Banking informatization trends

Main article: Trends in the IT market in Russia

2024: CBR names digitalization trends in payments

Payment instruments and financial market infrastructure are transformed under the influence of changing needs and expectations of the population, business and the state. At the same time, new technologies, as well as regulatory initiatives, play an important role in the development of this area. This is stated in the analytical report of the Bank of Russia, submitted on June 5, 2024.

It is noted that Russia is included in the list of leading countries in the penetration of financial technologies and the growth rate of non-cash payments, the share of which reached 83.4% in 2023. Stable and uninterrupted provision of payment services, as stated in the document, contributes to a steady increase in consumer confidence in modern payment instruments and cashless payments. The Central Bank of the Russian Federation has identified key trends in digitalization in the payment sector.

1. National Payment System (NPS) Regulation

Promoting the introduction of promising technologies into the payment sector remains an urgent task in the development of regulation in the NPS. In addition, regulatory measures may be required to improve competition in the domestic payment market. Regulation takes into account the tasks of developing national infrastructure and protecting consumer rights and creates legal conditions for innovation.

2. Mobile contactless payment

In Russia, as well as around the world, the availability and widespread use of smartphones and mobile communications have formed a steady demand for mobile contactless payments. As of 2024, the development of the segment of mobile contactless payments and acquiring continues in the Russian Federation - both through the replacement of departed foreign payment services, and by expanding functionality focused on current business trends in the economy: this is the growth of e-commerce platforms, the active use of courier delivery, etc.

3. Open APIs () API

The technology will provide seamless information interaction between banks and other participants in the payment market. Among other things, it is planned to create a single window for payments: it will provide the opportunity to make payments and transfers from their cards or accounts in a single interface, regardless of which bank they are open in, as well as receive information about balances and previously performed transactions.

4. Express Checkout

In Russia, the development of the fast payment system (SBP) continues. As of the beginning of 2024, more than 220 banks, as well as over 1.5 million trade and service enterprises, were connected to it. In the future, it is planned to develop and expand the use of SBP opportunities for business and government payments. Fast payment services will take greater advantage of new technologies, such as biometrics.

5. Interoperability and use of ISO 20022

This standard is specially designed to unify the interaction of various systems and processes in the financial sector and is used in more than 60 countries around the world. The standard describes the methodology for developing models of information exchange in financial transactions. Extensive work has been done in the Russian Federation to prepare for the transition to ISO 20022 in the NPS.

6. Distributed Registries and Smart Contracts

These tools are used to improve the efficiency of a number of services, such as letters of credit, factoring, escrow, etc. Distributed register technology is often used in digital financial asset information systems (DFAs). Smart contracts are also widely used in the CFA market, for example, to automate monetary settlements.

7. Digital ruble

The introduction of the digital ruble provides a number of advantages for citizens, businesses, financial market participants and the state. Among them - reducing the cost of operations; creation of innovative, convenient and profitable products; access to the digital ruble account through any financial institution in which the client is served; a new cross-border settlement mechanism.

8. Development of cross-border payments

The Bank of Russia and payment market participants are working to expand the ability to make cross-border payments and exchange financial information through infrastructures and solutions independent of global ones. Dialogue continues with partners to preserve and expand the infrastructure for accepting Mir cards abroad.

9. Artificial intelligence

Such tools are used to improve the services provided to customers and improve the processes in the payment sector. In addition, AI tools are used to identify fraud, automatically collect and analyze large amounts of heterogeneous information.

10. Virtual and augmented reality payments

These technologies are used by banks mainly for advertising purposes or training projects. Some Russian companies have implemented payment reception and processing services for the gaming industry, which are used, among other things, by large foreign publishers of computer games.^[1]

2023: Top 5 IT trends in financial sector named

On February 27, 2023, Gartner named five key strategic initiatives in the financial sector for successful business development. It is said that amid macroeconomic uncertainties, managers are forced to continue to optimize financial models.

To help CFOs better manage and lead in a challenging environment, Gartner conducted an annual survey and identified top finance priorities. Top of the list is the transformation of the entire financial system, but many directors also prioritize technology and a human-centered approach. This will prepare the organization for economic instability and at the same time provide new opportunities to improve profitability.

Priority# 1: Financial Transformation and Organizational Change

In a recession, the powers of the finance department are expanded. Given the large number of competing business priorities, cost control efforts, ongoing technology initiatives, and many service delivery options, CFOs should invest in transformation, artificial intelligence, and autonomous digital projects. This will make the financial institution more economical and provide accelerated growth. To achieve transformation, you need to determine the right priorities and involve specialists in the right areas.

Priority# 2: Data and Analytics Strategy Development and Optimization

According to Gartner's forecast, 50% of Financial Planning and Analysis (FP&A) heads will implement an enterprise-wide data strategy by 2025. It is noted that financial executives need to increase their role in corporate data and analytics management (D&A), as well as improve their understanding of the basic concepts in the relevant area. Otherwise, the implementation of the D&A strategy can be transferred to the IT department.

Priority# 3: Optimizing Costs to Drive Growth

In the current macroeconomic environment, solely planning how the company will use its capital is no longer enough. CFOs should add the "principle of activity" to their more traditional attempts to optimize fund allocation processes. The essence of the concept is that senior management and business partners are actively redirecting capital flows to respond to changes.

Priority No. 4: formation of more social relations between the employer and the employee

The current realities and hybrid work pattern have changed employee expectations and how leaders should approach their core responsibilities. To succeed in this new world, financial executives need to rally employees, rebuild unity and move in new directions. To do this, you have to form a new social culture focused on the person. This approach will help unlock the potential of workers.

Priority# 5: Development of Financial Department Technology Strategy

While investment in technology is on the rise, the data shows that only 30% of technology projects have been successful. Existing complex and disparate sets of legacy technologies make it difficult for financial groups to decide which to favor and what opportunities to invest in. Therefore, managers should develop a composite strategy and a clear plan in the field of financial technology: this will help transform the technological landscape into an ecosystem of modular building construction blocks of applications. This approach will provide a more flexible and business-oriented financial organization.^[2]

2022: Forrester Research: How IT is changing the banking sector

At the end of February 2022, analysts at Forrester Research presented the results of a study in which they revealed the details of the transformation of the banking sector through information technology.

According to Forrester analyst Aurelie L'Hostis, the period of the coronavirus pandemic COVID-19 has accelerated the digital transformation in the banking sector, but talk of the "disappearance of cash" has once again been exaggerated. In his opinion, at the end of February 2021, digital channels dominate.

