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December 18, 2019

Cheema of FIS: 2019 intiatives will have real impact in 2020

By Aman Cheema

Aman Cheema, Head of International Strategy at FIS, believes that 2020 will witness the coming to fruition of initiatives taken this year.

We entered 2019 with great expectations. This was the year when a series of new initiatives and innovations would truly transform banking.

We leave the year feeling the same way, only with the revised expectation that 2020 will be the year these initiatives have a real impact.

Regulation and technological innovation

Regulation and technological innovation are in the process of transforming the way people are banking.

The most important of these are open banking, revised Payments Services Directive (PSD2) and the creation of the UK New Payments Architecture (NPA). These pivotal initiatives will support the introduction of new payment processes and instruments known as Overlay Services.

Using networked accounts, open banking helps lenders get a more accurate picture of a consumer’s financial situation and risk level. It could help consumers get a more accurate picture of their finances before taking on debt and can automatically calculate what customers can afford based on all the information in their accounts.

Other services will help small businesses save time through online accounting and help fraud detection companies better monitor customer accounts and identify problems sooner.

Critics of open data cite data breaches due to poor security, hacking, or insider threats. As the industry innovates, so does organised crime, making it more difficult to track and trace illicit funds.

Faster onboarding, greater personalisation

This can, in the long term, impact consumer trust negatively – an unacceptable risk for businesses.

Because of this the use of AI through machine learning to detect and prevent fraud is gaining traction. While the rate of AI deployment as a fraud management measure remains relatively low, ensuring the security of the payments that people and businesses make every day is a top priority for 2020.

The convergence of open banking and AI is set to also transform the user experience. Data will stream in from a multitude of sources, allowing service providers to build accurate customer personas. Financial institutions will soon be able to forecast their patterns and behaviour and build customised products more efficiently. As a consequence, consumers will enjoy faster onboarding, more personalised services and seamless authentication.

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