But along with the rise of this new, more customer-focussed, financial environment have arisen new challenges in the fight against fraud. How can you combat this effectively while reducing risk? How can you ensure that genuine customers are boarded without delay – which you need to do to protect your business in a highly competitive market, with all its tech-savvy new entrants? Is it possible to screen applicants in real time, without compromising the sophistication and accuracy of the checks and balances which apply to a slower paced approvals journey?
“A 2018 executive survey found that nearly 80% of top executives feared that their firms were at risk of disruption and displacement from highly agile, data-driven competitors. Three quarters of the executive respondents represented the largest financial services firms.”
Source: How FinTech Initiatives Are Driving Financial Services Innovation. July 10th, 2018
"40% of banks list having to make decisions based on partial/non real time data as one of their main challenges for them and their clients.*"
"32% intend to offer real time/instant payment capability in the next 12/18 months*."
Source: Ovum 2017 Transaction Banking Survey.
In a digitally-driven modern consumer environment, customers are looking for instant access to financial services. Many, especially the young, happily open a new bank account as easily as installing a mobile app. Monzo, for instance, had attracted 1,275,000 customers by December 2018, having only gained their banking licence in April 2017**. Like many of the new providers, they are fast, flexible and tech-savvy. That’s one of the main attractions for today’s consumers.
And it’s not just personal banking which is changing.
There are significant opportunities for organisations who can deliver services which give them a keen competitive edge.
The provider who can clear an application and bring customers on board fastest will often be the one which gains the business.
So how can financial service organisations underwrite business competitively without compromising on the comprehensive fraud and risk processes that they have put in place to protect themselves from financial criminals?
Despite wide spread agreement on the need to adapt systems to offer real-time availability of financial products to remain competitive, there remains many major challenges.
One of these challenges is that underlying regulatory compliance and risk mitigation systems in most large banks were not designed to work in the digital age. Many of these back office systems were designed to usher in the age of the ATM and BACS transfers – which were all innovative in their day. However, these huge systems were not built to be agile and adaptable for the requirements of today’s demanding online real-time marketplace.
So while some lenders may have been able to partially create a competitive platform by integrating their core legacy systems with third party data management systems to enable some kind of online offer - very often the supporting systems that allow a bank to engage its wider risk mitigation and compliance analysis just can’t keep pace with the demands being made on them to work in a real-time environment.
This effectively creates a significant drag on competitiveness when it comes to expanding services or launching new products – where remaining regulatory compliant and not exposing the company to too much risk is a concern.
Banks and finance providers in this situation have some important choices to make if they are to avoid becoming increasingly out of date or irrelevant to an increasingly demanding and less loyal customer base.
Do they completely overhaul their platforms, migrate to a third party completely or try to update some of their legacy compliance and risk mitigation solutions so that these services are no longer a drag on business competitiveness?
While overhauling banking platforms or migrating lock-stock-and barrel to a new platform often sounds logical, the investment decisions and risks around performing this are often highly unpalatable. Possibly one solution that poses less risk is to use a collaborative partnership that provides comprehensive regulatory and risk analysis capabilities that are capable of leveraging the latest technologies and techniques in real-time – and can still feed that intelligence back to host systems without the need for hugely expensive and risky IT investment.
Fraudsters will always seize upon new opportunities presented to them.
While wishing to deliver with a smooth approvals 'journey’ for customers who now expect an instant decision, providers need to complete regulatory checks, due diligence and Know Your Customer and the like, needed to ensure that an applicant for finance is who they say they are - and that they are acceptable. This causes a risk of losing business to new entrants to the market like FinTech start-ups who may be more agile. Though there is no guarantee, of course, that those new providers are not opening themselves up to fraud and/or customers with poor credit ratings or other factors which would normally disqualify them, they have far less to lose in terms of reputation and market share.
What is needed is accurate and actionable information, provided in real time, to accelerate customer boarding with no compromise on fraud analytic checks.
Many financial providers are effectively countering fraud with National SIRA, from Synectics Solutions. Now the service has taken a step forward to address the need for real-time fraud analysis with the enhancement of its real time service, which has already been successfully trialled in several sectors where instant decision making is commercially critical in a highly pressured sales environment.
SIRA is an all-in-one data processing platform which speeds up customer finance applications by providing ID verification, anti-fraud screening and checks which ensure that regulatory obligations are being met.
SIRA is successfully deployed by a growing number of insurance and financial service companies throughout the world.
The system brings together a multitude of machine learning algorithms and comprehensive workflow management to put real control into the hands of front line investigation teams.
With SIRA Real-Time the client’s team can board customers in a matter of seconds rather than hours or days.
Under standard batch data matching systems, clients send batches of applicant files to be processed overnight – so in the morning, they have the results. With enhanced SIRA Real-Time decisions can be made almost instantly, in as little as 5 seconds. This is a huge advantage compared to the intra-day batch system, and enables organisations to match the agility of new entrants and FinTech start-ups, whilst also applying the same level of advanced and thorough applicant checking as the legacy system.
Results are available instantly, making SIRA Real-Time users competitive in terms of real-time customer on-boarding. And there is no compromise on the sophistication and accuracy of the checks and balances which apply to a slower paced approvals journey.
SIRA Real-Time provides a seamless instant service which clears 'good’ applicants for acceptance on the spot, putting you at the forefront of financial service providers in a highly competitive and time-sensitive market. It enables you to attract custom from an evermore demanding public who expect and demand instant decision making and service - with no compromise in fraud prevention and detection. By upgrading to SIRA Real-Time, you can both protect your existing business from increasing competition, and give yourself an advantage which can help you build your market share.
For more information about how SIRA Real-Time can enhance your business, please call 03332 343418 or email info@synectics-solutions.com.