Innovative participants are changing the landscape of the industry

Despite the fact that some of the worst forecasts for the pandemic did not materialize, banks still face long-term pressure on revenues and tougher competition, L'Ostis notes.

She adds that banks feel pressured to act on sustainability principles. And while the big banks are accelerating their plans to close branches, digitizing their expertise and launching new products, the new entrants are focused on doubling down on innovation, creating new business models to launch the next wave of transformations.

Challenger banks are back in vogue

According to the Financial Conduct Authority, 8% of current personal accounts at the end of February 2022 are held by digital challenger banks, up from 1% in 2018. Forrester Analytics data shows that 40% of online users in the adult population Great Britain are considering banking with a supplier that does not have divisions. Digital banks are also actively infiltrating the small and medium-sized business (SMB) banking market, forcing banks and lenders to tap into the emerging trend.

In early 2022, four digital banks focused on small and medium-sized businesses: Brex and Novo from the United States, KoinWorks from Indonesia and Qonto from France raised a total of more than $1 billion to create credit platforms that complement credit cards and business accounts, expense management tools.

Inclusive funding has become a hotbed of innovation

Forrester says there is a new generation of fintech using mobile technology, open data access, artificial intelligence and machine learning to implement innovative business models targeting underserved consumers. In 2021, Nubank, one of the world's largest digital banks targeting low-income customers in Latin America, increased its customer base by 62%, bringing the total number of customers to 48 million in Brazil, Mexico and Colombia. In Africa, digital-savvy, non-banking or underbanked consumers, who have been largely ignored by traditional lenders, are turning to fintech start-ups such as Chipper Cash, Flutterwave, OPay and Wave.

Fintech on the green wave

Sustainability is a new reality, according to Forrester. Various environmental, social, governance-oriented and sustainable investments by fintech companies have entered the market to serve customers with values. In the US, digital bank Aspiration allows customers to measure their environmental impact through a personal sustainability assessment based on where they spend their money. In addition to banking products, Aspiration offers users solutions that allow them to invest in companies that do not use fossil fuels 100%.

Banks are improving their IT for innovation

Forrester found that technology strategies and lack of resources hindered banks' efforts: 25% of bank decision-makers believe their company's technology strategy is one of the biggest challenges in implementing digital transformation. 25% also say that employee time spent on digital transformation in addition to their other work duties is also a problem.

To meet the needs of future customers and the rapidly changing financial landscape, banks must change and restart their strategy, "analysts said. - The economy of the next decade will force banks to adopt a technological strategy for the future that provides unprecedented levels of adaptability and resilience, or fail[3]

2021

Wells Fargo: 100 thousand bank employees in the world will remain on the street in 5 years due to automation

In early October 2021, Wells Fargo analysts predict that technology could displace more than 100,000 bank jobs by 2026. The bank sent a 110-page report to its customers detailing the potential impact of digitalization on Wall Street and its workers.

Speaking to Bloomberg TV, Wells Fargo managing director Mike Mayo predicts that two-thirds of back-office jobs and a third of front-office positions are likely to be affected. He notes that working in the back office remains a difficult task.

While the banking sector has played a huge role in the economy for decades, thousands of frontline workers in the industry are likely to play a smaller role as their jobs succumb to automation in the next few years, the report said.

About 100,000 jobs could disappear over the next five years as major American banks invest more in digital banking and other technologies, Wells Fargo analysts predict. Positions that could disappear include branch managers, call centers staff and operators. Artificial intelligence (AI), cloud computing and robots will play an increasing role in everyday banking functions such as accepting payments, approving loans and detecting fraud. The disappearance of such jobs could match the massive decline in manufacturing jobs in 1980-1990, according to Wells Fargo.

Our conclusion continues to be that this will be the largest reduction in the headcount of American banks ever. Branches are likely to decline, especially given the wider adoption of digital banking services during the pandemic. Many branches that were closed during the pandemic are likely to remain closed forever, Wells Fargo said in a statement.

Consumers should expect a decrease in the number of bank branches across the country, and those that remain are likely to shrink in size. The banking industry has been shrinking for years as small and medium-sized banks are acquired by larger institutions.

The COVID-19 coronavirus pandemic is accelerating automation in some sectors, especially in industries that have difficulty hiring workers. For example, the restaurant business has become one of the most prominent implementers of robots and other technologies.^[4][5]

Key trends in banking digitalization

The difficulties of 2020-2021 led to a number of changes in the processes of digitalization of Russian banks. Tasks related to remote work and remote services came to the fore. In addition, other areas have evolved evolutionarily - more and more penetration in banks is received by AI-based solutions, the need for data analytics and the need for its own light and flexible systems are growing.

Optimization of remote work of bank employees

Due to the general regime of remote work during a pandemic, banks had to sharply rebuild their infrastructure to create remote jobs and online communications. In general, after some confusion at first, they coped with this task. Now is the time to optimize infrastructure due to the partial return of workers to offices, the reduction of space rented by banks and the accumulated experience of remote work.

Depending on the bank and division, access to the banking system is carried out through remote access to its working physical computer, through virtual servers and desktops, through the cloud and cloud applications, - explains Yuri Terekhin, Director of Financial Institutions, FORCE - Development Center (FORS GROUP). - An effective combination of these methods, taking into account the available infrastructure, software licenses, security systems, the volume and structure of the bank's operations, will remain a significant trend in bank automation this year.

Sergey Parfyonov, technical director of Fuzzy Logjik Labs, adds that in connection with the transition to "remote work," both business processes and access control systems have changed.

There are new needs, for example, in the use of wireless channels, remote identification... With such hybrid technologies, the question became how to properly ensure the protection of personal data in the face of increased authentication and authorization requirements and fulfill the 152-FZ conditions. At the same time, we must not forget about fault tolerance and a high level of system automation. And this is a transition to another level of security, - he explains.

Growth of online operations

This trend is not new in banking informatization, but it has accelerated significantly due to the transition to universal "remote." The field of mobile payments through various payment systems has grown especially (the Central Bank's Fast Payment System, Google Pay, Apple Pay, Samsung Pay, Sberbank, etc.). In addition, during the "removal," many tried stock trading, as a result of which the number of IIS and brokerage accounts opened through banks sharply increased. The number of mortgage and consumer loans, guarantees and letters of credit issued online has also increased. Accordingly, the nomenclature of documents that customers and banks began to exchange online has increased.

This trend will continue to develop, because during the pandemic, consumer habits have changed, which banks are forced to take into account - both when automating banking operations and when setting up their CRM systems for marketing campaigns and communicating with customers online, - comments Yuri Terekhin.

Easier access to bank services

The development of bank-client interaction systems is now aimed at maximizing access to bank services.

