dealings and communications. But as well as being comprehensive and robust, these must be easy to access – and, in the case of voice recordings specifically of trader conversations, easy to replay in the event of an audit or investigation. But this can be a difficult technical challenge. Over time, city organisations have amassed multiple call recording solutions to capture calls, each with its own particular call capture protocol, leaving them with disconnected silos of data, usually as a result of merger and acquisition activity or organic growth. These are critical for providing indisputable evidence of agreements and advice given, and ensuring regulatory compliance. But these systems are only a help if a specific interchange can be easily isolated and played back. And that’s where financial service providers are being tripped up, particularly as they try to consolidate and modernise their call recording systems.

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What’s more, financial service providers now live and trade in an era which has seen communication trails broaden to encompass web, email, SMS, Skype/VoIP and WhatsApp. Financial services organisations must be able to manage all of these channels from a compliance perspective – and be able to track the conversational journey that may start out on email, progress to the phone, and span at least two further communication channels. As these channels expand and the volume of data increases, organisations need flexible and scalable solutions to manage this. This presents financial services companies with a substantial and expensive issue, especially where controls are imposed on the market and financial organisations must adhere to regulations, such as MiFID II, KYC, which demand that compliance teams are able to produce records at short notice (Dodd Frank specifies within 72 hours). The records involved could potentially be years old. If you note that for an annuity record, organisations need to keep data on the customer for their lifetime and beyond – records will inevitably span generations of call recording technology. But technology moves on, suppliers go out of business or get acquired, and formats go in and out of favour – all of which poses a huge issue for organisations if they are faced with managing legacy recording systems which are no longer being unsupported. Meanwhile how does a financial services provider address challenges that could arise over mis-selling or compliance? The organisation

will need to be able to defend its position. The harder it is to find calls quickly, the greater the chance of hefty customer pay-outs and of being penalised and exposed for non-compliance: this is a serious organisational risk. So it’s very much in a finance company’s interest, to ensure that its systems are futureproofed and able to facilitate timely call data retrieval when needed. A scalable, reliable company memory bank Technology vendors also have a reprehensible habit of producing software that has proprietary elements so as to promote vendor lock-in. As a result, financial services organisations must protect themselves by taking the appropriate steps to ensure that their data is always compatible with alternate and dissimilar systems. Not to put this check in place would be highly if not grossly negligent. Preventative measures are far more cost-effective than corrective action and the sooner these measures are taken the better. Let’s consider a real life user case: a major US Investment Bank realised it was exposed by having multiple sites, each with its own individual call recording system


– and to make matters worse, these individual systems were of various models, various ages, and various release versions. That meant the customer had zero ability to provide any form of federated compliance control. Without such control, each individual location applied its own rules and without knowing which specific recordings needed to be retained and which didn’t, everything was kept ‘just to be on the safe side’. This in turn meant the bank faced the collective risk of having huge volumes of data residing on legacy systems, with the added issue of also spending considerable sums supporting expensive and unnecessary technology. In this case the bank’s first idea was to use the supplying vendor’s own tool kit to address these issues, but this didn’t solve the problem because the data lay across multiple product versions which weren’t uniformly compatible. The good news is that the bank then adopted and applied a federating policy resulting in an extremely successful project – after the successful consolidation of its recordings and meta data, it was able to purge over 40% of its calls bringing about the additional benefits of lowering risk and reducing costs.

What does a smart federated approach look like? Just as modern content management platforms exist that allow companies to search and access a whole spectrum of seemingly incompatible documents, there are solutions that can extract and manage data from a diverse range of capture and storage solutions, and yes, from multiple vendors, wherever it resides and present it in one single central management portal. Such a single central management portal provides your legal team with the ability to self-serve, eliminating a lot of the heavy lifting that IT was previously having to do, plus enabling you to be more proactive with data, with multiple departments easily extracting voice recordings so that data can be analysed for trade reconstruction. Voice recordings (on multiple systems, across multiple locations) that fall outside of retention periods can also be identified and deleted driving huge savings and eliminating risk. Adopting such an approach helps you avoid any need for having expensive auditing teams locked away for weeks on end, sifting through monotonous call recordings to extract the relevant interactions. So a central, vendor

neutral portal that can draw recording data from any number of systems, from multiple vendors or locations, whether these are legacy, live, cloudbased or on premise that offers a single point from which authorised users can view, manage, replay, store, extract and run reports makes good business – and compliance – sense.

Richard Mill Managing Director Business Systems (UK) Ltd

Business Systems (UK) Ltd is a specialist in providing call recording and workforce optimisation solutions for investment banks, city trading floors and insurance companies

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Securities lending 2.0: bringing the sharing economy to capital markets

2018 blew winds of change across global markets. Much of the ten years prior could be characterised by smooth and stable growth in asset prices. 2018 by comparison, was a tempestuous year, as volatility re-affirmed itself and global equity indices fell. In the main, the re-emergence of volatility was met with concern. Many asset managers and investment banks including HSBC 1 and BNP Paribas 2 , highlighted market volatility at the end of ‘18 as a key driver for diminishing returns. Some analysts even heralded that 2019 will see the beginning of the next global recession, following the rough seas in Q4 2018. However, asset owners participating in securities lending will have a different perspective on 2018, as last year brought surges in revenue which surpassed $10bn 3 , the highest annual figure since 2008. In the last decade, capital markets have battled with the challenge of regaining trust, whilst complying with vast swathes of new regulation. The securities lending industry has suffered more than most during this battle. Whilst market capitalisation of global equities has trebled since its 2008 trough, the value of securities on-loan is still well below its 2007 highs, representing a ‘real’ shrinkage in the size of the industry. So why has the securities lending industry failed to keep pace with the rest of the market? What wider lessons can be taken from this and does this spike in revenue signal the beginning of a new era in the industry?

Let’s start with where the house of cards tumbled in ’08. Prior to ’08, securities lending grew exponentially, and the industry opted to increase hiring as opposed to looking for automation to meet this growing demand. Less automation meant higher operational risk. Furthermore, a significant amount of risk was created by an optional secondary activity known as cashcollateral reinvestment. As a result of this activity, and the investments that were made on the back of it, liquidity and financial risk for institutions rose to a level that ultimately threatened wider financial stability. As the saying goes however, once bitten, twice shy. Following ‘08, the securities lending industry has responded strongly to the risks created by cash-collateral reinvestment. Firstly, and particularly in Europe, most transactions now operate using a non-cash collateral system. This, of course, removes any cash-collateral reinvestment optionality and also has the potential to simplify securities lending for beneficial owners. In addition, post-trade hubs, such as Pirum Systems have emerged and contributed to the removal of former operational risks, by creating an industry standard automated solution and taking securities lending post-trade processes away from Excel spreadsheets and manual input – thereby reducing margins for human error.

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So, if the industry appears to have corrected its shortcomings, why has securities lending remained a backwater of capital markets? Ultimately, we believe that where the securities lending industry has failed is on user experience. Most beneficial owners still view securities lending as too complex, too opaque and not investor friendly. Incumbents have spent the last 10 years automating back-office processes and playing catch up with regulatory change, focusing largely on complying with MiFID (I and II), Basel III and a raft of other reporting and regulatory requirements. Don’t get me wrong, automation of back-office and other manual processes is important, and participants in the industry are no doubt grateful for the reduction in manually-intensive tasks, but ultimately this won’t grow the pie, this will only slow its subsidence. For securities lending to prosper, the industry must recognise its place and then play to its strengths. For most investors and asset managers, securities lending will never be their primary investment objective and hence they would not want to manage it as a line of business. It can, however, become a secondaryinvestment objective if extracting additional value from a portfolio can be done with minimal risk and in a simple and transparent manner. In that respect, user-experience is not just a fancy dashboard with buttons and dials. Rather, it is the ability

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to deliver a simple solution which most investors can ‘set and forget’, retaining full control, transparency and the peace of mind that it won’t come back to bite them. Put yourself in the shoes of an asset manager who hears about securities lending and wants to start generating those additional returns. Firstly, what they really want to understand is, what’s in it for me? How much money can I make from securities lending? Unfortunately, for most beneficial owners, they may never truly understand what their portfolio is really worth. Securities lending is an OTC, relationship-based and opaque ecosystem that is supported largely by systems that were designed 15-20 years ago. There is little transparency for beneficial owners on what the market price is or its underlying dynamics. Often, beneficial owners settle for a blanket offer of a few basis points across their portfolio – oblivious to its hidden gems and whether they’re getting a fair deal. If you, as an asset manager, are willing to sacrifice and compromise on understanding your upside, you would still need to understand a host of jargon and complications. What’s the difference between an SLAA, GMSLA and a CoMMA? Am I safer if my lending is done under a CCP model, full transfer of title or pledge structure? Bilateral vs triparty? All of this ultimately means you cannot fully decipher the risk-reward of securities lending.

If you choose to invest the time and resources into evaluating the different models and discover the ‘right route to market’ for you, thereafter, begins the long and thankless onboarding process, which can discourage even the bravest and most tenacious investors. In the end, like many other beneficial owners, due to lack of resources or time, you would decide to shy away from the industry, dismissing the additional revenues and the alpha creation altogether. So, what’s next for securities lending? Whilst the last ten years were burdened by a tunnel-vision focus on complying with regulation and automating back-office processes, we believe there is still hope for this industry. By shifting focus towards a relentless pursuit for client-centric user-experience, securities lending could become an opportunity which all investors can benefit from. At the forefront of this pursuit must be greater transparency. SFTR, Securities


Financing Transactions Regulation, (coming into effect in 2020) certainly has the potential to act as a catalyst for this. Furthermore, inspiration in this pursuit can be drawn from the democratisation in other areas of capital markets including equities, derivatives and FX. In these areas’ transparency, availability, and ease of use have enabled many new participants to engage, which in turn has increased volumes and liquidity as a whole. We should also remind ourselves, that notionally every owner of stocks, bonds, and ETFs has the right to lend them and globally there are over $40tn of securities sitting idle, collecting dust instead of collecting income. They belong mainly to private

investors, through their banks and online brokers, as well as small and medium asset managers, wealth managers, and robo-advisors that are underserved or completely shutout of the existing securities lending industry. By combining robust processes with client-centric user-experience, these beneficial owners could access this industry and its benefits, just like the big financial institutions have been doing for decades. Capturing this opportunity is essential for securities lending to flourish and keep pace with, or even front-run, the wider market.

Boaz Yaari Founder & CEO Sharegain


Keown, Callum. “HSBC Profits Fall Short on Fourth Quarter Market Madness.” City A.M., 19 Feb. 2019, www.cityam. com/273453/hsbc-profits-fall-short-fourth-quarter-marketmadness-hits.

2, Bloomberg, articles/2019-02-06/bnp-lowers-targets-cuts-deeper-asderivative-loss-jolts-trading.


“Securities Finance 2018 Year in Review.” IHS Markit, 25 Jan. 2019,

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Emerging market, technology and environmental trends shaping the future of financial services Today’s financial firms rely heavily on data and technology in all aspects of their business. In areas like derivatives pricing, risk analytics, quantitative modelling, portfolio optimisation and even bank stresstesting, having an optimised highperformance computing (HPC) strategy is critical to everyday operations. Indeed, by performing highly complex calculations on large data sets in order to simulate potential outcomes and gather valuable intelligence and insights, HPC has long been the engine of financial forecasting. Looking ahead, however, there are a number of emerging market and technology trends that will shape the future use of HPC grid computing in finance and, by consequence, the competitive futures of many in the sector. First, the battle in the arena of low latency is coming to an end and, by consequence, the cost and means of trading is changing. Today, there are techniques that deliver diminishing returns relative to the expense. At the same time, the entire concept of exchanges providing preferential market access has been overruled under MiFID II. Designed to strengthen investor protection and improve the functioning of financial markets – making them more efficient, resilient and transparent – this new legislative framework also mandates that companies show

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best execution on exchanges for all clients. With the framework now just over a year old, there’s no doubt that it will lead to increased scrutiny on exchanges as time goes on. This will also help drive investment strategy in a new direction. To unleash a new wave of competitive advantage by leveraging insight, innovative firms will need to invest more in quantitative analysis techniques such as Monte Carlo simulation (used to calculate the impact of risk and uncertainty in financial management and other forecasting models) as well as exploring the use of new applications like machine and deep-learning. Interestingly, this investment will also go a long way towards achieving compliance with environmental and sustainability mandates. For one, following the EU’s adoption of the UN 2030 Agenda and Sustainable Development Goals – encapsulated in Directive (EU)2016/2341 -- there are disclosure obligations on how institutional investors and asset managers integrate environmental, social and governance factors into their risk processes. For financial firms, the accurate reporting of these factors will now be considered a key part of their duties towards investors and beneficiaries, with HPC grid computing playing an important role in delivering the data insight required to demonstrate compliance.


On the flipside of this, however, financial firms will need to mindful of their data centre and cloud setup. This is because HPC modelling and simulation applications, and all other machine learning techniques, are extremely power hungry, which can push up energy costs expotentially and result in expanding carbon footprints. The intensive energy use of these systems is unlikely to escape the gaze of environmental regulators and national tax authorities alike. As such, to take fulll advantage of the opportunities offered by new developments in machine and deep learning – and do so without compromising their environmental credentials -- financial services organisations need platforms that can rapidly scale to cope with surplus compute demand and do so sustainably. In particular, they need an infrastructure that can handle extreme workloads yet is also easy to manage. It’s worth noting here that hyperscale cloud computing providers -- like Microsoft Azure, Google Cloud Project and Amazon Web Services --– can suffer legitimate performance and scalabilty issues when it comes to compute intensive workloads. Indeed, though popular and good for non-core compute, like HR and email, these clouds are based on virtualised servers and not optimised to support advanced HPC workloads in the long-term. Unfortunately, returning to the inhouse server model also won’t work -- not only can it be prohibitively expensive to host power intensive grid computing applications and others, it can also be costly to cool them sufficiently. This is a concern for those operating in high power cost environments like the UK or

mainland Europe. For those reliant on data centres or servers in the Britain, the aim to close coal-fired power stations by 2025 coupled with the recent failure of plans for nuclear power will not only invariably put more pressure on the existing grid, but could also negatively impact pricing too. At the same time, another challenge is the requirement for additional personnel to maintain the backend infrastructure, when qualified talent is in increasing short supply. Ultimately, when it comes to selecting the right type of data centre and cloud platform, financial services firms should be looking for technology partners who can help them deliver on their own objectives and mixed requirements. For forwardthinking firms, one opportunity is to look for compute infrastructure providers which can support these workloads using renewable energy. By choosing platforms that are powered by 100 per cent renewable energy, not only can financial services organisations gain a competitive advantage by embracing new technology and moving with the times, but also achieve their corporate social responsibility goals.

