Personalising the fintech experience
With digital payments now convenient for all users, the next aim for financial companies is to embrace personalised experiences
The fintech industry continues to develop at an unprecedented pace, even if it doesn’t feel that way. Behind the scenes, there are more quantities of data available and that has led to organisations focusing more on understanding their customers better.
“We’re witnessing personalisation at scale in many areas of our lives,” explained Steven Croke, chief technology officer of financial services at GlobalLogic. “We’re used to Amazon recommending purchases to us, or Netflix recommending a new show based on what we’ve watched previously.”
That said, while there is personalisation in financial services, it’s not being realised to its full potential. Croke is interested in the opportunities that AI brings to the space, and while there’s recognition of this, he states that there needs to be a resilient and robust data estate to power a richer customer experience.
There is also the challenge of modernising legacy technology, a widespread issue as it constrains the ability to personalise and offer innovative products. Addressing that is not easy, but it’s happening because it’s a business driver.
“The journey to the cloud is a key component of this,” said Croke. “This is a much more mature topic than it was even say three years ago. Different organisations of course started from different places and with different objectives and appetites: some were initially cautious, others less so.”
“However their cloud journeys started, we’re now seeing greater desire for multi-cloud solutions. Or more accurately, a desire not to be tied too closely to a single provider. There are a number of obvious benefits to that, but there are a number of pitfalls too. What we’re now seeing is far more willingness to accept the trade-offs.”
That dramatically increased pace is one of the key challenges GlobalLogic’s clients face, leading to a few things coming into focus.
The first, said Croke, is that an organisation must have a trusted partner to help them keep abreast of developments in the broader ecosystem.
“The pace of change requires organisations to maintain a key focus on changing regulation, industry changes, changing customer behaviour and so on. Having an external facing strategic partner who can bring in an external view of the landscape is essential.”
Why it’s in the news: GlobalLogic has recently developed a real-time fraud detection solution using machine learning.
The second is to deliver at pace, with adoption of agile and DevOps methods commonplace. Yet he acknowledges that long-term meaningful improvement in lead time is difficult, particularly in hybrid legacy environments where data points are not as easily measured.
“Nonetheless, we are seeing real focus in driving value from engineering excellence – continuing to improve automation, security, controls and observability with the goal of getting product delivered more quickly. Again, this is an area where we’re seeing trusted partners really adding value.”
From that, consumer behaviour has experienced a real shift, with Covid having accelerated it, now that contactless is commonplace, and cheques and cash are in decline. But there are nuances to this. In some markets, cash usage has increased due to economic uncertainty, as it can help with budgeting.
Croke says it’s not about finding new ways of paying but developing the mechanisms we already have and ensuring that they’re better suited to a broad range of demographics.
“This is going to require an increasing awareness of the customer’s spending behaviours and patterns, and tailoring the experience to their benefit.”
With more data in the industry, security must keep up with these changes. Risk management and compliance are two major requirements in financial services and the ways in which they are folded in will only improve over time.
“On the payments front, the greater structure and richer data that ISO 20022 brings offers increased opportunity for improving fraud detection,” he explained. “And then of course machine learning (ML) and AI, which has the potential to significantly uplift fraud detection.
“We recently developed a real-time fraud detection solution using ML, and I expect to see more examples in the future as organisations embrace this. Looking longer term, it’s going to be interesting to see the extent to which self-sovereign identity and decentralised methods of identification are going to play an important role.”
Croke believes that those who embrace personalisation will be the real winners in fintech. By and large, the digital payment process is quite frictionless so there are significant opportunities to personalise the experience.
“Providing insight based on the intelligence that the payment providers collect is going to be where we start to see some new and interesting payment products emerge over the coming years,” he said. “Longer term, as we get into true digital currencies, the game will change again. When we look at payments and the payment experience, the headline is that it’s all about data.”