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The latest financial services trends, including fraud prevention and remote payments, were the leading topics at the recently concluded BAI Beacon Conference in Chicago. The conference is the successor to the Retail Delivery Conference that the Bank Administration Institute had operated for more than 20 years, which was known for highlighting the latest in financial institution technology and strategies for its use.
“We are at a hockey stick rate of innovation,” said Kevin Connelly, executive vice president of The RWC Group. “Non-banks are being seen as much as partners as competitors.” Indeed, a recent industry survey by IDC and SAP showed that 60 percent of worldwide banks would consider working with a FinTech firm, and 25 percent of those would consider acquiring one.
Concerns Over Fraud
Fraud continues to be a concern for financial services companies as they seek to protect not only their own internal systems, but also their customers’ data. Customer trust is one of the few advantages financial institutions still hold over non-bank competitors, though that trust was challenged greatly during the recent financial crisis. Additionally, millennials don’t hold the same trust of traditional banking as their parents did, making protecting customer data more important than ever for banks.
Consequently, one of the major financial services trends is the increasing use of analytics to identify and stop fraud by recognizing hack attempts of financial institution systems, customer accounts and customer transactions. Analytics enable financial organizations to look across customer activity from different accounts to recognize anomalous activity in systems and transactions.
Mobile Payments Gaining Traction
In addition to trust, the other area that traditional financial institutions still control is the payments system. However, with the rise of Samsung Pay and other mobile payment options, some of that control is being ceded.
Connelly expects Samsung Pay to gain market share over other mobile payment providers because it works with both near-field communication (NFC)- and magnetic stripe transmission (MST)-enabled POS terminals, while most other mobile payment solutions only work with NFC-enabled POS systems. Due to its functionality with both predominant types of POS devices, Samsung Pay tends to have more transactions per user than other mobile payment options, added Brian Pearce, Wells Fargo senior vice president, head of retail mobile channel and digital innovation.
As a whole, mobile wallets are still struggling to gain acceptance due to consumer concerns about security. Several speakers at the conference stressed the importance of educating consumers on the safety and security of devices and mobile payments to increase adoption.
However, other speakers noted that, just like internet banking and other technological innovations in financial services, mobile payments are becoming more popular and are already a preferred payment method among millennials.
While technology is at the forefront of financial services trends, research has shown that digital banking consumers are seeking a combination of robo- and personal advice.