Vas Kapsalis Director of Deep Learning and HPC Solutions Verne Global

Issue 15 | 57


The Future of Financial Regulation:

Machine to Machine The rise of big tech: setting new expectations The fundamentals of what businesses and individuals perceive as banking have evolved from a traditional high street model to a complex ecosystem of financial and technology providers - all working in collaboration with one another.   The emergence of technology companies has provided access to a greater diversity of products and services - highly customisable and delivered at speed to the end-user. These technology companies, some with banking experience and those with no previous track record, have altered the way in which customers now expect services.   Indeed, our research conducted by Censuswide of 2,000 UK banking customers shows that 4 in 10 Brits (43 per cent) expect to be able to set up their bank account instantly. However, under half of traditional and challenger

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banks are only provisioning for an instant set up. Instant customer expectations are a challenge but also an opportunity for traditional banks. Across the world, banks and financial institutions are attempting to align with these new customer demands by innovating new products and services to stay ahead of their competitors.        Navigating regulatory challenges: ensuring regulation keeps up with the speed of innovation   Digital technologies are accelerating the time it takes financial institutions to launch products and services to the market. However, before banks jump straight into innovating, it’s essential that they remain compliant and there is a growing need in the industry for regulation to keep up with the speed of innovation.    Gone are the days where selfregulation was enough to keep

things on an even keel, with many traditional banks still reeling from the crisis of almost a decade ago. Navigating regulatory challenges requires a robust digitalfirst strategy, operational and infrastructure change, a clear focus on assessing and managing risks, and meticulous execution. Currently, manual regulatory processes are not enough to align with the speed of product development. For compliance to be ensured, organisations must deploy technologies to oversee the technology which is being created. The future of regulation is machineto-machine.      Harnessing RegTech to stay compliant   Companies are already starting to deploy machine learning, AI, and NLP to enhance risk management and compliance processes. Machine learning is helping to improve


Nikhil Sengupta UK banking specialist Five Degrees

traditional control testing activities, while AI can enhance the effectiveness of monitoring and surveillance tools to identify potential breaches in policy or market abuse. NLP can also help with the supervision of political, economic and market activity; spotting signs of trouble ahead.   However, existing legacy systems within traditional banks and financial institutions are prohibiting the roll out of new regulatory technologies, also known as RegTech. Banks may spend months innovating new products and services only to find out that they are not compliant at the end of the process – wasting time and money. Machines operate on rules and algorithms but when combined with manual processes the result is fragmented data and siloed activity that can reduce the effectiveness of remaining compliant.    For banks to survive, they must champion a switch to digital: the digitisation of their IT architecture

to enable them to integrate the necessary regulatory solutions. Banks can then innovate in the peace of mind that their products and solutions will be compliant and ready for launch to market. If in doubt, ask for help   At the same time, as a way of supporting the navigation of regulatory challenges for banks and FinTechs in the UK, the FCA has created an ‘Innovation Hub:’ a regulatory framework to assist with the authorisation of new and existing ventures. By using the FCA ‘Innovation Hub,’ companies can achieve authorisation, supporting them with applications for authorisation or a variation of permission.    In addition, the FCA is also helping banking and finance entrepreneurs mitigate regulatory issues with its UK ‘sandbox:’ a controlled, safe environment where entrepreneurs can test out new innovations.  

The FCA investigates the technology behind companies and helps them trial their solutions to customers. The ‘sandbox’ is reducing the time it takes for entrepreneurs to get their business to market and innovators are able to attract customers while testing. Alongside this, the FCA is helping firms to roll out cross border solutions to enable them to scale their companies effectively.   It’s clear that for banks to keep ahead of customer demand they must innovate to survive, but at the same time they must take a belt and braces approach to stay compliant.  Banks and financial institutions must fully digitise their processes to deploy the necessary RegTech seamlessly into their systems, while proactively involving the support of regulatory authorities, such as the FCA, to navigate and prepare for regulatory challenges.       

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It’s time for financial services to trust their tech providers The financial services industry has found itself unprepared for the technology revolution that has seen a new breed of challengers emerge – from online-only banks to apps that enable users to trade stocks and shares on their mobile device. As they race to catch up, however, these traditional firms are finding that their progress is being prevented by their legacy technology infrastructure. The sector’s slowness in adopting new technologies has seriously damaged financial firms’ ability to meet their customers’ needs, as a recent Forrester study 1 shows.   Forrester found that 84% of UK financial service organisations are concerned about their ability to identify customers correctly, while a third believe they are ‘seriously lagging behind competitors’ when it comes to fraud checks. Meanwhile, the researchers found that UK firms have less interest in adopting new approaches to authenticate customer identity, lagging behind China, Singapore and the US.   It’s not all bad news, though. In autumn 2018 KCOM conducted in-depth research among senior decision makers at businesses in a number of sectors, including financial services, to gauge their progress towards cloud migration. We found that 80% of respondents from financial services businesses say they plan to invest in cloud migration in next 12 months to drive innovation – the highest of any sector studied.   The cloud is central to any significant business transformation project and enables financial services companies to throw off the shackles of legacy technology. But cloud migration is always a serious undertaking, and particularly so for financial services businesses.   A poorly-planned and executed cloud migration may simply achieve the continuation of a flawed system. This year we saw the huge risks of a failed migration, with a traditional bank suffering severe reputational damage. When a big technology project goes wrong in a large financial services business, it tends to make the front page. Just

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look at the reams of negative publicity that TSB garnered when the bank ran into problems updating its IT infrastructure. Do bank customers face a year of more of uncertainty and disruption, while challengers steam ahead with their superior tech agility and ability?   No industry takes its customers’ security more seriously than financial services, and our research suggests that respondents are fully aware of the potential risks of cloud migration. When choosing a technology partner, they were most likely to use selection criteria that are heavily weighted towards partners that they can trust, as measured through their delivery on previous projects.   Almost two in five respondents (38%) from financial services businesses use this criterion – more than those who choose a partner based on their ability to deliver against a defined technology road map (34%), and those that use agile methodologies, frameworks and contracts that enable the delivery team to work through the unknowns (28%).   This is understandable. Trust is especially vital in the financial services industry, as we’ve seen. Yet is such caution always the best way to develop systems and infrastructure that will support a financial services business’ success in the years to come? If financial services providers truly trust their technology partners, shouldn’t they be more open to accepting their advice on innovation and cloud

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migration projects, rather than expecting them merely to follow the strict instructions in the proposal? Our research suggests that this remains a Rubicon that the financial sector is still unwilling to cross. We found that only 10% of respondents expect their partners to introduce ideas and help drive innovation, compared to 36% who identify the required technology first and then issue an RFP.   While financial services was a little ahead of other industries in being open to ideas from their technology partners, this 10% figure is hardly evidence of a “pioneer spirit”. Given the pressure from challenger banks, we would expect the industry to be more open to listening to technology experts.   We fully accept why financial services firms would approach digital transformation projects, including cloud migration, with caution – but can they afford to spurn the advice of their technology partners? For example, a trusted partner might advise that financial services businesses would do better to focus on cloud-native

innovation and a more measured, gradual migration to cloud, rather than doing it in a “big bang”. We don’t believe that the go-it-alone approach works for financial services businesses. Earlier this year, for example, we found that only 6 per cent of UK financial businesses know when all their infrastructure components will reach their end-of-life-date.   True partnership involves listening on both sides – it’s the best way of avoiding major misunderstandings, while also opening up the full gamut of possibilities that the cloud can provide. As the financial services industry looks forward to 2019 and beyond, we hope that it will be more open to collaborating with their technology partners and taking advantage of their expertise – and so more effectively meet the challenge from their younger, more-agile rivals.

Tom Holliday Financial Services Consultant KCOM


“UK Financial Services Lagging behind Global Rivals in Digital | GBG Forrester Study.” GBG Global Website, www.gbgplc. com/newsroom/forrester/.

Issue 15 | 63


What international finance can learn from retail banking and why it’s time for a more customer-centric approach UK-based Moneycorp is a global specialist in currency exchange, hedging and international payments, handling a huge volume of transactions for a wide variety of corporate, institutional and individual customers in over 190 currencies. Digital engineering and innovation consultancy Futurice has worked with Moneycorp since 2016 to design and build a new customer-centric online platform and service experience. In the following interview, Moneycorp Chief Finance and Operating Officer Nick Haslehurst and Futurice Commercial Director David Mitchell discuss some of the key lessons and insights they have gleaned through the partnership. Can you explain what brought Moneycorp and Futurice together? Nick Haslehurst: With financial services becoming increasingly tech-focused, Moneycorp saw an opportunity to bring retail banking-style customer centricity to currency exchange and international payments. As a result, the company partnered with Futurice to co-create a best-in-class international payment platform for private and corporate customers.

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David Mitchell: Initially, Futurice’s role focused on the technological transformation of Moneycorp’s digital platform. However, as the partnership grew, we took a deeper role, helping Moneycorp develop a more agile culture and getting employees prepared for digital transformation. Why is ‘retail banking-style customer centricity’ important? Nick Haslehurst: Firstly, because International Banking and Foreign Exchange is not a joined up service that customers can acquire, regulation, currency restrictions and the lack of communication across payments networks, make accessing these services hard for companies and consumers. Secondly, because customer demands are rising rapidly in step with the growth of connectivity, companies can expect to experience constant pressure to reinvent themselves as the digitalfirst economy matures. What were the key challenges in achieving your goals? Nick Haslehurst: There were external and internal challenges. Externally, Moneycorp needed to navigate the complex, interconnected mix of regulatory environments and financial systems in building the platform. This challenge was exacerbated by the fact that the international banking system is highly-fragmented and communicates poorly across borders. At the same time, the company also needed to recognise that there was a widening gap between the customer experience of domestic banking and international financial services. Internally, the challenges centred around evolving culture to futureproof the firm.

in weeks and months not quarters and years. Moneycorp’s new-found ability to introduce features and products on a monthly basis is a world away from where it was a few years ago.

customer behaviour. If, for example, the company sees customers hovering over an area of the website for longer than normal, we can investigate whether the terminology there is not as slick or as clear as it should be.

How has Futurice contributed to this? David Mitchell: A key theme of this partnership has involved Futurice being embedded in Moneycorp’s activities, rather than being a siloed and outsourced vendor. This has resulted in Moneycorp adopting aspects of our culture, becoming less corporate and more flexible in its mindset. One example is that Moneycorp has listened to what Futurice has to say about using ‘playbooks’ to re-evaluate standard operating procedures. A characteristic of successful playbooks is a tendency to invert the traditional hierarchical approach to decision making, giving people on the front line permission to make decisions. The rationale is that frontline employees are usually closest to the action and have the information to make the right decisions. Was it easy to meld the two company cultures? David Mitchell: There were clashes that we had to work through – on everything from dress code and hours in the office to remote working. The key thing we learned is that you need to address all of this upfront – how do we communicate and what is non-negotiable? This can’t happen by accident. Nick Haslehurst: We had people with 10-20 years’ experience in financial markets having their outlook challenged by people from a very different background. In the end that was what made the partnership so strong, but you have got to set the right environment in advance.

Can you expand on the point about Moneycorp’s culture?

Can you give specific examples of how Moneycorp has changed?

Nick Haslehurst: As a 40-year-old company, Moneycorp has a deep understanding and experience of technology, but needed to marry that with a more agile culture, that worked

Nick Haslehurst: For a start, the shift towards a continuous data feedback loop means Moneycorp can respond quickly to what our analytics are telling us about online

Similarly, the new platform is much easier to adapt and customise to the different languages, regulations and customs we encounter in our various geographies. Other innovations have included a new online registration system, launched mid-2017, which doubled conversion rate from 40 per cent to 80 per cent. Working together, we also created an internal UI component library to support a white labelling solution and reduce launch time in new territories from six months to just one or two. The beauty of the new collaborative approach is that existing and potential customers experience an intuitive, easy to navigate, fast, bespoke platform. They don’t see all of the backroom ‘plumbing’ that joins up the highly fragmented international banking network and makes moving money across borders as easy as moving money domestically. What about changes to the way Moneycorp innovates? David Mitchell: To evolve Moneycorp’s product launch strategy, Futurice helped roll out an iterative release process, something the consultancy advocates strongly to best in class companies across several sectors. In simple terms, this is about prioritising speed to market over perfection. Perfecting products or services takes enormous amounts of time and doesn’t always suit a competitive and rapidly changing environment. By focusing on speedy iteration, Moneycorp was able to generate real data with an MVP (a minimum viable product) in the first few months. What technological challenges did you encounter? David Mitchell: Managing the complexity of a large existing IT

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From left to right: David Mitchell, Commercial Director, Futurice , Nick Haslehurst, Chief Finance and Operating Officer, Moneycorp

landscape is always a challenge. A big part of that is not underestimating the size and depth of certain parts and allowing enough time for development in case of unknowns. Integrating new technologies with existing legacy systems isn’t an easy task either. However, working closely with the Moneycorp development team made the integration much smoother, and that’s a lesson other can take away regarding co-operation. What technological tools did you deploy? David Mitchell: For the user-facing front-end we built a new architecture from the ground up using technologies like React, Redux, Styled Components and Typescript. The redesigned user journeys were co-created by Futurice designers and Moneycorp’s product team. The designers also mainly use Sketch and InVision to prototype and test new user interfaces and

journeys. InVision, especially, can be integrated into the workflow of a front-end developer as it provides exact Stylesheet information that can be used in the codebase. React Storybook serves as an interactive component library and bridges design and development. How important was it to use the latest in modern web tech? David Mitchell: It was vital for various reasons. Firstly, there is the community aspect: getting help from people in the open source community when you need to find a solution for a specific coding problem is much easier with modern and popular frameworks like React. Secondly, it helps with attracting talent. Using the latest tech attracts developers to join your project or company more easily. Thirdly, it helps with writing robust and secure code (critical in a field like financial services). Using TypeScript

allowed us to build software with confidence as small bugs were spotted much more easily and earlier in the development workflow. What is your advice to other companies planning transformation? Nick Haslehurst: You’ve got to ensure the entire organisation is ready for transformation, not just the IT department. This is a business change, so the organisation from senior level down needs to be immersed in the actual project. There needs to be a high level of engagement with the business owners – they need a chance to input, be involved and signoff. And you have to ensure that the client’s regulatory and compliance teams are fully engaged early on in the product development conversation. Only they understand the regulations in enough detail to stop developers disappearing down rabbit holes.

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Why property investment

is more than just brick and mortar

The global economy is in slowdown, with financial markets bearish and volatile. Flat interest rates, slower consumer spending, the global impact of US/China trade war and, in the UK, uncertainty around Brexit have created a challenging environment for private investors in Britain.

In our digital world of virtual money, real estate is a tangible asset that appeals to both active and passive investors. It is something that can be seen and worked on but requires little attention from investors. Owning shares is less visible and more-often-than-not requires investors not to take any action.

With tighter tax regulations on landlords and on-going Brexit uncertainty, there have been some doom and gloom predictions about the future of the UK property market.

Both commercial and residential property have an important role to play in investment portfolios, offering diversification, low correlation with other asset classes and crucially with each other, and can provide a source of regular income. 

However, research commissioned by Experience Invest shows that, as an investment asset, real estate continues to be hugely popular with investors. During times like these, when there is nervousness around the market but demand for income remains high, residential property investment can be still be regarded as a cornerstone of a well-diversified investment portfolio. Why? •

Property prices are not directly correlated to the stock market.

