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Straight Talk IT

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Since its launch in Europe in 2007, Finovate has been a strong barometer of the technology trends that will be top of the agenda for customer-facing product innovation in retail banking and payments for the year ahead. The 2017 edition, on which the dust has only just begun to settle, was no different, and the core themes and technologies on the stage have perhaps never been more closely aligned with the immediate needs of the industry.

2017 and 2018 will be an important period in the retail banking space, particularly in Europe. The twin impact of immediate payments infrastructure and open banking initiatives (principally PSD2) will create a platform for both innovation and competition, in turn creating opportunities for challenger banks and fast-moving incumbents alike.

Unsurprisingly, there were several players demoing digital banking solutions (indeed, it's a common theme every year). However, it was the emphasis on using data aggregation across multiple providers in concert with advanced customer analytics and artificial intelligence (AI) that highlighted one of the main areas European banks will need to consider in a post-PSD2 landscape. Common applications across the exhibitors included predictive balances, improved transaction tagging (for analysis), recommended actions to improve financial management, and suggestions around new financial products to open (potentially from a "best buy" list) based on transaction histories or, in at least one example, based on a series of interactions with a digital advisor.

Improving digital product sales and customer onboarding was another important theme. The use of video chat services and co-browsing technology to assist consumers completing (or contemplating completing) application forms highlights the focus many institutions have on increasing product sales in the digital channels.

While there were many other topics covered at the show, from distributed ledger solutions in trade finance to more holistic PSD2 solutions, biometric authentication and identity verification services were the third major theme. Aligned closely with the focus on digital product sales, and embedded closely into the application workflow in several cases, the use of biometrics and broader social media scanning looks set to become more broadly applied to enhance security and KYC. The future role that banks may play in wider identity assurance services was a further area of interest.

Ultimately, what Finovate has demonstrated is the growing maturity in attitudes across the value chain. Having moved on from the adversarial tone of five years ago (when proto-bank start-ups talked about competing directly with incumbents), the majority of exhibitors spoke about successful implementations with retail banks, while Ovum's latest ICT Enterprise Insights survey finds that 80% of European banks are open to working directly with third parties to develop new products and services. More sophisticated and more rapid innovation in products and services will be the result.

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