Bank-client interaction systems are a whole range of communication products that have grown out of a telephone contact center with "live" operators, and today and, moreover, tomorrow is a universal communication environment in which you can have access to banking services and operations through any online mechanism, ranging from a voice call, to instant messengers with mass introduction of speech recognition systems based on biometric authorization. All this is aimed at simplifying access to the bank's services. A modern bank is unthinkable without such systems, "says Vladimir Leonov, technical director of the AMT G ROUP.

Development of remote sales channels

Another trend, which is highlighted by a number of experts, is associated with the development of remote sales channels. This includes, in particular, telemarketing, the development of digital electronic signatures and paperless document management, as well as security systems and biometrics.

Remote sales have become, in fact, the only possible ones in 2020, and the presence of their own telemarketing with the ability to guarantee high-quality communication and reaction to the client's wishes is the key to good sales. Therefore, some banks actively invest in their own platforms, complementing them with their call analysis systems, real-time prompts, knowledge base and other functionality.

With document management, a similar story - the inability to sign paper documents activated the trend for a paperless approach to document management with clients using electronic signatures and biometric verification. It is clear that this is the future and this will significantly simplify and speed up the basic operations of registration of bank services. By the way, in 2020, all our largest customers switched to EDO with their suppliers, - says Alexander Filippov, director of business development at the IT company CROC in commercial banks.

Sergei Kosetsky, commercial director of X-Com, believes that the classic service offices, despite the conservatism of part of society, will gradually fade into the background, and in the future they will completely move into a virtual environment.

The continuation of this trend will be the further development of a single biometric system and the inclusion of most banks in it. This will contribute to an increase in customer confidence in digital banking services, and the costs of introducing systems for storing and processing biometric data in the medium term are compensated by commissions from an increase in the number of online payments and transfers, the expert said.

Fighting scammers and hackers

During the pandemic, the number of hacker attacks on banking systems and fraudulent attacks on bank customers has sharply increased. According to the Central Bank, the losses of banks and their clients increased 1.5 times in 2020. Moreover, attackers often change the methods and objects of attack: from the bank-client system for legal entities to mobile applications for individuals, from calling potential victims on behalf of banks to letters on behalf of the Central Bank, Sberbank or the Ministry of Internal Affairs.

With the development of bank-client information systems, fraudsters will increase attempts to use social engineering methods and complex hacker attacks not only on the bank itself, but also on client means of accessing an account from a PC to a smartphone. In this regard, artificial intelligence mechanisms are now actively developing, which are used to prevent such intrusions and fraudulent operations, - says Vladimir Leonov, technical director of the AMT GROUP.

Sergey Parfyonov, technical director of Fuzzy Logjik Labs, believes that cybersecurity will require quite significant investments from banks in the coming years.

The further the process of informatization goes, the more the question arises of the safety of data and their processing. At the same time, an unambiguous trend is the development of Russian DLP, SIEM, anti-fraud and cryptographic systems. What can not be said about developments in the field of network security, - he notes.

Yuri Terekhin from FORCE - Development Center adds that technologies for combating hackers and fraudsters should be constantly developed and strengthened by strengthening information security systems, modifying and updating technical and software tools in a timely manner, using non-standard methods using artificial intelligence, attracting mobile operators, educational work with the population, "white" hackers, etc.

The improvement of hacker software and the presence of a large number of vulnerabilities in operated systems has led to the fact that attacks on bank customers can be carried out by an increasingly wide range of people who do not have deep knowledge of the IT field. Therefore, the number of hacker and fraudulent attacks will only increase, and the fight against them will be more relevant than ever before, the expert believes.

Broad reconciliation of artificial intelligence technology

Experts notice the demand by banks for various solutions that use artificial intelligence and machine learning technologies.

Sergey Parfyonov, technical director of Fuzzy Logjik Labs, explains that banks are becoming conglomerates of huge amounts of information and they need such a ready-made fintech product that will further reduce costs and increase profits, so artificial intelligence, processing huge amounts of information and their correct application in terms of targeting banking products is what interests them now.

Nikolai Podstrelov, Marketing Director of Digital Design Group of Companies, adds that artificial intelligence technologies are already widely used in end-to-end processes for forming client experience: in marketing (cross-sales and individual offers for clients, targeting advertising requests, etc.), in service (scoring, chatbots and voice assistants, search for anomalies in client documents) and in back-office processes (compliance, risk management, intelligent document processing, etc.).

Go to Data-Based Management

A distinctive feature of the digital age is the exponential growth of data volumes. According to IDC, the volume of the digital universe in 2020 amounted to 59 zettabytes of data. For many banks, the priority direction of digital transformation is the transition to data driven management. As a result, Big Data and data analytics receive a new carte blanche.

For corporate data warehouses, the practice of using which in banks has exceeded the 20-year milestone, an analytical renaissance is coming. They find new applications as platforms for the digital modernization of risk-based profitability management processes and to support the regulator's data-centric initiatives. The transition announced by the Bank of Russia in February to collecting data from credit institutions based on a single data model aims to reduce the burden on credit institutions, ensure multi-purpose use of data and gain new opportunities for analyzing data through their unification and transparency, "says Yulia Amiridi, Deputy General Director for Business Development at Intersoft Lab.

Total personification programs

Knowing the history of interaction with the client, his income and expenses, banks offer ready-made solutions (for example, a car loan with a payment plan), which is more effective than the same type of advertising.

For example, a bank can make personal offers using recommendation systems. They are still based on accurate algorithms (such as age, income), but the "real" ML systems are not far off, the company believes. SimbirSoft

In the future, these will be total personification programs. For each specific person and for each situation, in each client's location, the bank will be rebuilt and show relevant offers.

One of the tools for such personification is superapps. A personalized approach requires huge calculations of artificial intelligence, the requirements for "AI hardware" will constantly increase, and hybrid clouds will help cope with seasonal spikes in demand, "says Yuri Geronimus, Deputy Director of the Department of System Software Solutions at I-Teco.

Import substitution

It is expected that in the near future the government will submit for approval to the president a draft Decree on the transition of critical information infrastructure (CII) facilities to Russian software. After its approval, import substitution will become the main trend in the banking informatization market in this and subsequent years.

One of the most pressing issues for the industry is the timing of the transition to domestic software and equipment. Taking into account the fact that the share of foreign software in banks, according to the Association of Russian Banks, in 2020 exceeded 90%, the task of import substitution will receive the highest priority in credit institutions, "said Yulia Amiridi, Deputy General Director for Business Development at Intersoft Lab.