UK property values have historically remained resilient during periods of economic downturn.

Property is well positioned to provide long-term investors in particular with the diversification and income they need.

Financial innovation Direct property investment requires significant financial commitment and is more illiquid than the stock market. However, there are innovative ways for investors to earn a passive income from property without physically owning it. Private investors who take a closer look will find a thriving sector that is constantly bringing innovative products to market. Listed funds and trusts •

Commercial property funds

One area where Brexit is having a negative impact is on commercial property funds. In the commercial property market, liquidity concerns raise the prospect of investors being prevented from withdrawing money from openended property funds, with several blocking redemptions in the wake of the EU referendum two years ago.

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In 2016, after the UK voted to leave the EU, a raft of funds were forced to stop trading, while others applied a range of mechanisms to effectively deliver exit penalties ranging from 5% to 17%. As the Brexit date moves closer some property funds are seeing increased outflows, which the FCA is closely monitoring. It is worth noting that the majority of these withdrawals are from commercial property funds. Limiting withdrawals in volatile times is generally good news for long-term investors.

being closed-ended, which means fund managers do not have to sell the investments during tough times, and this is particularly suitable for investing in less liquid asset classes such as property. •

Commercial property, such as retail, office blocks and warehouses, can demand higher yields than those available from the residential market. That said, there are associated risks such as the fact that commercial property can stand empty for longer than residential, in between tenants. •

Residential property funds

Residential property isn’t subject to the pressure that areas of the commercial property sector are under. While liquidity risk is a fact of life for property investors, since properties can take a long time to sell, the simple fact that the residential market is a larger and more active market, makes it less of a concern for residential property investments. The nature of residential property transactions supports the market’s liquidity, with a high number of relatively modest purchases by owneroccupiers, as opposed to the higher value, lower volume institutional sales in the commercial sector.  •


First introduced in the UK in 2007, Real Estate Investment Trusts (REITs) are companies that invest in properties, the shares of which can easily be traded on the stock exchange. They are exempt from corporation or capital gains tax, making them an attractive choice. REITs benefit from

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Social housing REIT: Investors can now put their money into social housing through an ever-growing number of REITs operating in what seems likely to be an area of significant expansion. Not only is this good news for those unable to afford or even find somewhere to live, it is also good news for institutions looking for a long-term return at an attractive rate, something that has all but disappeared through conventional investment instruments because of the low interest rate environment. Build to rent REIT: the PRS REIT (LSE: PRSR), which is particularly noteworthy because of its strategy of investing in newly constructed build-to-rent homes. Investing in newlybuilt private rented housing allows PRS to acquire new properties at a slight discount to the potential sale price on completion via forward funding of new developments. As such, PRS is expected to earn a higher net initial yield when compared to purchasing existing housing stock. On the downside, however, operational risks may sometimes be greater due to potential construction problems and dilapidations, which could affect both rents and resale values.

Over the past two years, there have been a number of new UK residential real estate investment trusts (REITs) listing on the London Stock Exchange. These investment vehicles offer a quick and easy route to investing in residential property and enable shareholders to spread the risk across multiple investment properties.

Correlated versus uncorrelated Traditional listed funds typically follow the broader market movements regardless of the underlying asset values. Financial innovation is delivering more options for investors looking for alternatives, such as Unlisted Funds. Unlisted funds were traditionally available for institutional investors only, but recent innovation of financial products and following MiFID II, the adviser market has been more receptive to these funds and more individual investors have been able to participate. As unlisted funds are not traded on an exchange, their price is not subject to daily price volatility, and they trade at a value closely linked to their net asset value (NAV). Investments in unlisted funds are generally illiquid, and many have ‘lockin’ periods. However, recent innovation has seen unlisted funds offer weekly trade points – an improvement from the traditional quarterly or semi-annual liquidity cycle. The FCA’s recent consultation on the rules governing funds that invest in assets with little underlying liquidity, reflects the increasing demand for these products. Crowd-funded Real Estate Crowd-funded Real Estate Special Purpose Vehicles (SPVs) allow investors to select individual properties to invest in. Whilst the selection allows more control, the pipeline of investments is not guaranteed or necessarily suitable for the investor’s objectives, so it takes time to create a portfolio. Pricing is linked to NAV, but such SPVs are not readily saleable securities. Where liquidation is possible, the proceeds can be lower than market value, and trading fees can be significant. We expect growth in this area from many buy-to-let investors exiting their directly held portfolios and moving into structured and intermediated products.


Servicing of Credit Loans | Real Estate Management Advisory & Solutions | BPO | Edifício Q51 D. Sebastião | Rua Quinta do Quinta, 6, Quinta da Fonte | 2770-203 Paço de Arcos | Tel: +351 213 596 000



Property-backed lending Property-backed lending provides an opportunity to earn a passive income from property, with the potential for attractive risk-adjusted returns. Property loan investments range from buy-to-let through to wide ranging property development – such as building hundreds of homes on a greenfield site.  When choosing which property loans to invest in, investors should ensure they understand the nature and scope of the underlying project – for instance whether it needs planning permission. Keep an eye on the loan-to-value ratio and pay particular attention to the valuation – is it independent, conducted by a professional surveyor adhering to red-book processes, and does it stack up with local property sales. Closing thoughts Despite a recent spike in property fund outflows, property remains one of a relatively few consistent positive performers for investors over recent years.  Investors who take a holistic view, with longer-term investment goals in mind, are less likely to be spooked into selling their holdings because of a bout of short-term market volatility or uncertainty. Some allocation to property remains a sensible investment choice within a well-diversified investment portfolio, offering attractive yields relative to cash and fixed income. Depending on the investment structure, property can offer useful diversification, and with its negative correlation to other investment assets, it can help mitigate the effects of volatility of other asset classes. Anyone who has invested in property, in whatever form, is likely to have seen healthy returns, a fact which should not be pushed aside by recent instability. As with most investment decisions, investors should remain focused on their longterm goals when investing in property or any other asset class.

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Stephen Findlay CEO and founder BondMason

Stephen Findlay is the CEO and founder of BondMason (, the 5-star Defaqto rated investment specialists in property-backed lending.

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N Vasantha Kumar, CEO/GM, People's Bank Sri Lanka

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Mr. Winyou Chaiyawan Chief Executive Officer The Thai Credit Retail Bank Public Company Limited


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Asia Mr. Dimantha Seneviratne Director/ Group Chief Executive Officer National Development Bank PLC – Sri Lanka

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Revolutionizing Banking Last year, we interviewed Mr. Dimantha Seneviratne, Director and Group Chief Executive Officer at National Development Bank PLC (NDB Bank) about the bank’s customer focused approach and their continued commitment to development in Sri Lanka. In 2019 we have caught up with him again. In this interview, we asked him about what’s new, both in Sri Lanka banking trends, product creation and his forward-thinking bank

At NDB, we had two consecutive years of substantial growth in 2017 and 2018. However, 2019 is most likely going to be an election year in Sri Lanka and we expect moderate growth in GDP and economic activities. In this context, NDB will maintain a cautious growth approach whilst concentrating on improving internal systems and processes. We also plan to invest on a new IT platform, all of which will pave way, and support more aggressive growth in the coming years.

What are the current challenges and opportunities you see facing the banking sector in Sri Lanka?

On the other hand, the changing customer demographics is an opportunity just as much as it is a challenge. There is a growing inclination in customers towards faster banking transactions, smoother solutions and less paperwork. The rise of digital technology in the industry well complements this opportunity where innovative digital solutions are increasingly used to deploy speedier and more efficient services. NDB will fortify its focus on digital technology to offer our customers an enhanced experience.

The Sri Lankan banking sector is an almost LKR 12 Tr [c. USD 67 Bn] industry with 26 licensed commercial banks providing more or less homogenous services. The industry also has a further seven licensed specialized banks, catering to a total population of just over 21 Mn. As such, there is strong competition amongst peers with a continuous challenge for each player in preserving and increasing market share and maintaining healthy business growth.

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How important are the digital channels (SMS, Online, Mobile) to bank operations and customers? The importance of digital channels cannot be stressed more. Digital channels have opened up enormous opportunities for banks in revolutionizing their offerings and securing edge over competition. The same stands true from a customer view point, where customers are yearning for speedier and smarter banking solutions and digital modes are the best way to cater to such needs. SMSs have reached more of a “hygiene factor” state by now. Swift online and mobile banking solutions are also mandatory in a bank’s digital solutions. At NDB we have expanded our digital avenues with deeper innovations. Branchless banking is one such example where we take banking services to the doorsteps of individuals, SMEs and corporates with the use of mobile digital technology. Branded as “Bank2U”, this initiative has also been an effective catalyst in promoting financial inclusivity, as it has enabled our teams to penetrate in to segments, which have thus far not been integrated in to formal banking. Presently, this service is available across 75 localities in the country and we intend to expand this further. Another digitized customer service offered recently is the deployment of Cash Recycle Machines [CRM]. These machines are capable of cash withdrawals as well as cash deposits, with lesser maintenance involvement, and a host of other straightforward transactions, hence act as a mobile banking unit, relieving transactions taking place over branch counters. We have heightened the effectiveness of these CRMs by locating them at offsite premises, particularly at busy and populated places such as hospitals, malls, etc. All of these digital avenues, including the common ATM network, common electronic fund transfers, mobile banking, etc., have enabled us to carry out approximately 70% of our total transactions via a digital mode in 2018 and we intend to increase this penetration to higher levels. Yo u rec en t ly o p en ed a n ew t y p e o f b r a n c h , t h e NDB N E O S b r a n c h . C a n yo u exp la in wh a t ma kes t h is b ra n c h u n iq u e? NDB NEOS is yet another example of our digital innovations. Staying true to the Greek meaning of youthful, new or fresh, this is a state-of-the-art fusion of physical and digital aspects which has led to a unique “phygital branch”, which provides customers a new paradigm in banking convenience. At NEOS, the physical presence of bank staff is minimal and is available for advisory services, whilst banking transactions are a digitized experience. This adds value to the customer’s banking journey by

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ASIA COVER STORY ensuring human interaction for a personalized service while leveraging on sophisticated technology to deliver comprehensive information and high quality customer support. Some of these initiatives are unique innovations to the local banking industry namely; a comprehensive interactive digital platform connected to multiple devices, pad bot based queue management system, paperless account opening through interactive devices directly linked to the Bank’s

core banking system, wide digital screens with all information, and totally paperless transactions processing, and most importantly the successful implementation of Robotic Process Automation [RPA]. NEOS is NDB’s first phygital branch, and we intend to replicate this model in more new branches in the near future. Can you tell us about the leasing solutions you offer? NDB’s leasing solutions are designed based on our core principles of customer convenience and speedy service. We have a dedicated leasing

sales force, spread across our branch network, providing a doorstep service to our customers and NDB is one of the few banking institutions to provide such a service in leasing. There are many instances where we customize the product for a tailor-made solution in response to customer requirements, for added convenience. We also have two 365 days Leasing Centres, located in two high customer density areas for the convenience of our customers. The newest addition to

the leasing service aspect is opening of dedicated leasing centres. We have opened three such centres thus far, as autonomous units with delegated authority and possess full capability in completing a leasing offer to customers at the centre, thereby providing an expedited and timely service. NDB Leasing also enters in to agreements with leading vehicle dealers in the country periodically. These agreements are beneficial to the Bank’s customers as promotions conducted under these agreements provide discounts on the vehicle price from the dealer as well as preferential rates from the Bank. NDB’s leasing business has performed well over the past years, with a healthy portfolio quality.

Wh a t in n ova t ive p ro d u c t s , s e r v i c e s h ave b een c rea t ed rec en tl y i n d irec t res p o n s e t o c u s t o m e rs ’ n eed s a n d wa n t s ? NDB Araliya bundled product offer is the latest addition to NDB’s product portfolio. This is an expansion of the NDB Araliya women’s saving product which was launched in 2017. NDB Araliya is more than a product and is a platform dedicated to empower aspiring Sri Lankan women. 51% of the Sri Lankan population is females,

and research conducted by the Bank in collaboration with third parties during 2017 revealed that women do not enjoy access to financing at the same levels that men would do, owing to a series of reasons. Based on these findings, the Bank launched this proposition which caters to three distinct women segments of homemakers, salaried women and women entrepreneurs. The bundled product launched in 2018 comprises loan facilities, overdraft facilities and credit card facilities. Another major initiative which we carried out in 2018 was the re-launch of NDB “Ithuru Karana Maga”, which translates to “Path to Save”. This is NDB’s iconic savings philosophy,

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which promotes sustainable savings as a key life skill and encompasses not just financial savings but also saving energy, time, resources, nature, etc. The concept and its benefits are open to all, irrespective of whether they are NDB’s customers or not. In response to customers’ continuous need for speedier services, we streamlined a number of internal processes. We introduced a workflow solution to customer onboarding and account opening during the year, which considerably reduced the turnaround time. We also launched a Service Champion program across all front lines and service departments, the primary purpose of which is to attend to and resolve a customer query/ suggestion within minimum time. Process upgrades were also introduced to credit card approvals, thereby enabling credit card issuances to eligible customers within three days. You were the first Sri Lankan Company to obtain Global Gender Equality Certification – EDGE [Economic Dividends for Gender Equality]. What does this mean for the bank and for your customers? It is NDB’s privilege to obtain this Certification and to be the first, and to date, the only corporate to be certified. EDGE is the only certification available in the world, to measure gender equality at the workplace. As I mentioned earlier 51% of the Sri Lankan population is females. HR statistics with the Bank is closely commensurate to this, where 39% of overall staff and 40% of senior management is female. NDB is strongly convinced of the business case of gender equality. Equality helps attract and retain quality, competent and motivated employees, enhances an organization’s ability to secure sound investments and affirms a company’s credibility in the market. Yet another aspect is from the viewpoint of the customers. There is an increasing preference in customers to patronize businesses that are ethical, environmentally

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friendly and promoting equal treatment to men and women and supporting women led businesses. Gender equality permeates all our HR processes, right from recruitment through T&D, promotions, pay, etc. It is an integral part of how we function. NDB is committed to a robust and definitive action plan post the Certification based on recommendations, which will bolster our commitment to gender equality. Furthermore, as I mentioned previously, we have a product dedicated to women, in empowering them and closing the gender gap in access to finance. Our efforts in this endeavor is meaningful only if we walk the talk within the organization. Last year you experienced exceptional financial results. What do you attribute to this and what are your plans for continued growth and success this year? In 2017, NDB launched a mid-term strategy dubbed as Transformation 2020, with the ultimate objective of becoming a systemically important bank [SIB] by 2020. The exceptional results in 2018 are attributable to this meticulously devised strategy, precise implementation, execution and stringent monitoring and review to ensure that the intended results were met. 2018 saw the Bank achieving a commendable growth of 28% in post tax profit, 23% in total assets and 27% in loans to customers as well as customer deposits. All these growth rates were well ahead of the industry average growth rates for 2018. The Bank’s net interest margin reached 3.5% to be par with the industry average, which was less than 3.0% in 2015. We maintained one of the lowest NPL ratios in the industry and also one of the healthiest cost to income ratios amidst accelerated growth. This is the second consecutive year that the Bank sustained such exceptional growth, whilst enhancing all KPIs. 2019 will be a year of consolidation for NDB. As I mentioned earlier, 2019 is an election year in Sri Lanka with the presidential election as well another major


election due to be held. As such, we anticipate a moderation in the economic growth. The Bank will continue to grow whilst also focusing on large process improvements and system upgrades within the Bank to achieve leaner and speedier processes for an enhanced customer experience with NDB. We will deploy dedicated six sigma trained teams on BPR initiatives towards this end. 2019 will see considerable investments in IT and digital infrastructure as well. Furthermore, with the Bank being at the eve of becoming a SIB, infusion of equity capital is also a priority for us, which we will work on during 2019.

management solutions, securities trading & advisory and private equity management via NDB Investment Bank Limited, NDB Wealth Management Limited, NDB Securities [Pvt] Limited and NDB Zephyr Partners Limited respectively. Our award winning investment banking operations have forayed in to neighboring Bangladesh as well via NDB Capital Limited, establishing the NDB brand within the South Asian Region. As such we enjoy the status of being Sri Lanka’s largest financial services conglomerate, offering the full spectrum of banking and capital market solutions to our customers.

