The Record - Issue 14: Autumn 2019

79  F I NANC I A L S E R V I C E S many banks to use our services while limiting the investment, so we deploy it; virtualisation and containerisation allow for better resiliency and smoother deployments, so we use them. When newer technologies enable us to provide better solutions, we will develop and deploy them, too. And when we move forward, we will continue to ensure our community is able to move with us and embrace innovation cost efficiently.” The data-driven relationships that are emerg- ing hold great potential for organisations that can successfully leverage their data and make the best use of human and machine capabilities. “The potential and need for data analytics in the financial industry has grown dramatically over the last decade – with an even greater impact forecast for the future,” says Young. “At SWIFT, we have the opportunity to generate more value out of the broader transaction data set we manage for both the improvement of our product devel- opment processes and to deliver better business intelligence services to our customers. Increased and better use of data, along with AI and machine learning tools, are already improving screening algorithms and reducing the number of false pos- itives leading to higher rates of straight-through processing. As better data and more mature AI becomes available, manual intervention will natu- rally reduce even further. Another key issue is the need to solve the problem of missing or incorrect data – and SWIFT is leading on this, too, with its range of message validation tools.” As the domestic payments industry has trans- formed, momentum has naturally carried over into the cross-border payments. “Instant pay- ments technology in some domestic payment systems has driven global demand to be able to pay and be paid in real time, putting the obli- gation on us to meet these expectations when it comes to cross-border payments,” says Young. “Recently we have made huge strides with instant payments around the world by using our existing rails for cross-border payments to meet today’s need for speed, traceability and transparency.” The innovation that has transformed domes- tic retail payments is already facilitating huge improvements in cross-border payments. By embracing the SWIFT gpi standard in global payments, for example, Young says that banks are now sending and receiving funds quickly and securely to anyone, anywhere in the world, with full transparency over where a payment is at any given moment. Over the next few years this momentum will significantly impact the cross-border payments experience. “Translating these gains to cross-border pay- ments ismore challenging for anumber of reasons,” says Young. “More than 200 jurisdictions and 180 different currencies globally means different chal- lenges to overcome to make seamless cross-border payments a reality. Nevertheless, new technology and the demands of the global economy necessitate ever-faster, secure payments. All payments in the future will need to be instant, transparent, ubiqui- tous, and secure – account-to account, anywhere, at any time. With the help of new technology, we are creating a cross-border payments experience on par with the fastest domestic systems.” Interoperability enables innovation To optimise the benefits of cloud and AI, banks need to make sure new and existing technologies work efficiently together. “AI is taking hold across many areas of the retail banking ecosystem,” says Hans Tesselaar, executive director at the Banking Industry Architecture Network (BIAN). “One of the ways we see AI being used is to improve compliance and security in payments through the automation of KYC and AML processes. In these areas, AI would remove the human effort required to ensure safe and secure payments. Additionally, it will also work to spot anomalies and suspicious activity much better than even the most experienced of eyes.” With legacy technology still prevalent in most established banks, Tesselaar says new technology must be interoperable with existing systems to ensure the benefits of it are truly felt. “New technologies built without interoperability in mind won’t just create inefficiencies in the back end, they will also likely lead to a disjointed customer experience no better than what is already in place. For true innovation to take place, interoperability must be a number one consideration.” A collaborative, not-for-profit ecosystem of leading banks, technology providers, consultants and academics, BIAN uses the insight and expertise of its members to work out how the organisation can tackle key business challenges in areas such as payments, cards and fraud. “BIAN brings together the expertise to help banks create seamless experiences,” explains Tesselaar. “We take on the hard work around developing future-ready, internationally compliant API services because we are passionate about developing services that are fit for future customers and can help our industry thrive.”

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