Andrei Fomichev, Deputy Chairman of the Board of the CFT Group of Companies, notes that the CFT has long been actively working in the direction of import substitution. Thus, thanks to the work done earlier, applications appeared in CFT-Bank that make it possible to use various databases.

Multi-platform systems, which, along with, for example, DBMS Oracle are compatible with DBMS Postgres Pro , are poorly represented on the market, but CFT is now conducting pilot projects with large banks and a large energy company, involving import substitution and the transition to Postgres, the expert clarifies.

Ecosystem development

Banks go beyond their main activities, creating ecosystems of various scales and integrating with the maximum number of external services.

The world moves to complicate systems, and at the same time the boundaries between the usual spheres are erased. It is not only fintech companies that are beyond the usual limits of their industry; actively expands its borders retail, which launches its own banking products, - said Vladimir Shabason, director of strategy at Salf Soft Production.

Development of own software

A number of experts call the transition from the use of industrial monolithic systems to the development of their own software as a key market trend. First of all, it is the creation of light, flexible and fast-adaptable systems based on modern microservice architecture, best practices and cloud computing.

Russian industrial manufacturers of banking software, who did not expect such a revolutionary change in the approaches and needs of the banking business, largely lagged behind current technological trends. Having saturated the market with software ten to fifteen years ago, they have long occupied their niche to a greater extent due to the general conservatism of the financial industry and the scale of the use of their monoliths by customers, "says Andrei Ezrokhi, vice president and director of strategic business development at Bell Integrator.

As for foreign manufacturers, here, according to the Bell Integrator expert, the situation, although more variable, is complicated by the fact that the largest banks with state participation are somehow aimed at import substitution, where possible, for quite obvious reasons. But it was they who were the anchor clients of foreign companies - developers, providing them with a confident presence in the Russian market.

In fact, for most serious banking players, there is simply no other opportunity left but to independently develop software that will meet their current needs and market situation. Large banks are forced to create their own software companies, both virtual, based on their own IT services, and quite full-fledged, says Andrei Ezrokhi.

Growing IT Need

The need for IT professionals capable of implementing next-generation information systems continues to grow.

Thus, the trend for internal training and development of specialists, professional and methodological support of them in the process of work, coaching and raising personnel is obvious. With this request, banks are increasingly going to specialized integrator companies, and we always readily support our clients with our expertise, "explains Andrei Ezrohi.

Andrei Sykulev, CEO of Cinimex, adds that almost all banks are growing their IT staff, and this, in turn, leads to a "warm-up" of the HR market, an increase in wages, and, as a result, to an increase in the cost of IT in general.

In fairness, it should be noted that the situation is observed not only in the financial industry. Similar processes occur, for example, in retail, which fuels the shortage of qualified specialists and the rapid growth of IT salaries, - said the general director of Cinimex.

2020

Demand for advanced digital technologies amounted to 55.5 billion rubles.

According to ISIEZ HSE estimates, the demand for advanced digital technologies in 2020 was estimated at 55.5 billion rubles. with a growth prospect of 25 times by 2030. Thus, the financial sector is one of the leaders in the development and implementation of technologies. The HSE announced this on December 2, 2021.

The top three in the studies (Table 1) and in the market (Table 2) included technologies, and e-commerce blockchain. cyber security The only technology that has competed with them in the index of significance - - biometrics ranks third in the ranking of world studies. fintech

"Platforming" is developing intensively - the transfer of financial technologies to comprehensive online and ecosystem solutions in order to simplify, speed up and reduce the cost of consumer access to goods and services. New electronic payment systems use cryptocurrencies and digital currencies of central banks. Financing is carried out using crowdfunding platforms. E-commerce volumes are growing.

A separate niche was occupied by technologies for monetizing personal data and user profiles. The possibilities of introducing targeted offers are expanding, including pricing and the formation of customized packages of products and services. Service models for providing resources, for example, Bank-as-a-Service (BaaS), have become widespread. Open banking is developing on Open API platforms.

The pandemic has led to shifts in demand for financial technologies: the need for remote means of payment has increased, which, in turn, stimulates research activity in the fields of electronic trade and digital currencies, the development of technologies to ensure their stability, speed and security. So, for the period 2018-2020. the number of sources covering research on blockchain technologies, e-commerce and cybersecurity is stagnating in the world, while in Russia, on the contrary, it is increasing.

A number of technologies show a co-directed increase in importance in the Russian and world ratings. First of all, national digital currencies: the direction of new payment instruments, on which the efforts of state institutions and central banks are focused. The importance of financial instruments for sustainable development is also steadily growing in both ratings.

A significant coincidence of the list of top technologies in the Russian and international rankings is noteworthy, which is due to similar needs formed in the financial sector in Russia and abroad.

The increase in the share of e-commerce in trade turnover required the accelerated introduction of technological solutions. The importance of this area is reflected in the market agenda (Table 2).

The simultaneous development of payment means (3rd, 6th and 10th places in the world ranking), financing instruments (4th and 9th), platform and cloud solutions (7th and 8th) indicates the penetration of financial technologies into related sectors and the emergence of qualitatively new business models in them. The central element of the provision of digital financial services is mobile applications and open APIs, on the basis of which application solutions are formed, which are in demand by the market.

In general, market and scientific trends show similar dynamics. Against the background of the consistently high importance of more mature technologies (e-commerce, cybersecurity), interest in relatively new areas, such as digital currencies of central banks and financial instruments of sustainable development, is actively growing. The importance of the "digital ruble" (8th place in 2020) in the Russian market agenda has increased especially sharply, whose indicators in previous years were extremely low.

Modern architectural IT solutions for banks and the evolution of Legacy solutions

Key Trends in Bank Payment Protection

Financial institutions are the most secure economic sphere in terms of information security. The reasons are obvious - the risks of economic losses in the case of cyber incidents are direct and observed. At the same time, financial institutions have sufficient budgets and motivation for the qualitative development of IT and information security systems. Nevertheless, information security incidents related to illegitimate transactions are currently common and do not lose their relevance. The author of the article "The main trends in the field of bank payment protection" considers which processes are now at risk, and which are already quite thought out, and their risks are currently minimized. Read more here.

Top 10 trends in neobank transformation for 2020

The international consulting technology company Accenture presented 10 trends that will determine bank business development in 2020. This TAdviser became known on March 6, 2020.

Accenture analysts compare the situation in the industry with weather changes. Despite global warming, some cities may experience abnormally cold weather. Also in banking, long-term, well-predicted trends are combined with rapidly emerging "natural disasters." The main trends of 2020 are interconnected with each other: some of them will become a continuation of pre-existing trends, others will strengthen or weaken their effect.