With all these happening internally, 2019 will serve as a robust launch pad for the Bank to accelerate growth in 2020 and beyond.

Our women-centric product which I made reference to earlier is a resounding example of empowering needy social segments in the country. The Bank’s SME and microfinancing initiatives are also targeted at not mere financing but also capacity building and social wellbeing of the entrepreneurs.

How is NDB supporting the social economic growth in Sri Lanka? We are National Development Bank PLC. National development is in our identity and also our DNA. As our origin is in development financing, as a fullyfledged commercial bank today, what we offer to our customers come with a deep development orientation may it be a retail, commercial banking or SME product. Our Project Financing Department in particular is engaged in unmatched services toward economic growth through funding infrastructure and energy projects – particularly in renewable energy.

With over four decades of presence in the Sri Lankan economy, NDB continues to act as a key catalyst in the nation’s development.

What makes our efforts in national economic growth ever more dynamic is the full spectrum of capital market solutions that we offer under the NDB brand name, in addition to commercial banking, through our capital markets cluster companies. We have dedicated companies providing full spectrum investment banking, wealth

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How Strategic HR is Turning People Analytics into Business Outcomes The function of HR is going through a rapid change. As with all industries and internal business functions, the advent of technology has boosted abilities and allowed for the once intangible to become tangible through the capture and analysis of data. In the past 20 years, the function of HR has gone from submitting absenteeism reports to reporting on turnover and other employee numbers, to today delivering tangible business outcomes. While HR professionals have long cared about business strategy, the challenge has always been the ability to forecast, to prove with some degree of certainty what their actions would deliver for the business - what retention really meant. With the inability to predict outcomes, HR historically battled a disconnect when requesting budgets, knowing that their actions would have positive impacts, but not always being able to say exactly what that meant for the bottom line. The shift has begun; HR Managers or Directors are now becoming HR Business Partners, a sign that the function of HR is transitioning towards something more strategic, aligning with the goals of the business and driving outcomes that can be measured in a way business leaders understand and therefore demonstrating ROI. Â What is strategic HR? Strategic HR includes all of the typical HR components, including hiring, discipline, and payroll, but through the use of technology, HR can now also work with the business to boost retention, improve the quality of the work experience, and maximise the mutual benefit of employment for both the employee and the employer.

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HR departments today collect massive amounts of people data which can fulfil business goals and be presented to management in a more impactful way. Utilising business intelligence tools, HR teams can now forecast the ROI of their initiatives to prescribe the most effective course of action, whether for attracting new employees, retaining existing employees, or running initiatives internally to boost morale and drive sales. If the business wants to lower internal costs, HR teams can implement goals that back this up by employing increasingly effective strategies to retain more talent, thus lowering recruitment costs. Informed insight means informed decisions With the state of this technology as it is today, a proper HR analytics tool requires no major overhaul for a business. These tools simply pair with the best of breed systems an organisation already has and then creates a warehouse of data. No painful starting point. No need to be a data scientist. It is ‘drag and drop’ level easy with the massive upside of giving HR professionals unprecedented insight into the minds of their employees and thus the heart of their organisation. Workforce analytics tools help businesses to make better decisions, find hot spots, identify managers that are failing or excelling, identify

employees to try and replicate, define programs that boost morale, and quickly quash initiatives, policies or other internal situations that are harming the happiness of the people. What can be uncovered with these tools is innumerable, but the simplest and most powerful outcome is preventing the loss of employees by leveraging employee data to make smart retention plans. After all, the largest unnecessary expense for a business is to lose good employees. If a company spends, on average, $100 per employee on

ASIA BUSINESS retention, it makes sense that they would want to know who is actually most likely to quit, and who is most worth focussing the investment and time on retaining. This critical information helps to create and sharpen retention and engagement plans and forecast what costs could be saved as a result. Modern HR is backed up to the business HR teams now have the ability to be right there to back up business goals, attracting and retaining the best talent and consulting with the business on the best initiatives for employee satisfaction, even down to which policies could be replaced to retain more employees. Additionally, people analytics strategies allow HR departments to align measurable goals with

business goals, provide actionable analytics to the right roles, suggest actions to improve the future, measure the impact of these actions, and report outcomes to the business. The benefit for the business is obvious; clear, predictive analytics to show the measurable business outcomes that can come from HR initiatives. For HR professionals, these tools not only allow them to work with more efficiency, but it also brings them into a new era where HR can stand as a strategic business partner, with tangible evidence to back up what they have known all along: happy people drive business forward.

Brad Winsor, VP Workforce Analytics SplashBI

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Four Corporate Email Oversights That Put Your Organization at Risk As part of onboarding, new hires typically sign an employee handbook which includes policies and guidelines for acceptable information technology usage. Within the details, are often policy restrictions regarding unacceptable usage for email. Typically, these policies state that email should only be used for official company business correspondence, and not for personal communications. If you travel frequently for work, or are responsible for purchasing merchandise or services for your employer, is it acceptable to use your work email address, or should you use your personal email to complete the transaction? This question, and the aftermath of your departure from an organization, can create a complicated situation and security risk that most

employers are completely ignoring. And, unfortunately, they have no way to manage or mitigate the potential risk. Consider these reallife scenarios that organizations are facing today: Using corporate email accounts as login for travel services An employee creates an account on an airline’s website using the corporate email address. This address is used for authentication into the service and to book flights or other travel arrangements.

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Potential security implications After their employment is finished, any notifications or future bookings for flights are tied to the suspended business email account. If your organization auto-forwards the email to a peer or a manager, then an identity theft threat vector has now been created. A coworker now receiving the former employee’s emails can simply select “Forgot password” and own the forwmer employee’s account. This is especially true if the account is not further pwrotected by security questions or additional two factor authentication. If verification is tied back to the same email address, then it is game over once they have a confirmation link. Recommendation The most security-conscious way to handle this scenario is for an organization to enforce the use of an approved corporate travel service for booking flights, hotels, cars, etc. in lieu of allowing employees to book travel on their own and using a corporate email account. If the business permits bookings outside of a corporate service, allow and recommend individuals to use their personal email accounts for booking travel—even if they pay with a corporate credit card. After all, it is their account. Email address formats Most organizations have an email address schema. Typical formats include first initial last name or first name dot last name. Potential security implications What happens when an employee leaves the organization and a new

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employee starts with the same name or initial combination? The new employee potentially receives all email of the former employee even if it not slated for them. Depending on the new employee’s role, the email may not be remotely appropriate (such as when PII and financials are involved) for them to receive. Organizations that continue to grow will have a higher statistical likelihood of overlap for names and initials. Recommendation Organizations should never reuse email addresses from former employees for new personnel. Consider adding numbers like “01” to the end of new email addresses to avoid this problem in the future. Using corporate email accounts for payment gateways Some organizations allow for the purchase of merchandise and services through common payment platforms, like PayPal or Apple Pay. These are necessary for some employees (such as marketing team members) to perform their job functions. However, none of these platforms should be set up with a user’s corporate email address. If they need to use a business email address, create a group or alias for these services.

Potential security implications Just as with the air travel example in the first scenario, a personal account used for services can be leveraged against the individual if they leave and have no access to change their email address. Recommendation For these types of situations, it is recommended to use a dedicated account name for authentication, as opposed to an email address. This option allows the account owner to change the email address, but does present additional risk if the account is shared. Former employees using shared accounts for payment services underscore the ongoing risk of inadequate privileged access controls and the threats of shared accounts. Using corporate accounts for personal email Some employees use personal email for group-based personal correspondence, such as for their children’s school.

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Potential security implications Once an employee departs the organization, the receiver of forwarded email is now potentially exposed to highly personal information, and potentially in violation of some local regulations. Recommendation Corporate email addresses should always remain strictly delegated to business usage—and never for personal communications. The results can present some interesting legal ramifications, especially if removal of the address from a group is not trivial. Today, the boundaries of work and personal spheres continue to blend and blur—providing benefits (work

flexibility, higher productivity, etc.) for both employers and employees—but not without cyber risks. Completely strict policies of corporate email usage will only introduce more risk as employee turnover occurs and our dependence on electronic communication continues. Organizations have embraced policies like Bring Your Own Device (BYOD) for mobile device support and should consider allowing personal emails addresses for exactly the same reasons. Acceptable email usage policies need to clearly state when personal usage is acceptable, should be implemented, and when it creates unnecessary risk due to employee termination.

Morey Haber CTO BeyondTrust

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The Changing Face of Cloud: How to Overcome Your Data Challenges From new-fangled concept, to industry buzzword, to the foundation of many critical services – cloud certainly has come a long way in a short time. A little over a decade ago, pioneering businesses first used a single cloud provider to host relatively simple applications, such as backup or chat apps. It worked brilliantly; these companies were suddenly able to create tools and services that simply weren't possible before, or at least, couldn’t be delivered at the price-point or scale needed. Fast forward to today and organisations of all kinds – from the smallest fintech start-ups to the largest financial institutions – are betting big on cloud. However, business needs have also moved on and these companies are now under enormous pressure to create highly complex, real-time responsive applications that have equally complex infrastructure needs. In a recent digital transformation study 1 , 88 percent of IT leaders working in financial services and insurance firms said digital disruption in their industry had accelerated over the past year. In response, these businesses are looking to revolutionise their digital offerings, with 86 percent admitting they must adapt digital services over the next 12 months or accept they will be less relevant.

The data demands from these new services are huge and while the ambitions for more complex applications and uses of data continue to grow, many IT teams are finding that their existing infrastructure – whether cloud or on-premises – is holding them back. Those early pioneers of the cloud, who may partner with a single cloud provider, are likely to face three key challenges when working out how to best use their data to deliver exciting new services and applications. Challenge #1. Reduced flexibility While any given cloud provider may be a good choice one year, there is no guarantee that it will meet the business’s cost and resource needs forever. Not all clouds are created equal; it’s quite common for enterprises to want to move certain data or workloads between different clouds to optimise costs. Clearly, this becomes a challenge when data gets ‘locked’ in one cloud because the provider has intentionally made it hard for users to migrate to another. When enterprises need to respond to requirements such as spikes in demand, changes to applications, or just long-term growth, they want to be confident that it’s easy to move their data to the cloud or on-premises system that best meets their needs. Challenge #2. Harder to mitigate the risk of outage

When it comes to application performance, most users today expect applications to be extremely responsive, often with sub-millisecond response times. Even small reductions in performance can leave customers frustrated. If a cloud provider was to suffer a major outage, it could lead to a service not being able to work at all and this could have a very public and severe impact on the organisation’s reputation. Although the likelihood of such an outage is small, the threat alone means many enterprises want to be able to divert workloads from one cloud provider to another at very short notice. Challenge #3. Slower to add new capabilities Businesses are constantly looking for ways to do more with their data; creating or modifying applications and services to react to customer needs, new regulations, or their competition. For example, more enterprises are looking to push data closer to the edge, so mobile applications and IoT devices can deliver a real-time and ‘offline-first’ experience. Some cloud architectures don’t meet the need to store and process data in this way, delaying new projects or making them too expensive to implement. IT teams are finding they need to not only easily move data from one cloud to another, but also move data to and from an on-premises deployment to a cloud, and increasingly, from a cloud or on-premises deployment out to any mobile or edge devices.

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Overcoming challenges with a modern cloud strategy Growing numbers of enterprises that adopted cloud the best part of a decade ago are now adapting their cloud architecture to take a cloud-neutral, hybrid or multi-cloud strategy; underpinning applications with database technology that works across every cloud provider, and also choosing the best cloud for each business need – which often results in multiple private and public clouds being used. Let’s say, for example, that the cost of using public cloud for a certain application starts to spiral out of control. With a cloud neutral strategy in place, the organisation could build out their own data centres and run their applications in their own private cloud, with no extra effort. The same is also true for a new data regulation. Multi-cloud makes it possible for an enterprise to move any affected data and workload into a secure on-premises environment, without the headache of cloud lock-in. But while it delivers on some of the modern data needs, multi-cloud is not without its challenges. The obvious problem with having a more diverse environment is how to stitch all these parts together so your data isn’t siloed. APIs can help to provide access to data across platforms, but these often come at the cost of performance and complexity, something that innovative digital enterprises simply can’t afford. One way that enterprises are adapting their multi-cloud set up to deal with these challenges is by building an independent data layer to act as a distribution centre – delivering data to applications whenever and wherever they need it.

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The data layer works alongside any mix of public or private clouds. It no longer matters where specific data resides – if an enterprise wanted to maintain a user’s profile across multiple channels, they can. For example, the customer of a bank might start a new application for a financial product from their smartphone, via an app that is hosted on public cloud infrastructure. The customer might then update some personal data using the bank’s website, which is based on a private cloud, and finally they might speak to an advisor in branch. The customer’s profile needs to be consistent across all this infrastructure to ensure that the experience is seamless. The changing face of cloud Cloud architecture, like many aspects of business, needs constant refinement and adaptation to ensure it can always support the changing needs of the business. Where data is concerned, IT teams must be able to abstract data from their clouds and deliver it wherever it is needed, in as close to real-time as possible. It’s also about not only choosing the right cloud for the enterprise’s current needs, but also having the right data management in place to ensure that business ambitions don’t outgrow cloud architecture.

