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Digital Banking (Mobile/Online)

Big Banks Outpacing Regionals in Financial Advice

As routine branch transactions drop, customers increasingly turn to the six largest banks for advice.

Now in its second year, the J.D. Power 2019 U.S. Retail Banking Advice Study surveyed 3,719 U.S. retail bank customers who received any advice/guidance from their primary bank regarding relevant products and services or other financial needs and 3,405 U.S. retail bank customers who opened a new account within the past 12 months. According to results, big banks are outpacing regional banks when it comes to financial advice, all while routine branch transactions are dropping.

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Preparing for the Next Breach

By Alyssa Arredondo

After major data breaches — like the 2018 attacks on Marriott, Facebook, and Macy’s — merchants aren’t the only ones forced to take action. Consumers and financial institutions are often left to pick up the pieces by having to cancel payment cards and retake control of their financial data, causing strains on members, customers and institutions.

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Looking for a Digital Wealth Management Solution?

New York City, N.Y. // www.marstone.com; Greenwich, Conn. // www.interactivebrokers.com

Banks and institutions hoping to offer wealth management services can now leverage a cohesive solution that combines Marstone’s customizable digital wealth platform and Interactive Brokers Group Inc.’s clearing, custody and execution services. The result is a fully integrated, turnkey wealth management solution.

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Overcoming Barriers to Effective Real-Time Payments

By Elena Whisler

Real-time payments have come of age. As the new FIS report, Flavors of Fast, shows, the number of real-time payments programs has grown exponentially worldwide over the past few years: from 14 in 2014 to 40 today. An additional 16 are expected to go live immanently. It’s easy to understand why; we live in the age of instant gratification. Consumers (retail and corporate alike) increasingly demand that services are delivered with immediacy — and that includes payments.

As consumers see it, moving money around is now just a matter of ones and zeros; so, why shouldn’t payments be instantaneous? It’s more important than ever for financial intuitions and payments providers to cater to this demand. People have much more choice over whom to bank with and which payments services to use. If they’re to be competitive, financial institutions need to be able to offer this much-valued service.

Real-time payments and service innovation.

But real-time payments are about much more than simply protecting market-share: they also provide an opportunity to innovate and grow. Real-time payments infrastructure provides the framework over which financial institutions can launch new, value-add overlay services that will help them win in the digital age. Innovative services launched in 2018 included money management apps, intelligent account onboarding and credit scoring, retailer pay apps and new P2P payment methods. FIS believes that 2018 was the start of a pivotal shift in how real-time infrastructures around the world are used to provide contextually relevant, frictionless and immediate experiences.

The challenges of real-time operations.

The opportunities of the real-time revolution will only be realized if banks and payments providers evolve their processes and technologies. Key to this task will be creating a bridge between legacy technology and new systems and payments services. Completely replacing the IT systems of a large financial institution to enable API-based, real-time payments-enabled services is often costly and disruptive. Banks and payments providers should therefore look to enterprise payments software to integrate new technologies with legacy systems. This software-enabled approach will help financial institutions execute the latest real-time payments solutions seamlessly, and without disruption to core business systems.

There are two further barriers to success in real-time payments and associated services. The first is operational. Real-time payments require that operations are available 24 hours a day, 7 days a week, 365 days a year. As a result, financial institutions need to move to an always-on staffing model — and this will be a big change for many. This leads to the second barrier, which is technical: with a 24/7/365 model, there’s no scope for systems downtime, making it difficult to perform systems updates.

Realizing the opportunities of real-time.

These challenges are not insignificant, and many businesses may decide they simply don’t have the resources or technical capabilities required for real-time payments. However, the alternative of doing nothing is no alternative at all: these organizations will rapidly lose out to competitors that have embraced change.

That’s why I believe managed services will prove critical to the successful implementation of real-time payments-enabled services. By outsourcing the maintenance and management of payments infrastructure, financial institutions will be able to leverage economies of scale to reduce costs. More importantly, these institutions will also be able to outsource the compliance element of real-time payments as their service provider will implement the correct changes on their behalf. What’s more, the managed service approach means they can rest assured that their systems are always up to date without the need for disruptive downtime.

Change is coming.

We’re on the cusp of a new banking revolution, one where compelling new services leverage real-time payments capabilities to deliver next-level value to businesses. The FIS report shows that the building blocks for this new revolution are rapidly falling in place. The task now is for individual financial organizations to work out what this change means for them and how their strategy reflects that to ensure they will thrive in this new age. What seems likely is that organizations that move quickly stand to benefit the most, the only question being will the early bird get the worm, or will the second mouse get the cheese?

Elena Whisler is payments and data solutions director, FIS. For more information, visit www.fisglobal.com.

What Are Bankers’ Top Priorities in 2019?

Customer acquisition, digital banking, cybersecurity, regulatory compliance and lending are the five key strategic focus and spending in the year to come, according to Computer Services Inc.’s “Banking Priorities Executive Report 2019.” The report, which surveyed 220 bankers across the nation, uncovers strategies, trends and issues financial institutions consider the most significant in the coming months.

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