1. Revision of the digital agenda. From cost reduction to revenue search

As part of 2019 research, Accenture confirmed a direct correlation between the level of digital maturity and the profitability of banks. Moreover, the gap in performance between tech leaders and banks lagging in the digital race is widening. However, even digital leaders in the banking market have potential compared to technology sector companies. In addition to building more cost-effective and low-cost business models, they must find ways to earn money in a low interest rate market.

They have yet to prove that by improving the customer experience, building personalized real-time interaction and developing Open Banking products and services, they will be able to gain market share from less developed players and provide double-digit revenue growth rates.

2. Only the best among neobanks will be able to convert attracted customers into profit figures

The collapse of one of the most promising startups, the WeWork coworking network, in 2020 will affect the fintech market. While leaders among traditional players are expected to grow significantly in terms of revenue, emerging players in the market will have to demonstrate that they are able to earn on attracted customers. Another recent Accenture study found that more than 18m accounts have already been opened in non-banks in the UK alone (this figure has grown by 35% in just six months). However, most are "second" accounts with low balances and two-thirds of their holders do not close their main accounts with other banks. According to Accenture, 2020 will not be easy for young players - and it is not yet clear which of the models will be able to provide a decent level of profitability: lighter, lower-cost digital versions of traditional banks, or alternative data-centric banking services "by subscription" (if non-banks manage to rethink and implement them better than bigtech players).

3. For medium-sized banks, M&A is becoming more relevant

In Western markets, 2019 was a year of mergers in the payments segment (Fiserv/First Data, FIS/Worldpay, Global Payments/TSYS merged). This is a natural market reaction to industry trends where payments become instant, invisible and free, and economies of scale and integration with banking systems become critical. A similar trend is manifested in the brokerage business in the American market, under the influence of "pushing" commissions by neo-players. In 2020, analysts expect another merger and acquisition among traditional banks, such as the merger of SunTrust and BB&T into the resulting Truist organization. The main reason is that in many markets, midsize banks are struggling to grow: they have neither the leverage of scale nor the investment to fund breakthrough innovation, and so both industry giants and young players are taking their revenue.

4. Smart tools turn account managers into "superheroes"

Despite all the talk about artificial intelligence and robotization, banks really need smart and inventive employees who are ready to increase the efficiency of their work using technology. In 2020, commercial banks will receive more returns from account managers using continuous decision support systems from attraction to customer service. Interpersonal skills such as industry knowledge, empathy and negotiating skills will remain important. But more often they will be strengthened by artificial intelligence technologies, allowing you to save scarce time for personal managers due to the platform of scoring solutions built into CRM, personalized recommendations and tips, and commercial analytics.

5. Open banking transforms' data lakes' into 'data rivers'

The development of Open Banking technologies around the world leads to a discussion about distribution rights data about bank customers. In particular, in,, Australia, and in the Brazil Hong Kong future, To Canada customers will gain control over how their data is distributed. Under these conditions, banks must show that they can not only be trusted to aggregate information about customers, but that they can create additional value by using this data to take care of the financial "health" of the client. By providing data, customers can receive insurance car reduced rates or, for example, installments when buying a washing machine. Data exchange will also form the basis of the resulting business models - such as the British one for startup calculating and selecting Mortgage mortgage credit Gym.

6. The purpose-driven banking era may begin

In 2019, in developed markets, the trend towards the "conscious" choice of companies that create value for the whole society has gained even greater popularity. In Europe, many banks have included a reduction in carbon emissions and steps to increase social responsibility in the list of key business goals, and investment players have increasingly offered "green" funds and portfolios of securities. 2020 will show whether this approach will stop at the level of statements, or business models based on missions and values ​ ​ will really change the face of the banking industry.

7. Banks begin to donate commission income to build more trusting relationships with customers

Banks' commission income continues to decline in the long term. In 2004, non-interest income accounted for 46% of all operating income of American banks - for 2020, this figure decreased to only 30%. This drop would be even more significant if bank customers did not make ineffective payment decisions. However, fintech companies and other market players are using artificial intelligence to reduce the number of "bad decisions" that make customers overpay. 2020 will bring us closer to answering the question of whether large banks are ready to abandon commission income in favor of creating trust between the client and the bank. This is the case, for example, for the online bank Bo, created by the British financial group RBS, which helps customers pay less, minimizing inefficient spending and illiterate financial decisions.

8. The time is coming to carefully monitor the quality of loans.

The quality of the loan portfolios of the 200 largest banks in the world was best in 2014, but from that moment on it gradually decreases: the volume of asset impairment losses increases by several percentage points each year. This trend is growing against the backdrop of the end of fertile macroeconomic conditions at the global level. Impairment losses are projected to grow at an annual rate of 5-6% through 2022. The pressing question of 2020 is how much the structural changes that have taken place in the global financial industry since the "Great Recession of 2008" will be able to affect these figures.

9. The role of digital currencies is changing

Facebook's Libra digital currency was one of the most interesting big tech experiments of 2019. Nevertheless, despite the active promotion, digital currencies remained away from the main financial services, and were considered mainly as a speculative asset. In 2020, the situation may change: the People's Bank of China, after 5 years of development, is preparing to launch its own digital currency. In most developed economies, there are two types of money: cash bills and banknotes in circulation and records in bank accounts. In 2020, we may see a third: central bank-issued tokenized currencies, which are used as a means of settlement between partners.

10. Young market players will ditch the term Challenger ("challenging")

In 2019, Accenture revealed a tendency to abandon the term "platform," so due to constant use in different meanings, it lost its meaning. In 2020, the same happens with the term "challenger" popular in English sources in relation to alternative players. He does not describe the entire range of market players, the number and role of which in the market has already increased significantly. Therefore, Accenture analysts recommend not using this term in the strategic documents of banks, but using words that more accurately describe the business models of players.

Not all trends that manifest themselves in global markets will become noticeable in Russia in 2020 - this is due to the competitive landscape and regulatory specifics of the market. If the search for sources of profit through digitalization and the practical use of artificial intelligence technologies are on the agenda of many Russian banks for more than a day, then trends in the redistribution of the market in favor of neobanks, the growth of M&A (if we do not take into account the absorption of rehabilitated players), and value-based banking are less relevant for our market. In 2020, in our market, we can expect further development of the topic around open APIs and Open Banking using advanced data. And the emergence of digital currencies of regulators in other markets may create interest in this topic in Russia - although this will not entail any specific consequences for the market. In general, our practice shows that many global trends related to the development of technologies appear in the Russian market quite early - and together with local specifics and regulatory initiatives can create opportunities for market participants, notes Maria Guseva, Director of Management Consulting Practice for Accenture Financial Sector in Russia

The main fintech trends in the banking industry are named

At the end of January 2020, the consulting company Capgemini presented a report on 10 major trends in the banking industry in 2020.