Huw Owen Head of EMEA & APJ Couchbase


“[Report] Couchbase CIO Survey 2018.” PathFactory,


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Mr. Phaiboun Phongsavanh Managing Director Phongsavanh Bank Limited

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Leading CSR in LAO PDR Global Banking & Finance Review interviewed Mr. Phaiboun Phongsavanh, Managing Director of Phongsavanh Bank Limited on the occasion of winning Best CSR Bank Lao 2018 to discuss the importance of Corporate Social Responsibility. Congratulations on winning the award. Can you tell us about Phongsavanh Bank and how it has evolved over the years? Phongsavanh Bank Limited is the first commercial bank in Lao PDR, which is fully owned by a Lao businessman. The Bank was established on 29 March 2007 to provide complete, modern and trust-worthy financial services that meet international standards in terms of good quality (certified ISO 9001:2015). The intention of the Bank’s establishment by the founder was to serve Lao people from all walks of life, including farmers, the general public, small scale businessmen and executives from multinational corporations. Formerly, banking operations in Lao PDR experienced many problems, because Lao people were ignorant about banking systems and financial transactions. Most people preferred to keep money at home, while the rich deposited their money with foreign banks abroad. Phongsavanh Bank thus started to educate the general public on banking matters, which not only enhanced their banking knowledge, but also developed closer customer relations in order that they use financial institution to facilitate their business operations, while improving the quality of their life and promoting small scale business and attracting both local and international

investment. In this context, we are recognized as a reformer of banking services in the Lao PDR. Can you tell us why Corporate Social Responsibility has always been a priority for the bank? Phongsavanh Bank Limited is an affiliate of Phongsavanh Group in Lao PDR. Our leader and group founder Honorary Chairman Professor Doctor Od Phongsavanh, who is responsible for the success of all our companies believed that a key factor to the success of Phongsavanh Group is the principle of “Give & Share” and genuine commitment to upgrade the Lao people’s quality of life. This principle is transferred down to the Board of Directors, Management and all the staff in our Group. This has presently become the culture of Phongsavanh Group, including Phongsavanh Bank. Since the establishment 12 years ago, CSR has been the priority of the Management along with improving the business to provide quality banking service to Lao people. Over the years, we have been supporting the government and communities throughout the country. Thus, the Group as well as Phongsavanh Bank have become well-recognized and respected, both nation-wide and region-wide. Our CSR activities have therefore helped in building trust and our brand.

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What services do you have in place to support SME’s via CSR project of the bank? Phongsavanh Bank has a complete set of financial products and services to provide to customers, especially in the SME sector. Our SME loan and services are designed to serve the requirement of customers, regardless of the size of the business and industry, whether they are focusing on agriculture, handicraft, retailing, hotel, restaurant, education, production. Our Bank established a SME Banking Center that consists of professionals who are specialized in that segment of banking. They provide advice to the customer on agricultural activity, which ranges from plantation, animal raising, fishery, gardening and farming. Apart from releasing the loan, our bank also gives the advice on the investment, the information on the production of crop, production management, marketing and sales to the customer. We treat the customer as one of our own family. Previously, through the lens of “Give and Share” of our Founder, we cooperated with the government to find where we could give a hand to the poor which is one of the ThreeBuilds Directives of the government: reducing the poverty of the people. We were the first bank to give loans to villagers to support their agricultural activities in Sangthong District, Vientiane Province which was classified as one of the poorest districts in the province. This project is named “Sangthong District to get rid of poverty”. The loan was released with very low interest (1% per month or 12% per annum) and other fees were waived (while the normal interest rate to normal customers at that time was 17% per annum exclusive of other fees). The project was initiated by having conversations with farmers in the target area to understand their need, and what

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the Bank could provide. Our Bank invited technical staff from Khonkaen University, Thailand to work with us to share their knowledge and advise on the implementation of improved agricultural methods. We worked with the farmers closely in order for them to follow the technical methods to enable effective production after taking them on a study tour to Thailand on integrated agriculture activities in order to motivate them and experience reality on a firsthand basis. Moreover, we organized training on fund management, and finding the market for their production output. Overall, the project was very successful. After some years of the project implementation, the Lao Government declared that this district was developed and got rid of its “poverty” status. We are proud that our Bank and the Management could play a key role in an important task of the government where the villagers could have better living conditions, and be self-sufficient, as part of the nation’s development. That project became a good pilot for our Bank to carry on other similar projects. As our management sees the substantial contribution to the government’s directive, currently we are working on similar projects focusing on supporting farmers and SME sector in the poorest districts in the country. They are in Xaysomboun Province, Savannakhet Province, Xayabouly Province and Huaphan Province. If mentioning about the Phongsavanh Bank, what is unique that customers can think of? We have always received good feedback on providing excellent service to customers with a smile. Our standard and professional service system mainly consists of providing counter services from 8 am to 8 pm and 7 days a week, while

other banks close the counter at 3 pm and work on weekdays only. Additionally, our polite greeting is recognized as the key attraction of our service. We treat customers as our family members and service them with sincerity. Our staff are trained to understand that best, valuable and quality service is the heart of the business in order to increase the satisfaction of the customer. Under our professional management and teams, we foresee that our business cannot grow without the support of all the customer, business partners and related stakeholders. Therefore, we adhere to honesty, sincerity, quick and safe service which results in greater customer trust and satisfaction. Additionally, another strength of our Bank is that we are an affiliate of Phongsavanh Group that has various firms with various products and services to offer to our customers. How do you ensure service quality for new and existing customers? It is certain that to maintain the growth of our business, the most important part is our CUSTOMERS. Therefore, customer satisfaction is the most crucial part that our bank emphasizes to both existing and new customers. We focus on creating quality products and services that meet the requirement of the customers in different location throughout the country which have different needs and wants with reasonable and affordable fees and charges compared to other competitors. We could see that we have long term customers who stay with us and keep coming back to use our service. We classify them as our VIP customers who we provide privileged service than normal customer. Apart from that, new target customers are always our focus who add value to the growth of our business. We provide our quality service system and conduct

ongoing market research to find out our new customers’ needs that keep changing with the rapid change of the economy. Competitor analysis is another area we must perform in a very competitive market environment, so that we acquire actual requirement of our new and existing customers. Then, we provide what they want to ensure highest satisfaction. Do you have any plans for expansion? Phongsavanh Bank has a giant step to grow the business in 2019 in order to ensure the implementation of the business plan of the Bank and the rapid growth of the country’s economy. This year, we have a plan to open 9 new branches and service units and 30 ATMs throughout the country. Currently, we have 42 branches and service units and 150 ATMs in total. We are the first and only bank in Laos that gives the service 7 days a week from 8 am to 8 pm, which is our unique selling proposition. Since the establishment of the bank, we are mostly the first commercial bank in Laos to bring new and innovative products and services to the country, e.g. initiating the foreign currency exchange system to be in a standard system in the Lao PDR that allows all banks to trade foreign currencies in a system. Moreover, we are the first bank to trade Vietnamese Dong, Thai Baht and Lao Kip, while previously US Dollar was the only legal currency to trade. We also have a cooperation with Bangkok Bank of Thailand, Thailand to have the ATM link with more than 10,000 ATMs throughout Thailand to give the service to our customers who travel or live in Thailand.

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Is the promise of Artificial Intelligence (AI) and machine learning distracting from the technology already at our fingertips? The estimated cost of global fraud currently sits at around $3.2tn annually and it’s growing. Not because financial institutions and companies aren’t investing enough time, money and resources into tackling the issue, but because fraud has professionalised and continues to innovate.   The banking and finance industries have made enormous strides in recent years, using emerging technologies, including AI and machine learning, to tackle financial crime, whether detecting arms sales, money laundering, terrorist payments or identifying mule accounts.   AI is still emerging and while there is a lot of expectation pinned on its potential,

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it’s not quite there and there are existing solutions that will spot the unordinary; those unusual patterns of behaviour and combinations of activity most commonly associated with fraudsters. The reality is, we needn’t wait for AI to reach the level of maturity necessary to save the day and rid the financial industry of fraud; we already have what we need.   While, it’s true, AI and machine learning offer enormous possibility in terms of tackling fraud in a meaningful way, we should also acknowledge that AI, and its ever-growing capabilities, isn’t the preserve of those on the right side of the law. In recent years, fraudsters have also been quick to harness new technology

to serve their own ends and, in doing so, have significantly impacted the time and ease with which financial details and other personal information can be stolen. At the World Economic Forum Annual Meeting, experts discussed the need for financial institutions and companies to experiment with AI and machine learning in order to combat fraud and economic crime - yet so much of the technology we already possess hasn’t been explored fully.   Experimentation should be encouraged - and essential if we are to tackle the growing threat - but we shouldn’t become blinkered into solely focusing on what doesn’t yet exist.  


necessary. The ability to mitigate fraud risks will be far greater with a rich mine of data harnessed from a host of credible third-party intelligence sources. As digital fraud becomes more sophisticated, financial institutions and businesses must rethink their functional detection and protection architecture, with security and risk management leaders instead striving for a contextual, risk based approach to address multiple use cases.  

Securing customer application processes

We must look carefully at how each platform, programme and data set could work in combination to create an effective solution or method by which to identify and prevent fraud.

Reviewing platforms

If we’re to succeed in combating fraud in any meaningful way, businesses must take a multi-faceted approach, using a range of technologies, processes and applications, incorporating everything from syndicated data sourcing and network visualisation, predictive analysis and data matching, all combined to create a system that is effective and acts not only as a fraud defence system, but also assesses risk, adding a preventative function.   Prevention is always better than the cure, as the old saying goes, and that’s especially true here. Technology should work as an interconnected framework that keeps companies on the front foot, deterring potential fraud and detecting early indicators of criminal activity or intent before a reactive approach is

With financial crime continually evolving, and fraudsters investing more time and resource into clearing upfront identity checks, it can be a challenge to keep ahead of the curve. However, with robust identification and verification checks at the point of application, the likelihood of identifying illegal applications is much greater.   Digital verification checks allow a complete view of customers’ digital history, including email, device and mobile intelligence. Screening for high-risk individuals and those with sanctions, including intelligence on relatives and closes associates, further increases the chances of fraud prevention proving successful.  

Similar to the emergence of AI, there’s been a lot of excitement around ‘big data’ in recent years and expectations about how this can benefit businesses and consumers. The collection of data only has any real value though if it’s thoroughly analysed. This value can then be maximised if data and analysis is securely shared. Such industry collaboration has, through the likes of Cifas data, SIRA syndication membership and the National Fraud Initiative, provided extensive resources to prevent fraud, with data and information inputted into shared resources to significantly decrease the chances of criminals finding success in their endeavours.   While we cannot - and should not - fail to recognise the possibilities that new technologies like AI and machine learning offer, we must not ignore the untapped technologies already at our fingertips.  

Commitment to industry collaboration and shared intelligence Perhaps one of the most important aspects in the battle against financial crime is a commitment from all players within the global banking and finance industry to collaboration; sharing data, information and best practice to reduce losses and increase intelligence resources.  

Mark Haslam Head of Product and Marketing Synectics Solutions

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Taking a More Human Approach to AI Artificial Intelligence (AI) is all about machines, obviously. Except it’s not. In truth, discussions surrounding AI may often centre around how competent, intuitive and contextually aware the machine brains we are building have become. But really, AI is all about us―the humans—and how it can make our lives better. There was a time, perhaps even inside the current decade, when AI tools and functions were still associated with the fanciful ‘talking computers’ that featured in many 1980s movies. It wasn’t that long ago that we considered AI as something of a ‘toy’ and its application in mission-critical enterprise applications was still somewhat laughable. Of course, now we take talking computers completely seriously. So much so that we’re equally focused on the proficiency of computer speech recognition. Application of AI But as far as we have come, we still need to look at the real world use cases of AI and ask how it can help us make our lives better. If we’re not applying AI to our human work experiences to examine and analyse where it can make those experiences greater, then what are we doing here in the first place? The truth is, many enterprises large and small have been struggling with finding the appropriate use cases for new and emerging AI technologies. Companies need to find the workflows inside their business models that can benefit from AI. Only then can they start to architect towards turning those operational throughputs into truly digital workflows.

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So how do we define AIenabled digital workflow Nirvana and how do we get there? Typically, the process starts with a technology audit and a process of assessment, quantification and qualification running throughout the IT stack in question. Individual business units will need to step back and identify their work problems and challenges as they look for the elements of their workflows that can be digitised.


digital workflows. Individuals are liberated from drudgery, productivity is increased and employees have a greater experience—a new virtuous circle is established. Practical examples Think about a typical office. When people leave the company, we need to manage who has a key fob for access to the car park. This is a perfect example of the type of job that has typically been performed manually through the use of a spreadsheet. This is time consuming, errorprone and obviously creates security issues. But it’s also (I hope obviously) a perfect example of the type of task we can evolve to become a digital workflow driven by intelligence stemming from AI. Our analytics engine should know that an employee is leaving the firm and so reports, alerts, emails and perhaps even mobile device management, to cancel the key fob, can all happen automatically. If we can make all those things smarter and more intuitive, then we can build better experiences faster.

Everybody across every line of business function will be involved―we need to crowdsource and collaborate to identify strategic areas of business operations that still exist as predominantly manual, accurately measurable and fundamentally repetitive. These are the parts of business that represent liquid gold, i.e. once we tap the seam, we can channel these functions into AI-driven services that subsequently run as

Uber hasn’t actually done anything fundamental to change the way taxis work or drive. It has changed the digital workflow that governs the ability to book and pay for the service. The list of services-centric examples in this space is growing every day. Automating a bad process doesn’t make it good In the technology industry, we are often bad when it comes to decommissioning things. Think about how many business processes probably exist today that firms need to eradicate and get rid of.

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ASIA TECHNOLOGY There’s no point in applying AI to these aspects of the business. As we know, automating a bad process doesn’t make it a good process; it just makes it an automated bad process! So, this re-engineering is actually an opportunity to clean out your cupboard and stop doing the things that you no longer need to do.

connected words to see if a new invention already existed in some form already. This would have been costly manual work, that may have been handed over to a specialist (in this case, a patent lawyer), but now we can digitise these aspects of the business. The human factor baseline

An example that came out of a recent hackathon, we conducted, is a tool to help with filing of patents. One of our hackathon teams used AI and ML to trawl the web for all registered patents using word recognition. They wanted to identify

We as humans now need to engineer the existence of AI into our own mindsets and consider how it can help us work differently. This includes knowing what things we don’t need to worry

about anymore. For example, we don’t take a map out with us these days, because we use a smartphone— so what else can we stop doing? As we move down the more humanised road to AI, we will find that AI itself gets smarter as it learns our behavioural patterns, penchants and preferences. We must still be able to apply an element of human judgement where and when we want to, but that’s already part of the current development process as we learn to apply AI in balance when and where it makes sense. The future of AI is smarter, and it is also more human. The end result is more digital at the core, but more human on the surface. If that still sounds like a paradox, then it shouldn’t. We’re at a crucial point of fusion between people and machines and it’s going to be a great experience.

Chris Pope VP Innovation ServiceNow

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Adding value through innovation...

Investment Banking Unit

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New CX Business Models Driving Financial Services Transformation In a complex, competitive and fast changing financial world with increasing customer demands, regulatory obligations, and disruptive technologies, the pressure is on for financial services to drive strategic growth and secure future success. Many are looking at CX leadership to drive transformation to deliver differentiated, superior customer experiences. 40 percent of US millennials have switched banks due to poor customer service. Indeed, more than two-thirds (77 per cent) would switch to receive better service, according to recent research1. Meanwhile, in the traditionally slowto-change insurance sector, 75 percent of incumbent insurers “believe the biggest impact to the industry will come from building new products to address the changing needs of the customer”, according to research

from PwC and Startupbootcamp. Only 26% of financial executives say their contact centres are somewhat or very future-ready (down from 31% last year). So how can the industry up its CX game? Use emotion analytics Emotion analytics enables you to treat individual customers differently, developing engagement that is personalized to each of their emotional as well as product needs. For example, the expected outcome of an inquiry may be to obtain a loan, but two customers with the same inquiry may have very different emotional needs, which in turn means they will respond differently to the same treatment. For banks, the issue is about how to appear human in a highly automated world and empathic towards their customers to help build stronger relationships.

