Here are the impacts of Covid-19 on retail banking. Report Ntt Data

Here are the impacts of Covid-19 on retail banking. Report Ntt Data

All the scenarios for retail banking outlined in a Ntt Data report and Monti's words (Ntt Data Italia) to Start Magazine on the Spunta Banca Dlt project

The way banks are reacting and reacting in the near future to the Covid-19 pandemic will have repercussions not only on customers and employees, but also on the economy. In a long report, Ntt Data , a Tokyo-based multinational that deals with system integration, professional services and strategic consultancy belonging to the Nippon Telegraph and Telephone group, highlighted how the epidemic crisis of this period has "perhaps definitively demonstrated" that " the future of the banking sector is digital ”.


The reasons for this conclusion are simple: “Across the sector, banks are encouraging their customers to access banking services only through digital channels – highlighted Ntt Data -. As a result, customers are becoming increasingly comfortable with technologies and, on the contrary, are decreasing their dependence on physical branches. "


Same for Customer Care: “Having good service and reliable customer support is critical when customers are 'panicked': in the long term, consumers are unlikely to shake these habits. Digital banking facilitates consumers' lives, and they are unlikely to want to return to a banking experience exclusively face to face if their online banking experience is positive. "


"Social distancing has pushed online transactions even more, and as such, the attack zone has shifted – continued NTT DATA -. This is combined with the remote work of banking staff that interrupts standard internal processes and creates gaps in cyber security surveillance, potentially creating new vulnerabilities that can be exploited by those with bad attentions. "


“Automation and innovative fraud detection software can play a key role in this, helping banks streamline reviews of potentially fraudulent activities. Banks could also consider new security protections, such as multi-factor authentication to protect access points to the system and to invest in enhanced cybersecurity infrastructures – keeping customers and their staff safe online.


Mobile wallets “can be a huge resource for banks and a useful differentiator, as customers and potential customers make the long-term transition to digital-first banking. In addition to generating new business, mobile wallets help generate customer data streams that can be used to improve or create new services and offers. They also provide banks and their customers with better protection and control against fraud, "stresses the report.


“This crisis is undeniably accelerating the already significant adoption of contactless payment technologies. The World Health Organization has advised to switch to contactless payments whenever possible and, if the use of banknotes is inevitable, to wash hands immediately after contact. Worldwide, 47 countries have so far increased the limits of contactless payments, with the aim of streamlining purchases and reducing the amount of physical contacts involved in transactions. In the UK, the limit has been raised from 30 to 45 pounds, and across the euro area, the limit has been raised widely from 25 to 50 euros. If the banks have not already made contactless, this is certainly the right time ".

“Even now, there are clear signs that this transition to contactless is influencing consumer behavior. In the United Kingdom, for example, the blockade led to a 60% drop in the number of withdrawals from ATMs and the use of the payment card increased with online purchases, especially for shopping. A poll conducted by Link, who oversees the UK ATM network, suggested that 75% of people use less cash, 54% avoid cash altogether, and 76% plan to use less cash and switch instead to other forms of payment in the next 6 months. Maybe we are entering a world where the future of cash itself is at risk, "stressed the Ntt Data report.


But with Transaction banking, will there be more integration or more competition between incumbents and new market players? Andrea Monti, Head of Banking of NTT DATA Italia, replies to Start Magazine: “In the retail world, banks and fintechs have often competed. There are examples of collaboration but, in most cases, fintechs have posed themselves as an alternative to traditional banks. Then many start-ups grew and began to develop features that included or simulated the corresponding features of traditional banks and today we find ourselves with a saturated panorama of competitors and a choice that is really difficult to evaluate, especially as regards differences, or advantages between one bank or another, whether traditional or not ". In the Corporate world – adds Monti – “the situation is a bit different, because fintechs have focused more on collaborative models: they have tried to develop functionalities that were useful to end customers but that could be provided by traditional banks. A cooperation ecosystem has developed better which, finally, manages to give substance to the context of Open Banking. And traditional banks find it advantageous to use the ideas that have been developed externally, being able to combine the creativity of fintechs with the experience and expertise of traditional banks. And it is also an advantage for customers who can benefit from the ability of fintechs to listen to customers to identify new business opportunities ". “So – says Monti – I believe that in the world of transaction banking the trend will be towards greater integration and wider collaboration between traditional banks and new market players.


But what will the role of biometrics be in financial services? “The subject of biometrics is very delicate – responds the Ntt DATA Italia Banking Head – Clearly there is a need for security, especially in the transactional sphere; and biometric data are the most "secure", from a certain point of view: they are unique, very complex to copy or clone and are always available and "comfortable to carry". But the downside is really critical. Because if we were to create an archive of biometric data we would also have the certainty of total inviolability. If they steal my password, I can always invent another one. But if someone were able to clone my fingerprint or retina, rather than to map my vocal timbre, I would have no way to replace them and that "password" would be lost forever. It is clear how important it is to carefully evaluate whether or not to use this type of "key" to manage data or transaction security ". "Personally – continues Monti – I believe that the use of alphanumeric passwords is still valid and that the real turning point will be in the protection algorithms, that is, in the plausibility scenarios that an artificial intelligence system will be able to attribute to my operation, information or dispositive that it is. Already today these systems are used to limit payment card fraud and the operation is increasingly accurate. By combining these analyzes with traditional passwords, the level of security is still guaranteed. And possibly we can limit ourselves, for convenience, to use biometrics in a marginal way, as happens today, for the fingerprint or face recognition, keeping the information on the device ".


Ntt Data is one of the partners of the Spunta Banca Dlt project, as can be seen from a recent note from the ABI. “The Spunta project – explains Monti – is the first blockchain project in the world involving an entire banking sector, nationally. And the protagonists of this story are 4, all fully involved and with a decisive role in the success of this initiative. First of all there is AbiLab, which was the promoter of the initiative and which also follows the coordination of activities and external communication. Then there is Ntt Data , which developed the application in all its parts, tested it and brought it into production; and which is in charge of its maintenance and evolution. Then there is Sia, who made the infrastructure available and manages it; and finally there is R3, which provides the blockchain nodes. The project would not exist without any of these 4 actors ". Monti concludes: “The project foresees that there will be a third and final wave of bank migration in October. And in the meantime, we are continuing to develop new features and improve existing ones. We are very satisfied with the result achieved and, personally, I believe it is an important demonstration of the fact that collaboration between companies represents the true winning model ".

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Sat, 13 Jun 2020 05:00:15 +0000.