Employee training

Banks need employees who are ready to adapt to the ever-changing technological environment. Banks compete for employees not only among themselves, but also with fintech startups, as well as with tech giants like Google and Apple. Therefore, banks began to actively train their employees in new technologies: for example, JP Morgan invested $350 million in a new educational program.

POS loans in partnership with fintech companies

Banks are switching to a more convenient loan system using fintech startup technologies. POS lending (issuing loans for certain goods directly in retail outlets) takes place almost imperceptibly for the client and is not accompanied by a commission. At the same time, a convenient system attracts more and more new buyers, so sellers also win.

Remote lending

The largest banks have adopted a winning strategy from fintech startups, which in time offered borrowers a quick and easy way to get a loan using a mobile application. The success of this technology is evidenced by the fact that in the United States 38% of consumer loans are issued by fintech startups.

Blockchain Solutions for Customer Identification

Customer identification is an important element of cybersecurity, but customers demand that this process be simple and convenient. To achieve this goal, banks have begun testing blockchain solutions that can provide a number of advantages: for example, storing all data from different sources in a single database and verifying the identity of a client without involving third-party agents. By using blockchain, banks will be able to reduce costs as well as fraud risks.

Design thinking

Design thinking is the concept of predicting desires. This approach is designed for the system to assess the needs of the client and offer him the necessary services even before he asks for them. Most customers prefer to receive services in the background without spending too much time and attention on them, so banks should focus on such customer-oriented principles.

AI personalizes customer experience

AI is able to analyze the client's behavior and give him appropriate recommendations, thereby increasing satisfaction with the service. Banks expect that the use of AI will not only save customers time, but also improve their impression of the credit institution as a whole.

RegTech - technologies to track regulatory changes

Since regulatory requirements are often tightened, as are the corresponding penalties for non-compliance with the rules, banks are interested in RegTech - technologies that promptly notify employees of regulatory changes.

New Technologies for Risk Management

Automation of routine processes is well underway thanks to technologies such as AI, Big Data and machine learning. They also allow you to control risks, find suspicious transactions and block them in time.

Open work with client data

By providing a range of client data to third-party organizations, banks will be able to provide users with many services from partners, as well as personalize their own offers through the free exchange of customer information.

Bank as a service

Thanks to data analytics, AI, machine learning and IoT, banks will be able to assess the "context" of the situation and independently offer the client the most profitable solutions. For example, Commonwealth Bank of Australia has already launched a mobile application that can draw up a personalized financial plan.^[1]

2019

Automation at banks led to record job cuts since 2015

In 2019, more than 50 banks around the world reported a reduction in the total number of personnel by 77.8 thousand people. This figure was the highest since 2015, when credit institutions laid off more than 91.5 thousand employees. Such data are cited by Bloomberg, citing reports from banks and trade unions.

Most of the job cuts - 82% of the total or 63.6 thousand people - in 2019 fell on European banks. The share of layoffs in banks in North and Latin America amounted to 10% (7.7 thousand) and 4.5% (3.5 thousand), respectively.

Most of all working positions were liquidated by the German Deutsche Bank - about 18 thousand at the end of 2019. Next are UniCredit (8 thousand), Santander (5.4 thousand), Commerzbank (4.3 thousand) and HSBC (4 thousand). The top ten was the Russian Alfa Bank, which announced the dismissal of 3 thousand employees.

One of the reasons for massive bank layoffs is automation: the introduction of artificial intelligence and other software and hardware tools reduces the need for a living workforce.

In addition, according to Bloomberg observers, the 2019 results point to weakness in European banks, as the continent's export-oriented economy faces international trade disputes, while negative interest rates further affect lending revenues. Unlike the US, where government programs and rate hikes have helped banks recover quickly from the financial crisis, credit institutions in Europe are still struggling to regain ground. Many lay off employees and sell businesses to support profitability, the publication said.

In just the past six years, more than 425,000 people lost their jobs in banking by the end of 2019. At the same time, Bloomberg journalists believe that the number of those dismissed may be much higher, since many credit organizations do not officially announce the cuts.^[2]

Accenture: Technology becomes one of the most important risk factors for the financial industry

On December 24, 2019, Accenture announced the results of the Accenture 2019 Global Risk Management Study, which surveyed more than 680 risk management managers at banks, insurance and investment companies around the world.

The study shows that only 11% of top managers are confident that they are able to assess the risks associated with the introduction of artificial intelligence (AI) in their organizations. Risks that may appear in connection with process automation (RPA) or blockchain may be foreseen by 9% and 5% of respondents. At the same time, the vast majority of respondents are ready to use new technologies to more effectively manage emerging threats. The most "predictable" were cloud technologies: 43% of respondents were fully prepared for the risks of their implementation.

The vast majority of respondents noted a sharply increased role of risks associated with technological development: 58% of managers noted an increase in risks associated with "disruptive technologies," 55% - with data leaks and violations of information privacy. For comparison, 25% of respondents said about the growth of risks associated with reputation; geopolitical risks have become more relevant only for 20% of respondents.

Top managers who took part in the study noted the complication of external risks: 72% of respondents said that complex, interconnected critical situations arise faster than before.

52% of top managers note that the risk management process is only partially effective for prompt response to changes in external risk factors. Therefore, it is necessary to adapt your business approaches to new threats and accelerated pace of change.

"Despite the fact that almost half of the respondents began to use RPA to automate routine tasks, only 40% of respondents integrate this technology with advanced analytics with elements of artificial intelligence and predictive modeling. And only 10% use machine learning to process data arrays in real time, " noted' Mikhail Ammosov, Managing Director of Accenture's Financial Institutions Department in Russia and Kazakhstan '

The report notes that the risks of applying new technologies (especially advanced analytics) are primarily related to the problems of using data: their fragmentation, lack of clear regulation and the difficulties of integration with old "legacy" IT systems.

At the same time, risk managers recognize the need to improve skills in data collection and analysis to identify valuable knowledge. In particular, 63% noted that they learn to collect data at the scale of the organization, and 66% - that they hone the skills of their analysis. The authors of the study emphasize the need to quickly receive traditional data from new sources, including from the marketing department and from social networks.

Accenture analysts also note that risk managers at financial institutions will have to work more closely with other functional units. Only 55% of respondents noted that other departments are aware of the importance of risks in obtaining a positive business result.

At the same time, the level of cooperation between risk managers and financiers is increasing: three quarters of respondents noted that over the past two years they have begun to work in a closer connection with the financial department of the company.