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AMERICAS FINANCE For instance, providing contact centre agents guidelines on how to connect with customers by looking at the intent of the request (e.g., taking out a loan), identifying a related action or service and then alerting customers to the opportunity. Another example may be taking the time to provide a special touch like a handwritten card. The key is to let customers know the company is listening to them and knows them well enough to offer services they can use, when they need them. AIB is a great example of a bank placing associates at the forefront of their branch transformation.  Redesigned branches offer soft informal seating areas for customer discussions.  Tablets enable staff to hold informed consultative meetings, whilst sharing a screen with the customer.  If a more detailed discussion is needed with a specialist, customers can be introduced to an advisor via video conference, ensuring that the relevant specialist is available at all times. 

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Create contextually relevant Interactions It can be tempting to automate and digitise as many interactions as possible, but experience shows this can be the wrong approach. For routine transactions, consumers prefer digital channels, but they give higher Net Promoter Scores to companies that allow customers to speak with a representative to resolve a problem, reports Bain & Co. Banks can earn greater loyalty by making routine interactions convenient and frictionless, while providing a hightouch service experience with an associate during emotional moments, such as an insurance claim. Digital Customers According to a J.D. Power survey 2 , digital-only banking customers were dissatisfied with three areas: communication and advice; products and fees; and new account opening. Overcome those obstacles

by helping customers understand the ins and outs of their digital banking services; assign associates to follow up on partially completed or abandoned activities like filling out online loan forms, allow customers to choose how they’d like to receive onboarding information (FAQ, live chat, voice, etc.), ask customers if they are satisfied with the onboarding experience and give them the option to contact a representative if they select “no” or have further questions. In addition to the onboarding session, offer new customers a short review of what they purchased, how to use it, and provide details around accompanying products and services that might be helpful. Using disruptive technologies Organisations can combine the latest technologies in new, customer centric ways to provide better services. For example, instead of building a voiceenabled assistant with features similar to a website or app, what would enable a new way for banks to build and

AMERICAS FINANCE extend customer relationships? Many financial services organizations take this approach. “It will be less about a website or a mobile app as a destination and more about being where our members are and integrating with the technology around them, such as IoT and virtual assistants,” said Melissa Ehresman, USAA’s AVP of bank digital experiences, in the tech blog Tearsheet. USAA are not alone, car insurance start-up Cuvva set up in 2014 is a mobile app you simply enter the registration number and approximate value of the car you are borrowing from a friend or family member, choose the time you want to be covered for, take a picture of the car and Cuvva will get you an instant quote. Cuvva integrates with Facebook so that you can see which of your friends have cars to borrow. Cuvva queries various data sources to check driving licence data (The Driver and Vehicle Licensing Agency's MyLicence scheme), the Claims and Underwriting Exchange and automated fraud protection to verify coverage quicker than legacy players can. Launched in 2017, Homelyfe is a UK-based “insurtech” start-up that seeks to offer customers a range of insurance policies that they are able to manage from a single app. The app is designed to remove third parties, sales teams and comparison sites completely out of the equation by enabling customers to get quotes, purchase, manage and renew multiple insurance policies via their intuitive iOS and Google Play app. Having launched its first insurance product at the start of 2018, Homelyfe claims to have slashed the process of securing a home insurance policy to under four minutes, and has its own rating engine and broker emulating system to pull third party data to expedite the process by learning as much as possible about users to cut basic questions out of the purchase process. Understand which customer you are serving

Iain Banks Regional Vice President International Markets

Knowing which customer is in front of you is essential to understanding how to provide better service. Banks can now track individual preferences, including how a customer responds to marketing messages and behaves at different points in the customer journey. For example, the bank should know when a decrease in engagement is a warning sign, and when it’s an indication of customer satisfaction. Creating a 360-degree assessment based on customer, employee, and market information can uncover a number of strategic issues needed to address transformation. A cultural change management programme designed to incentivise branch staff to deliver the right customer experience at each interaction can drive loyalty and increase sales. Finally, create a roadmap for new initiatives. That way, only the initiatives with the strongest customer experience impact would be launched and more resources would be dedicated to ensuring that they would be executed well.

Iain Banks, Regional VP International Markets at TTEC, heads up the EMEA division and is an experienced, senior-level CX professional with a career spanning more than 18 years in the Global BPO/Contact Centre environment and with extensive experience of delivering CX and digital strategies for financial organisations; 1

“Want to Chat to Our Assistant?” Humley, html.


Crescent.seward. “2018 U.S. Retail Banking Satisfaction Study.” J.D. Power, 23 Apr. 2018, business/press-releases/jd-power-2018-us-retailbanking-satisfaction-study.

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Enumerating an overview of how the advent of digital banking has been transforming the vistas of the financial services industry The significance of digital banking can be attributed to its various benefits like reduced operational costs, attracting and retaining customers, and staying ahead of competitors by adhering to new regulations and using latest technologies The demand graph of digital banking has certainly grown at an unrivaled pace, with the world of IoT empowering consumers and compelling businesses to tread along the path towards digitization for remaining competitive in the financial services space. Numerous industry verticals have enjoyed the monetary gains realized by going digital, including retail, marketing and education, though not as extensively as the banking segment.

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On-premises transactions at banks have traditionally been considered as vital but arduous, primarily due to long queues and the time it takes to process requests like fund transfer, mortgage loans and investment options. Digital banking helps to address all such concerns, which is necessary to meet the expectations of the tech-savvy and conspicuously busy consumers of today. In its entirety, the term digital banking indicates not only the digitization of a bank’s product and service delivery but also all of its processes, from customer service to product development. Modern methods and technologies like AI, analytics and big data play a crucial role in implementing and managing a digital banking platform. Continuously

changing regulations and surging investments in the fintech sector have enormously increased the number of technological solutions available, enticing domestic and international banks to develop customer-friendly banking platforms. The digital banking market 1 , slated to surpass a remuneration of a mammoth USD 9 trillion by 2024, has indeed been transformed due to the ever-growing competition between financial instructions and demand from consumers to provide simpler retail, corporate and investment banking systems. Key digital banking trends to watch out for: The increasing significance of digital banking can be attributed to its


numerous advantages, some of which include reduction in operational costs, attracting and retaining customers to amplify revenues along with staying in front of the competition by adhering to new regulations and deploying latest technologies. The overall landscape of digital banking can be defined by the emerging trends being observed globally, with regard to the modernization of major banks and the rise of numerous specialized services. > Digitization of major financial and banking institutions Essentially, large banks have the potential to drive tremendous investments towards digitization and are gradually understanding the disadvantage in just upgrading the legacy software and hardware

systems, which is an expensive and continuous process. These established firms also comprehend the need for gathering customer information to help improve their services, and digital banking could provide them with a complete view of customer needs and behavior. Digital banking assistants are another novel provision available on the platforms of prominent banks to support and advise its users, signifying a remarkable evolution in customerbank relationships. Representing a common trend in today’s financial marketplace, Lloyd’s Banking Group in 2018 invested in a fintech company to adopt its online banking system. Lloyds’ move was aimed at meeting the Group’s goal of digitization over the coming three years, through which

its customers operate convenient and tailored services accessible via smartphones. An increasing number of consumers are performing crossborder transactions, and the digital banking platforms offered by such banks could greatly streamline the process of fund transfer. Separately, the Spanish bank Santander 2 , operating in numerous European countries as well as in the U.S., has also developed a digital banking platform for providing its customers with access to a range of products and services, including control on funds, managing cards, loans, among many others. Besides retail banking customers, most of the major banks have thousands of small businesses as part of their clientele, who need to manage

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their daily banking needs in addition to maintaining successful operations. Digital banking could potentially ease up the business process for these enterprises by offering more convenience in handling transactions, dispersing wages and keeping track of payments. The Bank of America 3 , as part of its digital banking offerings, has quite recently unveiled a host of digital tools particularly designed for small enterprises. The new tools would help in streamlining major expenses, transactions, generate cash-flow projections along with easy connectivity with small business bankers for quick advice. > Emergence of niche applications pertaining to digital banking The scope of banking has been consistently expanding with every generation and different categories of customers may utilize one type of service more than any other. With shifting consumer preferences, rising disposable incomes and growing investment opportunities, innumerable small players wanting a stake in the domain of digital banking have been striving to cater to specific customer requirements and niche segments. For instance, PayPal, now in operation for more than two decades, has simplified payments and transfer of funds with a promise of security, fulfilling one of the most widely used banking functions. It eventually paved the way for other similar businesses to open up, followed by digital platforms that cover other products and services. Lending is one such service which has found millions of customers dashing towards digital banking applications that are offering suitable loans at attractive interest rates and for specified industry segments. Quicken Loans is a business belonging to this

category and is one of the largest mortgage firms in the U.S. Another feature of banks which is slowly gathering momentum is investment and wealth management. Customers are increasingly looking to invest in stock markets, bonds and mutual funds, a process that conventionally involves complex decisions and paperwork. Last year, JP Morgan 4 Chase introduced a new investing app for its digital banking customers, enabling them to trade conveniently and also leverage in-built portfoliobuilding tool. Future growth opportunities for companies planning to tap the popularity of digital banking Over the next few years, more and more small banks are expected to fully digitize their processes and support paperless transactions, keeping up with the declining preference of consumers towards going to physical branches. New digital banks, which are completely on the cloud and have no traditional banking experience and infrastructure, will gain immense traction among young customers who have been directly gifted the convenience of online features. In terms of technological advancements, the escalating obsession for and interest in cryptocurrencies will coerce platforms to incorporate crypto savings and investment features, or risk losing customers. This will also result in the development of an alternate niche category of customers and businesses to serve them. In a nutshell, the global digital banking ecosphere holds massive untapped potential for growth, from meeting the day-to-day needs of consumers and enterprises to preparing for disruptive future technologies.

Saipriya Iyer Saipriya Iyer having dabbled with the domain of content creation for nearly half a decade, now boasts of an enviable portfolio, holding substantial experience in penning down pieces related to technology, finance, and a wide spectrum of other industry verticals. A qualified computer engineering graduate from the University of Pune, Saipriya can often be found leveraging her knowledge of software technology and electronics in her write-ups.


“Digital Banking Market Share 2018-2024 Industry Size Forecast Report.” Digital Banking Market Share 2018-2024 Industry Size Forecast Report,


“Bank Digitally and Confidently.You've Got Santander PROTECHTION.” Santander Bank N.A., www. digital-banking-overview.


“Bank of America Introduces New Digital Tools for Small Business.” Bank of America, newsroom.bankofamerica. com/press-releases/online-banking-and-technology/bankamerica-introduces-new-digital-tools-small.


Son, Hugh. “JP Morgan to Unveil New Investing App with an Eye-Catching, Disruptive Price: Free.” CNBC, CNBC, 23 Aug. 2018,

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The Latest Cyberattack Types – and How Financial institutions Can Stop Them Today’s financial institutions must juggle cyber threats, customer expectations and increasing regulation with a dexterity never before required. The proliferation of the IoT, which includes smartphones using mobile banking apps, has increased network traffic volume to the point that manual asset and vulnerability management will not suffice. Banks have adopted cloud strategies to accommodate this new volume, which means personally identifiable information is now regularly traveling across different network domains, further increasing risk. With few exceptions, cybercriminals are out for financial gain. Whether they install malware on POS machines or within banking apps, put skimmers on ATMs, run sophisticated phishing scams on customers or employees, or perpetrate any of a myriad of other attacks, the net result is that their crimes end up affecting financial institutions. Compromised

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AMERICAS TECHNOLOGY devices are also becoming a gateway through which the larger financial services network can be exploited. However, armed with the latest threat information, the finance industry will be well positioned to detect and defend against those threats. To that end, Fortinet’s Q4 2018 Threat Landscape Report sheds light on current criminal activity that affects any organization doing business in the digital world. Threats to Pay Attention To • No Rest for the Wicked: Cybercriminals spent the holiday season hard at work, according to Fortinet’s report. Cyber adversary activity overall subsided slightly, while the number of exploits per firm continued to grow. Exploits impacting individual firms grew 10 percent over Q4 2018, while the number of unique exploits they experienced increased five percent. At the same time, botnets also continued to grow, becoming more complex and harder to detect. Botnet dwell time inside an organization before detection increased by 15 percent over the quarter, growing to an average of almost 12 infection days per firm. Integrated security strategies and consistent hygiene remain priorities for security leaders. • Insecure Security Devices: As physical and cyber security merge, this intersection expands the attack surface – one that cybercriminals are increasingly targeting because they know many devices lack network security protocols. Six of the top 12 exploits were IoT-related, and four of the top six were related to IP-enabled cameras. Access to these devices could enable cybercriminals to snoop on private interactions, perform malicious onsite activities and gain an entry point into cyber systems from where they can launch DDoS attacks, steal proprietary information, initiate a ransomware attack and more. To thwart this malicious activity, financial institutions must ensure they have the right security protocols to protect online physical systems from attack.

• When Opensource is a Bit Too Open: The cybersecurity community finds opensource malware tools to be very beneficial. They enable teams to test defenses, researchers to analyze exploits and instructors to use reallife examples. These open ware tools are available on sharing sites such as GitHub – including attackers. They are accessing malware tools to morph them into new threats, with ransomware comprising a large number of them. An example of open ware source code being weaponized is the Mirai IoT botnet. An explosion of variants and activity continues to be catalogued since its release in 2016. Proactive Security Steps As prime targets for cyberattack, financial institutions must stay in the know about the latest threats and how to overcome them. Here are two highimpact actions organizations can take. First, deploy advanced threat intelligence. Cyber criminals are becoming increasingly innovative in the development of their attack methods. Permutation of open ware malware tools is just one example. The number of exploits instigated against individual organizations also continues to grow, and the complexity of botnets and other attack methods is increasing. The result is that organizations must remain vigilant and rely on advanced threat intelligence to keep pace with the volume, velocity, and sophistication of the threat landscape. This includes the use of sandboxing to identity unknown and zero-day threats, as well as a security platform that enables real-time threat intelligence sharing across each of the security elements. Second, be on the lookout for attacks from unexpected sources that can be mobilized quickly. For instance, though steganography is a low-frequency attack vector, cyber criminals are now using it in a way that enables them to rapidly grow the network used to deliver a malicious payload. In this case, an attack vector starts small—even outside of the corporate network—but rapidly expands in

circumference. Security professionals need to guard against these attacks with ongoing cybersecurity awareness training and by ensuring that they have transparent visibility of the entire attack surface. Towards an Integrated Framework Today’s network environments extend from the IoT edge, across enterprise networks and out to multiple cloud service providers. They are far too distributed for traditional manual prevention, detection and response solutions. In addition, compliance alone is no longer an effective security approach. The new standards and regulations require financial organizations to show a reasonable level of due care in implementing solutions and controls to detect and mitigate threats. Consequently, a holistic security approach—recommended in many industry standards and regulations—is on order. Integration and automation must form the framework for a security architecture that gives financial institutions deep visibility and control. At the same time, such a framework will provide the speed and scale needed to meet customers’ rising expectations and provide excellent service across all channels.

Anthony Giandomenico Senior Security Strategist and Office of the CTO Fortinet

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How can banks deliver on UN Sustainable Development Goals? CSR and SDGs are major priorities for many banks. Wazoku’s Simon Hill looks at how best to approach achieving these goals. Corporate Social Responsibility (CSR) has been a significant focus for banks and other Financial Services (FS) providers for several years now. The last time that CSR investment was assessed in 2015, the consulting firm EPG revealed that UK & US Global Fortune 500 companies spend $15.2bn a year on CSR activities. Banks were amongst the biggest spenders in that figure. Since the global credit crisis of 2008 / 2009, they have faced increased regulation to ensure they conduct business in the right way, and also far greater public scrutiny, so the industry has sought to demonstrate that it cares

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about the wider world and not just profits and the bottom line. This has been exacerbated by the United Nations (UN) and its 2030 Agenda for Sustainable Development, a ‘global blueprint for dignity, peace and prosperity for people and the planet, now and in the future’. As part of this, the UN announced 17 different but interconnected Sustainable Development Goals (SDGs), adopted by 193 UN member states and all designed to drive change in their respective areas. It is the responsibility of both the private and public sector in the 193-member states to make each SDG happen, and banks are under pressure to play their part in this. How can banks deliver on UN SDGs while also maintaining their CSR objectives?

The importance of UN SDGs Introduced in 2015, the UN SDGs are seen as the blueprint to achieve a better and more sustainable future for all and are becoming a major focus in FS as banks look to address challenges relating to poverty, inequality, environmental degradation and much more. Every single initiative counts and every new idea to help solve these issues is valuable. For example, the UN has suggested that if everyone switched to energy efficient lightbulbs, the world would save USD $120 billion, while in 2018, Copenhagen Fintech embarked on a program with non-profit organisation CARE to seek start-ups with ideas in providing loans and cash for the unbanked in Asia and Africa. At the same time, it has grown ever more important for banks to


A need for innovative thinking and sustainable innovation For any bank serous about UN SDGs, it should review what has been done before with CSR and look for opportunities to align that with SDGs. More broadly, to really deliver on such important and significant goals, it requires a more inclusive approach involving a range of communities and stakeholders, and the capture, evaluation and implementation of ideas from within a bank. Furthermore, such activity should begin to be woven into the core of what that bank does and is aiming to achieve. CEOs in FS often talk about ‘innovation’ and the need to be ‘more innovative’ but don’t have a true idea of what that entails and what they really want. To be innovative is vital for both CSR and UN SDGs, but it requires a different culture, different mindset, new objectives and a long-term plan for achievement and measuring success.

demonstrate good CSR. Doing good in and of itself is no bad thing of course, but banks do have other motivations. With millennials such a large and important customer group in FS, recent research by Cone Communications revealed that more than 9 in 10 millennials would switch brands to one associated with a cause and also that 87% of millennials would be more loyal to a company that helps them contribute to social and environmental issues. Demonstrating strong and tangible CSR is therefore important in banking for a whole range of reasons. Tying CSR in with UN SDGs is surely the ultimate goal – but how best to approach it? A simple way to build sustainable initiatives in a bank is to start from CSR and use it as an opportunity to think more globally about societal issues.

Innovation in relation to SDGs cannot be a side-project or something that exists in silo from the rest of the business, otherwise it is doomed to fail in terms of delivering any meaningful change. This is a good starting approach: A broader ecosystem of stakeholders – anyone can think of an idea that would help improve CSR and address a specific SDG and there should be no limits to creative thinking. Banks should involve employees, partners, customers and other groups as they seek to generate ideas to achieve SDGs. At the same time, SDGs should be tied into innovation programs across these groups. A culture that encourages innovation – ideas must be discussed, developed and filtered so senior banking staff can focus on the innovations that will really have an impact on SDGs. This means developing a culture of innovation, a long-term approach of collaboration and encouraging

diversity of opinion. Those involved must feel trusted and have the time and energy required to innovate, while ideas must be assessed in a way that reflects whatever SDGs the business is championing. Leadership and environment – the next element to deliver on SDGs is the right environment, which involves strong and committed leadership. Senior figures within the bank must set the tone and make it clear they are willing to take risks and learn from failure. More transparency and collaboration from the off, in terms of what is trying to be achieved with SDGs is vital. The setting of goals is also important. When the overarching objectives are as grand and important as SDGs, incremental goals along the way keep people focused and motivated whilst progress can be tracked. By aligning CSR with SDGs, a bank can contribute to something that really matters, positioning itself as a sustainable business that cares about the wider world in the process. This all requires a smarter approach to sustainable innovation, going beyond socially responsible one-off initiatives and challenging those in the bank’s ecosystem to think about CSR and SDGs in their everyday lives, fully embedded into the bank’s overall goals.

Simon Hill CEO and founder at idea management firm Wazoku

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Grasping the AI opportunity The use of Artificial Intelligence (AI) by businesses has grown dramatically over the last several years. Next generation technologies like this are receiving big investments from businesses of all sizes and across all sectors. For example, Deloitte’s Digital Disruption Index reports that 85 percent of senior executives plan to invest in AI by 2020, while Stanford University’s AI Index identified a six-fold rise in the annual investment patterns of venture capitalists into AI start-ups since 2000; with a huge boost in these investments after 2010. Moreover, Gartner forecasted that the business value originating from AI initiatives will reach $3.9 trillion by 2022, up from $1.2 trillion in 2018. No one disputes the massive potential that AI boasts. It is the engine driving businesses to grow, innovate and unlock new services for customers. However, embracing AI is a challenging process and businesses have much to consider before they can fully enjoy its benefits. The challenge ahead Difficulties in implementing AI have been identified when attempting to integrate AI tools with existing products and systems, as well as a lack of understanding around how the technology works and concerns around expense. For example, 96 per cent of businesses are running into data-related

problems such as inconsistent datasets, while 80 per cent reported a lack of collaboration between data scientists and data engineers, according to research conducted by Databricks. Then there is compute power. Typically, AI systems consume a lot of processing power, which is poised to rise as data volumes increase and the algorithms behind these systems grow in complexity. This is triggering significant concerns around scalability. It’s important to note that, practically, AI is still in the embryonic stages, despite its rapid evolution. While it has been talked about in industry circles for some time, it is only the last few years in which actual deployments have taken place in a few of these industries. One of the biggest AI obstacles for IT teams and business leaders to overcome happens before deployments. Understanding how to use AI to solve genuine business challenges and meet organisation requirements is crucial. As opposed to deploying AI for the sake of it, organisations must think about where AI can make its mark and where processes could be automated and transformed. This is a very challenging task. Although AI touches virtually every business on Earth, those with the knowledge and expertise to convert theory into tangible, profitable outcomes are hard to find – and extremely expensive.

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What’s more, AI doesn’t just reference one technology. It can take it in a huge range of technologies, including the likes of machine learning, data transformation, model creation, natural language processing and deep learning. To get the best out of these, it is necessary to understand their differences and how they can fit into business infrastructures. But, what can organisations do to address these issues and grasp the potential of AI?

powered systems up and running takes a huge amount of time, effort and expertise. These are resources which not all organisations have at their disposal. AI systems are only as good as their programmers. The skills shortage that the industry is suffering from at present has the potential to impact the development of businesses. This is where partnering with expert businesses, that can help forge the path, is essential to massaging any internal skills gaps.

What to consider Considering these challenges, making the most of AI comes down to several key factors. Initially, it’s crucial that businesses identify the importance of deploying back-end infrastructure and systems that can support the compute-intensive tasks intrinsically linked to AI and machine learning. Operating systems must be tuned for these advanced workloads, thereby allowing businesses to work with huge datasets, deploy applications at scale and manage the complexity that is going to be created. Secondly, organisations cannot afford to ignore the people side of this. Getting AI-

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Most importantly, business must demonstrate intelligence in the deployment of AI-based technologies. It should not be a case of just diving in. A lot of thought must be applied to designing a long-term strategy and investing in people with the relevant skills and experience. There is no doubt that AI is a major technological opportunity. Seize the chance by ensuring AI is leveraged in the right way and focused on solving problems that support businesses in hitting their targets. AI has been growing in intelligence for some time, now businesses must follow this path and be intelligent about AI to unleash its full potential.

Carmine Rimi AI product manager Canonical








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Purpose and Profit in Private Equity are Inextricably Linked At the 2019 World Economic Forum in Davos, Larry Fink, Chairman and CEO of BlackRock, published his annual letter to CEOs. The letter was titled ‘Purpose & Profit’ and it reinforced the idea that BlackRock are serious about changing the type of businesses they invest in.

adopt policies in line with the letter’s promise to change its behaviour and direction at all levels. And I must say that this year’s letter backs up its promises. In fact, there is no doubt that BlackRock is leading the way in shifting the private equity paradigm from shortterm profit to long-term purpose.

In this year’s letter, Mr Fink explains that purpose and profit are interlinked, with purpose being part of the longerterm strategy and profit the shorterterm outcome. Following last year’s letter on the same topic, sceptical readers may have seen this focus on purpose as hype, however this year’s letter reinforces its importance.

The challenge of profit with a purpose

It needs to be relevant for all stakeholders

As I discussed in an earlier article, this focus on purpose is what we call a paradigm shift. Let me share my observations on this major shift – as well as its implications.

Purpose must be built internally through company culture and leadership

Technology is disrupting how companies work – you can read more on this is my book FutureProof Your Brand

A cohesive brand ecosystem must be created, managed and measured to ensure coherency and consistency

A company’s purpose is its reason to exist beyond the profit it generates. That purpose is challenging for stakeholders because:

Mr Fink's 2018 letter wasn't a one-off For those within BlackRock and its investments, last year’s letter from Mr Fink came as a surprise because it represented a 180-degree turn on BlackRock's previous investment positions and strategies. It triggered rumours as to whether Mr Fink was genuine about making changes across the organisation, or whether he was using the letter simply to change external perceptions of the business. It wouldn’t have been the first time that a leader has used external pressure to speak to internal audiences and vice versa. I was curious to see whether the intervening year has seen BlackRock

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Solutions to these challenges must be leveraged for growth that makes a positive impact

Interesting times ahead As an entrepreneur, I often hear that we have reached the highest the economy is going to grow, with many analysts predicting economic turmoil in 2020. Mr Fink confirms these predictions in his letter – and he's very open about it.

Turbulent economic conditions will present a huge challenge for businesses of all shapes and sizes when considering ‘profit with a purpose’. Even in ideal conditions, the pressure to deliver on short-term profit expectations can be huge. But balancing short-term profit while also planning the long-term aspect of your organisation’s purpose will further complicate the process. This will be a key challenge for private equity over the next few years: how to balance long- and short-term considerations when your dashboard for short-term KPIs has red flashing lights? The growing importance of corporate communications Challenges around brand purpose, economic turbulence and disruptive technologies all make it clear that corporate communications will increase in importance, and that the role of the Chief Communication Officer will also need to evolve. Later this year, the Arthur W. Page Society will publish findings from a new thought leadership project led by Jon Iwata, IBM’s former CCO. Page is the world’s leading professional association for senior public relations and corporate communications professionals. It comes as no surprise that their findings will focus on Corporate Character, which is at the heart of thinking around purpose, and Communications Technology. I recommend keeping an eye on the Page website to see the news when it comes out.


Mr Fink also addressed this thinking in his 2019 letter, looking at how changes in our society are impacting demography. For example, he highlighted behaviour among younger generations. Millennials and postmillennials will demand to understand the ‘why’ of an organisation before they are prepared to engage either as a customer or an employee. Young people will vote with their feet. Likewise, those older generations heading toward retirement are living longer than ever before, they are more active, and they have greater financial and social influence than ever before. As the population ages and wealth shifts towards millennials, both groups will impact corporate behaviour. The future success of organisations will depend on their ability to gauge and communicate their raison d’etre to all stakeholders. Inspiration for 2019

to build a framework for profit with a purpose, focusing on purpose-led thinking and building on his original proposal in last year’s letter. This is an inspiring development and I’m excited to see what happens next. The importance of purposeled thinking has been understood for many years by the World Economic Forum and corporate communications stakeholders around the world, but we haven’t always seen businesses put those ideas into action. It’s brilliant to see the business community start to put more emphasis on the subject, and I believe they can only benefit by balancing short-term profit with long-term purpose.

Marc Cloosterman CEO VIM Group

In truth, I had expected Mr Fink to focus on a different topic – but he continued

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Careful spending, not high wage, helps avoid financial mess As the political debate rages on whether to raise minimum wage, I have some observations to make: Many Americans are living hand-tomouth not necessarily because they lack money, but because they do not know how to manage money. I have not done any systematic study, but I have some anecdotal evidence to support my point. I recently asked a prospective tenant to give me her bank statement so that I could check if she had enough income to pay her rent. When I examined her statement, I discovered she earned $3,800 for the month and spent $4,200. She covered the deficit by taking $400 from a $600 balance left over from the previous month. The statement I reviewed showed no emergency spending, such as medical costs or car repairs. What I found troubling is that she paid $93 in automated teller machine fees. By walking into a supermarket, if there was no ATM of her own bank, she could get cash back if she bought a small item, such as a can of soda, and avoid the fees. Of course, this is not a big amount, but it paints a picture of how many Americans spend their money. This waste may not plunge a person into poverty, but this pattern of behavior brings financial misery to many Americans. My tenant is based in South Carolina. Based on the cost of living in her area, the money she makes is decent enough for a 58-year-old person with no dependents to lead a decent middle-class American life. To better her financial situation, she must learn how to best use her money. She had no savings whatsoever, even though she has been receiving more than $850 a month as a military veteran.