Member of the Board of Alfa-Bank Sergei Polyakov at TAdviser SummIT - about the turning point in the digitalization of the banking industry

Speaking at TAdviser SummIT on November 27, 2019, Sergei Polyakov, Chief Information Officer and Member of Alfa-Bank's Management Board, focused on understanding the point of the fundamental turning point in which the banking industry is today.

Digitalization went quickly and somewhat unexpectedly, "he said. - Once banking activity was transactional, global leaders of industry IT solutions grew well in this paradigm. But today the flow of information is far from a flow of transactions, it is a much broader concept.

Read more here.

10 trends in banking informatization - TAdviser

1. Data management

More and more banks come to the understanding that data must not only be accumulated, but also radically change the principles of working with them. Banks have separate divisions responsible for data, and employees responsible for these are appointed.

In addition, unified solutions for data quality control, cataloging and maintenance of unified glossaries are being actively implemented. This allows you to provide the right set of data for business in the shortest possible time, quickly implement business ideas and outstrip competitors, "says Mikhail Komarov, director of Informatica at DIS Group.

According to Maxim Tikurkin, CEO of SysSoft, the data has become the bank's main asset, but they are not enough to collect: you need to be able to preserve, ensure their safety, and then analyze and use it when developing a new product. This circumstance determines the constantly growing need for appropriate tools: software solutions for virtualization, backup and replication, information security products, business intelligence systems, tools for developers.

Rustem Mannanov, an expert at ICL System Technologies, notes a request from bank customers to increase the speed of data acquisition and processing, as well as an increase in requirements for their quality, reliability in operational and analytical repositories.

At the same time, the focus of attention goes from building complex complex models with an implementation cycle of several years. Today we need simple and high-quality models with which specialists who do not have specialized education in Data Science and Computer Science can work, he said.

Julia Amiridi, deputy CEO of business development at Intersoft Lab, adds that data is the foundation of digital transformation. Both for the implementation of RegTech requests, and for the back office in terms of automation of planning and forecasting, assessment and monitoring of profitability, risk management, and for the use of fashionable machine learning algorithms in order to improve customer service and business development, data is needed: verified, complete, relevant.

This is a rather "sick" task for many banks, and it will inevitably be solved. If data stores have more than once proven their effectiveness as a platform for solving regulatory problems, managing efficiency and risks, then in order to obtain useful information from unstructured multi-format data, banks are still testing different approaches from Big Data to artificial intelligence based on neural networks. Only time and accumulated practice will allow us to throw back the marketing foam and give an adequate assessment of the target effectiveness of these tools, she believes.

According to Alexander Rozhkov, sales director of the services department of Softline Group of Companies, the key task for banks is to extract useful information and valuable knowledge from the huge amount of accumulated data. This trend is especially relevant within the framework of the "know your customer" approach, which allows you to analyze digital customer experience, increase the accuracy of scoring and form personalized offers.

Analytics helps banks manage internal and external risks in real time. Modern visualization tools allow you to improve the perception of information when working with large amounts of data, identify effective hypotheses and make timely management decisions, he explains.

2. Penetration of robotization technologies of processes and elements of artificial intelligence

Until now, employees make a huge layer of work manually, even in large banks. This situation will change due to the introduction of process robotization technologies (RPA).

Robotization of typical routine processes already today gives a significant result for business, allowing for a number of scenarios to release up to 80% of human resources, previously engaged in manual labor, - notes Maria Bar-Biryukova.

So far, artificial intelligence (AI) does not replace a person, but helps him make decisions. AI is being implemented in a variety of fields and generates additional information that a person can use to make decisions.

At some point, there will be so many correct AI decisions that it will be transferred completely to perform a particular operation. Undoubtedly, the use of AI in all areas will only grow, - said Mikhail Komarov, an expert at DIS Group.

According to Sergei Kosetsky, commercial director of X-Com, AI is most in demand in the field of client service, where it partially replaces a person, and over time will be able to do it completely.

In this way, banks reduce transaction costs, provide 24/7 customer service, and avoid many errors in handling typical requests due to human factors. A classic example is the automation of call centers, where a robot assistant answers many typical questions without the participation of an operator. In addition, artificial intelligence will take on a number of strategically important tasks, in particular - high-speed processing of large amounts of data, - believes the commercial director of X-Com.

Andrei Ezrokhi, Director of Strategic Business Development at Bell Integrator, believes that so far AI technology is focused mainly on analyzing the client base and developing recommendations for its "shedding."

{{quote 'Banks are trying to create a competitive advantage here through the subsequent use of these recommendations in advertising campaigns, focusing them on the most promising segments of the mass audience. The use of AI in the field of risk management and for the purposes of financial analysis is also very promising, he believes. }}

Alexander Rozhkov, Sales Director of Services Management at Softline Group of Companies, identifies three key areas of application of machine learning technology, natural language processing and predictive analytics: to attract customers - from using chatbots to creating personalized offers to customers, to fulfill regulatory requirements - from detecting fraud to automating processes for checking compliance with mandatory regulations, and finally, to increase operational efficiency - reducing costs by robotizing the processes of the contact center, back and middle office.

Maria Bar-Biryukova, Deputy General Director of Korus Consulting Group of Companies, adds that now artificial intelligence technologies and machine learning have already been introduced not only in several of the largest banks, but also in medium-sized financial companies.

Basically, these tools are used when working with retail, but recently quite interesting ideas for their use have begun to appear in the SME segment, she notes.

3. Digitalization of customer service channels

In recent years, banks have been confidently moving in the direction of RBS and are developing appropriate technologies. Customers "demands for the quality and availability of services of financial institutions are growing, banks pay more attention to collecting and analyzing data on customers and their needs, increasing the speed of decision-making and developing new services.

Already today, banking services are available to customers from almost anywhere in the world, and the day is not far away when visits to branches are not required at all. At the same time, the role of banking retail boils down to user identification, and the first step on this path was the project to create a Unified Biometric System, implemented with the comprehensive support of the Central Bank, the Government and Rostelecom, says Sergey Kosetsky, Commercial Director of X-Com.

However, as Julia Amiridi notes, despite the fact that Deloitte Digital experts included Russia in the top five countries leading digital banking in the EMEA region, according to consultants Markswebb Rank & Report, the possibilities of "mobile" and classic Internet banking for individuals in our country are still limited.

Requests for online and mobile services from small and medium-sized businesses, individual entrepreneurs, self-employed are growing. By the way, the potential revenues of only the latter are estimated at 1-1.5 trillion rubles annually. All this will stimulate the development of digital services to improve customer service, she notes.