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Why is it important to teach these people how to manage money? According to a 2016 GOBankingRates survey, 35 percent of all adults in the U.S. have only several hundred dollars in their savings accounts and 34 percent have zero. Only 15 percent have over $10,000 stashed away. Roughly 19 percent of American households are considered by the FDIC to be "underbanked," which means they have bank accounts, but still use non-traditional financial services like pawn shops, payday and auto title loans, check cashing and money transfer services. When consumers need the cash, they simply take it out from the closest ATM they can find. A vast majority of them say it is too much trouble to look for an ATM of their own bank that can save them the fees. A study by the federal agency showed in 2017 roughly 6.5 percent of U.S. households, or 14 million adults, did not have a bank account. Not having enough money was cited as the main reason in this FDIC study. The number of black and Hispanic households without a bank account was much higher -- 16.9 percent and 14 percent, respectively. Another study by a private company,, showed only 39 percent of Americans had enough savings to cover a $1,000 emergency. A Realtor in Macon, Ga., who owned a property management company and several rental properties, shared her view with me a couple of years ago. Based on her experience for several decades as a property manager, she discovered a vast majority of tenants in her area could not afford to pay a $1,000 deposit to rent an apartment. Screening prospective low-income

tenants in Florida and Georgia over the past five years, I have also discovered that eight out of 10 faced court cases for nonpayment of rent. But this does not need to happen. Most of these people earn enough to pay their rent and meet other expenses as well. How to teach them money? Non-profit organizations, such as local chambers of commerce, as well as for-profit groups, including real estate firms, financial advisories and


banks, can partner with community colleges to offer free seminars to teach adults about money matters. Schools should be mandated to give students practical financial education -- how to get the best value for their money. I recently watched a television program in Japan. It was about gambling addicts in Macao, China. Authorities became alarmed as the number of addicts soared in this gaming heaven. To combat the menace, schools in China have begun teaching pupils about how to manage

money. One particular point that the schools are trying to instill in their students struck me: You have to work hard to make money. This Chinese experiment sharply contrasts with the practice in the United States where the government encourages gambling in a misguided way to boost revenue. By teaching how to manage money, we can help many Americans to stay financially solvent, as anti-smoking crusade has helped many people remain physically healthy.

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The bank of tomorrow: Taking personalisation to the next level Personalisation is the buzzword on everyone’s lips right now – and it’s clear to see why. The vast benefits personalisation offers businesses from varying industries are showcased throughout countless studies, revealing personalisation is what consumers increasingly expect from the brands they engage with. For example, one report 1 revealed that 80% of consumers are more likely to do business with a company that offers personalised experiences. Given the rise of tech-savvy consumers demanding tailored experiences, all industries need to adapt to survive, including banking. Today’s consumers view financial services as an enabler for other aspects of their lives, and they want their banks to deliver the products and advice they need in an efficient, timely way – matching their experiences

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of being a customer of other digital businesses. Think of Wells Fargo’s personalised ATM messages in the US. Or UK digital challenger Atom Bank enabling its customers to customise the look and feel of their banking app as well as the name and logo of their own – personalised – Atom Bank. Indeed, the concept of contextual banking services is at the core of the propositions of many new entrants to the industry. Leveraging their digital nativity and a range of leading-edge technologies, they plan to exploit the dissatisfaction of customers with their incumbent banks to help consumers improve their financial lives with personalised experiences, products and pricing. How easy is it for established banks – with legacy systems, organisations and cultures – to provide contextual services? Are they in a position to respond quickly enough to offer

products and services at the right time and place to correspond to customers’ individual needs? The answer cannot be simply serving up offers every time customers check their balances. Instead there must be some value and mechanism to encourage continuous dialogue between the provider and consumers. New entrants and existing players bring different strengths and weaknesses to the table when it comes to delivering on the vision of personalised banking, but they must all grapple with this central problem – creating an engaging and ongoing customer experience in what is an ‘occasional sales’ industry. Increasing customer engagement Customer-centric banks are those that truly understand each customer at an individual level, and can therefore form a relationship with that customer, and work


want to make a change to their digital offerings. In a time when flexibility and agility are key, it is imperative that they follow the example of challenger banks. This means putting in place technology which can personalise and contextualise the customer experience by aggregating, analysing and mining huge volumes of data, structured and unstructured, in real-time. By implementing predictive analytics technology, banks are enabled to foresee and satisfy customer needs, in some cases even before the customers know they have them. Banks can become trusted advisors by proactively warning customers ahead of time that they may need a credit product, for example, or that there may be an opportunity for a savings product – and then providing them what they need at exactly the right time.

for them 24/7. Taking it a step further, many of today’s banks also aim to provide a service that is smart, cognitive, helpful and delightful– something which is very hard to do in banking, especially considering that this is a very low engagement category in business. While incumbents are responding in different ways – many are becoming multi-channel/ omni-channel banks by adding more channels into the mix, and are exploiting the ‘chattiness’ the new channels provide to become ‘engagement banks’ – new entrants into the banking space are leapfrogging those stages to be customer-centric banks by bringing machine learning and artificial intelligence into play. Technology underpins personalised banking Many incumbent banks are saddled with time consuming, ruinously expensive projects whenever they

The next step within the digital service model is for banks to price for the individual, and to negotiate that price in real time, taking personalisation to the ultimate level. As a result, the entire service model feels generous, warm and incredibly personal.

than ever before, the pressure is on for businesses to provide a seamless experience across all touchpoints. Customers want their banks to understand them, to provide solutions tailored to them and to speak to them in a voice that is for them alone. In response, we are starting to see some great initiatives from banks out to their customers, especially among new entrants who, due to their flexibility, have important advantages in delivering on the personalised banking vision. In order to survive, incumbent banks will need to rethink their mindset and organisational structure, which in many cases don’t yet lend themselves to consumer centricity. In order to build customer loyalty, banks need to match the kinds of digital experiences customers are receiving in other sectors. They need to make strategic bets and re-architect their platforms in order to be ready for the true impact of digitisation.

As an added benefit, technology offers banks the ability to de-risk rather than make risky decisions. To illustrate, traditional credit scoring algorithms typically take into account 23 variables for a yes/no decision. The latest systems take into account more than 400 variables. By combining behavioural and transactional data, banks can make better assessment decisions upfront.

James Eardley

Taking personalisation to the ultimate level With consumers demanding a more personalised experience, innovation needs to be at the top of banks’ priority lists if they want to meet these growing needs and stay abreast of technological developments. More

Global Director Industry Marketing SAP Customer Experience


Admin. “New Epsilon Research Indicates 80% of Consumers Are More Likely to Make a Purchase When Brands Offer Personalized Experiences.” Humans Over Hype, us.epsilon. com/pressroom/new-epsilon-research-indicates-80-ofconsumers-are-more-likely-to-make-a-purchase-whenbrands-offer-personalized-experiences.

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Steps to Thrive in a Boom or Bust Economy

The economy is in the news a lot these days. Some warn a recession is likely, while others point to the robust stock and employment markets as proof positive that the economy is still growing. What’s interesting to me about this debate is the role that psychology plays in the economy. When people are optimistic, they spend more and invest more -- two activities that, in fact, grow the economy. And when they fear a downturn, they spend less, hire fewer people, and invest little to no resources in new opportunities, which of course, slows the economy even more. In both instances, our emotions are self-fulfilling prophecies. Emotional impulses are hardly the kinds of indicators business leaders should hang their hats on, and yet so many do. It’s human nature. Still, when it comes to making decisions that will contribute to an expansion or retraction of the economy, we need to keep our impulses in check. The best way to do that is to forecast the impact of various economic trends on a company’s financials, and create multiple contingency plans to adapt to those trends. Here are five steps to help your company plan for whatever the economy brings your way: #1: Reduce Uncertainty, Plan For Risks If you’ve been to business school you probably read about Knightian Risk. If you haven’t here’s the concept in a nutshell: economist Frank Knight posited that risk and uncertainty are different animals. Risks are situations

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where one can predict the range and likelihood of possible outcomes (e.g. what is the impact on our financial statements if sales decline by 10% this year?). Uncertainty is when it’s impossible to know what might happen. The difference is crucial because risks are manageable, but uncertainty is scary.

times favor multi-purpose goods over specialized products, and weaker items in product lines should be pruned.” Conversely, in optimistic boom times, specialized products could be useful hooks to introduce new customers to your brand.

Uncertainty is always a part of life, but in a recession it can be all-consuming, prompting business leaders to make decisions based on impulse. Here’s where upfront what-if scenario planning comes into play. By testing possible outcomes upfront -- both in good times and more challenging ones -- and putting a response plan into place, uncertainties become manageable risks. On a psychological level, it means that the business leaders, and not some outside forces, are in the driver’s seat.

Companies that are agile are poised to exploit new opportunities as they arise, as well as weather the downtimes. There’s no secret to agility, it all stems from having a plan in place and ensuring that everyone in the company “knows the drill.”

#2: Identify and Invest in Key Growth Initiatives When management teams put their plans together for the coming year, they survey the sales teams to see what the pipelines look like and go from there. In other words, the plan is more or less business as usual. But the mix of customers, markets and product lines you nurture may not be your best growth opportunities during times of economic flux. For instance, when the country was facing a major recession in 2008, John Quelch wrote in Harvard Business Review 1 that “Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough

#3: Get – and Stay -- Agile

Once again, planning for multiple scenarios and forecasting their impact on your financial statements is the best way to stay agile. It’s also critical to identify the drivers that can serve as your early signals to activate your plan. And in times of economic flux, be sure to update your forecasts on a monthly basis to identify potential surprises as early as possible. #4: Have Your Story Ready In good times and bad, customers, employees and investors all want to know: what do things look like for the company? Executing a major growth strategy, as well as weathering a recession, requires a good deal of confidence in the future, which means you’ll need to figure out ahead of time what your constituents need to know in order to remain confident. Obviously, you’ll need to be frank about the risks, but you should also do all you can to eliminate their uncertainty. Well thought out contingency plans,


complete with balance sheet, cash flow and P&L forecasts, will allow you to articulate how the management team will lead the company through challenging times. #5: Don’t be afraid to invest in marketing and advertising When times are flush, businesses launch marketing and advertising campaigns, and when they’re constrained, such activities are the first to go. This is actually counterintuitive. If you advertise only during boom times, you’re competing in a noisy landscape. Conversely, if you’re one of the few companies to promote your brand during a recession, you’re far more likely to be noticed, and that can lead to long-term success once the economy recovers.

As John Quelch writes, “[a recession] is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”

John Murdock CEO Centage Corporation

John Murdock serves as CEO for Centage. Centage’s Maestro Suite enables faster, more accurate budgeting, forecasting, analytics and reporting for small to mid-market organizations. With over 20 years of experience in the high tech industry, John is the driving force behind the company's growth and transformation to a leading cloud-based solution provider. Follow on Twitter @centage.

No one can say definitively what the economy will do in the quarters ahead. We may see continued growth, a mild correction or even a textbook recession. Thriving during all stages of the economy is a matter of preparing for all potential scenarios and being ready to respond.


“Marketing Your Way Through a Recession.” HBS Working Knowledge, 3 Mar. 2008,

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Improving Customer Communications with Intelligent Content Management

Banking today continues to undergo far-reaching changes due to the adoption of digital technologies, particularly when it comes to customer communications. Surveys show that for most customers, digital devices such as mobile phones, tablets and laptops have become the primary means of communicating with their bank, lender or financial advisor. While these technologies offer significant advantages in customer communications, such as the ability to deliver immediate responses or establish a two-way dialogue, they also present challenges to organisations seeking to provide a cohesive customer experience across all channels and platforms.

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For banks, mortgage lenders, investment firms and other financial enterprises where establishing and nurturing a trusting and longterm relationship with clients is important, finely-tuned, interactive communication capabilities can be invaluable. Commonly in the adoption of digital communications platforms and technologies, however, the focus is on the technology and channel itself, with little attention being paid to the content. While Marshall McLuhan may have believed that “the message is the medium,� research has shown that it is the content and the message itself that has the power to influence a customer’s emotional reaction to a communication and build or destroy the loyalty that financial services firms rely on to add to their bottom line.

Centralise content management Many large banks and financial institutions have volumes of content that have been created over the years but are unable to harness this in order to improve consistency and quality of customer communications. One key reason for this is that the content has been generated by different departments within these organisations and is stored in isolated silos. This also leads to a cycle of authoring and re-authoring the same content over and over again, wasting time and resources across an enterprise. The adoption of digital technologies has only exacerbated this issue, as content is now often created and stored, not only in departmental silos, but also now in technology silos, with print


being separate from email, which is separate from chatbots, and so on. For any organisation seeking to create a cohesive customer experience and digital experience, they need to turn their attention to how they manage the content that is the foundation of customer communications. Ideally, organisations should adopt a means of centrally managing the content and pushing out the communications from a central hub. Many organisations are looking to modern customer communications management (CCM) solutions that both support omnichannel communications and offer advanced content management capabilities to act as this hub. More advanced CCM solutions will also enable content sharing across communications so that you can centrally manage logos, content information, calls to action, legalese, product descriptions, etc. This not only makes it easy to create consistent omnichannel

communications but it also greatly streamlines change management processes to rapidly increase time to market.

As organisations look at centralisation though, a key barrier is the overwhelming idea of sifting through an enormous volume of legacy content that exists. Often the content has not been maintained over the years and while some of it is relevant, someone needs to sort through what is still relevant, up to date and useful. This is no small task for most.

outdated information, identify inconsistencies in messaging, branding and formatting; and identify duplicate content and similar information. It is critical that content authors and experts from your internal departments participate in reviewing the results of the analysis and lead the cleanup effort to ensure consistency across the enterprise, clearly define brand and messaging standards, and align the content to the standards. While you can execute this step manually, it can take months of hard labour to sort through the content. It is far more efficient and cost-effective to utilise purpose-built content analytics tools.

The first step is to understand what you already have in those silos. Reaching a clear understanding of that content and migrating it into a modern environment will make managing and utilising it across channels more manageable. We recommend organisations begin by analysing the content to eliminate

Another consideration is reviewing your content to ensure it is clear and concise, and whether it’s appropriate for the various channels for which it needs to be used. Many aspects of your content can be shared across print and various digital channels and this helps to create consistency in your customer experience. That said,

Optimise your content

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it is key that your teams examine and re-think other aspects of the content to create channel specific versions. When examining the content, you should also ensure it is written in plain language. Consider whether you are using legal jargon or technical terms that need to be defined?. Is it concise? Are you sending the right message, the right sentiment and does it resonate with your audience in the way you want it to? Intelligently manage your content Once your content has been updated and is ready to be centrally managed in a hub, consider even more advanced ways to intelligently manage your content and customer communications to avoid simply duplicating past activities. One key strategy is to deploy a parent/child type communications touchpoint structure in which multiple communications share and are built from a single common template. For instance, you may have a library of 90 written and approved customerservicing emails which share a common base structure. Typical approaches would have you manage

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those emails as separate templates and communications. Instead, by creating one “parent” template that can pass down its core structure, format and key pieces of content to 89 “children” that each contains its own unique content you can greatly streamline change management and the creation of new communications. This type of content management also supports the overall goal of creating a consistent customer experience. As banking and financial services migrate increasingly to the use of digital technologies, simply keeping up with the competition is a significant concern. Customer convenience and satisfaction has become critical to remaining in the game and differentiating your organisation from others. By focusing time and attention on your content and not just the technologies used to deliver your messages, you can ensure successful digital transformations and the consistency that is essential to driving substantial increases in customer trust, loyalty and revenue for your financial institution.

Jeff Mills Vice President, EMEA Messagepoint, Inc

Mills brings more than 25 years of experience in the customer communications and high-volume documents industry. For more information about Messagepoint, visit

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Global Banking and Finance Review - Business & Financial Magazines  

Global Banking & Finance Review is a leading financial portal and Print Magazine offering News, Analysis, Opinion, Reviews, Interviews & Vid...

Global Banking and Finance Review - Business & Financial Magazines  

Global Banking & Finance Review is a leading financial portal and Print Magazine offering News, Analysis, Opinion, Reviews, Interviews & Vid...