At the same time, the mobile banking channel continues to crowd other remote banking channels, adds Elena Zakharova, director of Digital2Go at BSS.

At the very least, this is absolutely true for the retail banking market. Most of the daily operations are easily and simply carried out in a mobile application. The interaction of a private client with the bank is increasingly concentrated only around the smartphone. The MobileFirst/MobileOnly concept really strengthens its position. She has good prospects in the small business segment. The development and implementation of such solutions is now on the rise, she explains.

4. Protection against cyber threats

In an effort to preserve business data and customer information, banks are developing various security tools that are relevant to protect against external and internal threats.

Historically, financial institutions have built advanced cybersecurity systems that reliably protect sensitive data from threats of various origins. But the increasing integration of information systems of these organizations with the IT infrastructures of numerous partners and clients can level the high level of internal security due to systemic vulnerabilities of counterparties.

This poses a new challenge to banks, forcing them to build security systems that can protect all participants in the ecosystem. I believe this task will not lose its relevance in the next 3-5 years, "says Sergey Kosetsky, Commercial Director of X-Com.

A separate section is devoted to the direction of security in banks. The details are here.

5. Open source platforms

Another trend is associated with the active use of technologies that do not require investments in the license. open source This trend also affects the redistribution of financial flows between players in the market.

On the basis of such technologies, the bank's internal divisions are developing their own digital platforms, which in the coming years should replace existing outdated banking systems, - said Ilya Polessky, director of business development at DTG (direction in the Lanit group of companies).

Rustem Mannanov, an expert at ICL System Technologies, adds that comprehensive platforms, including those built on [[Open-Source solutions, allow you to close many tasks within a single, consistent architecture.

This approach to choosing technologies is explained by the fact that banks, firstly, want to be competitive, and as a result, to form expertise on key platforms within IT departments. Secondly, credit organizations want to solve the problem of shortage or high cost of specialized IT specialists, the expert notes.

6. Web solutions for internal bank processes

Elena Zakharova, director of Digital2Go at BSS, notes the high interest of banks in developing new web solutions for corporate portals integrated into internal automation circuits. A number of banks, she said, are radically rethinking their own IT infrastructure.

This is largely due to the need to change generations of internal interfaces. Firstly, those used now are already seriously technologically outdated. Secondly, modern calls require flexible tools that can easily adapt to the behavior and requests of the internal user. Thirdly, the active development and introduction of new web solutions logically fits into the strategy of digitalization of banks, she says.

7. Regulatory technologies

Supervisory bodies (Bank of Russia, FTS) take a proactive position on the regulation of the banking industry. This inevitably transforms RegTech (regulatory technology) from a promising niche to the mainstream.

The focus on regulatory analytics and advanced approaches to risk management and redundancy requires banks to deal more closely with data. There is no need to "reinvent the wheel" in this matter: to solve problems related to the analytical processing of large amounts of structured data, data storage technology has proven itself well, says Julia Amiridi.

Alexander Filippov, director of business development at CROC in commercial banks, believes that regulatory technologies RegTech and SupTech will allow banks to save resources and time on reporting for the regulator, and as a bonus, will increase the transparency of the sector as a whole.

8. New Business Models

Since some of the traditional banking products cease to generate income, banks have to build ecosystems together with partners: for example, offer their customers not only a mortgage, but also a service for choosing housing.

This, in turn, forces banks to create data exchange systems and seriously changes the process of developing digital banking products, - said Maxim Tikurkin, CEO of SysSoft.

Andrei Fomichev, Deputy Chairman of the Board of CFT, adds that the creation of new business models, which are based on open banking systems, microservice platforms and open API platforms, provides banks with critical requirements at present - flexibility and reduced time for bringing new products and services to market.

9. Development of bank insourcing

Banks are pioneers in the field of self-development of internal digital competencies. Therefore, banks now do part of the work that was historically carried out by contractors at the expense of their own resources.

We can confidently talk about strengthening the overall trend for the coming years - the development of banking insourcing. This is due to the fact that internal IT experience is the main competitive advantage of the company in the market. And if earlier digital (information) technologies helped to support and optimize business, today is the basis of the strategy and business model of any company, - said Ilya Polessky, director of business development at DTG (direction in the Lanit group of companies).

At the same time, Andrei Ezrokhi, director of strategic business development at Bell Integrator, notes that the desire of banks to develop as much software as possible on their own, neglecting the services available on the market, leads to a significant redundancy of their spending on informatization, because in fact, several large players are developing similar functionality at once.

{{quote "As a result, we are now seeing attempts by the same Sberbank, for example, to bring its own services to the commercial outsourcing market, despite the fact that initially these services were developed precisely as a unique commercial advantage. Unfortunately, in the next 2-3 years, this trend is likely to continue, further, we hope that banks will still learn to correctly count their costs, says the Bell Integrator expert. }}

10. Outstaffing growth

Today, as a rule, banks have strong teams of IT departments in terms of application development and support. It doesn't depend on whether they order development and implementation on the outside or create themselves. Nevertheless, niches remain, where it is more expedient to attract highly qualified personnel only for the project to strengthen teams of their own development.

This often happens when the bank implements the vendor's solution. But it often happens when the bank independently develops additional functionality or refines the existing one. At the same time, with an increase in development volumes, which is a modern trend, outstaffing is also objectively growing to strengthen teams, "said Elena Zakharova, an expert at BSS.

However, as Andrei Ezrokhi notes, usually no one even thinks about who will then accompany and develop these "unique" developments. After all, the state attracted on the basis of outstaffing will leave the bank, and its own programmers will definitely not like the idea of ​ ​ climbing into someone else's program code for them.

The Bank-as-a-Service model allows you to integrate banking directly into the ERP system. How does it work?

Three-quarters of respondents representing large businesses in North America, Europe and Asia participate or plan to participate in open banking projects. 90 out of 100 banks consider this direction key as part of their digital transformation. What is open banking and, in particular, the Bank-as-a-Service (BaaS) model , in the material prepared for TAdviser, explains Denis Dodon, director of the Alfa-Bank Innovation Search and Development Center.

Accenture: 88% of banks target partner ecosystems and marketplaces

Financial institutions need to build a new model of relationships with end clients to build trust relationships on the basis of which business growth is possible. The best way to achieve these goals is to create partner ecosystems. This is evidenced by a study conducted by Accenture in relation to 120 global banks.

Analysts of the company found that 9 out of 10 financial organizations are interested in developing an ecosystem focused on meeting the needs of customers through the offers of partners who work closely with each other and with the bank. The key factor in success in this process is determining the correct operating model before launching the solution. The Bank should adopt a clear strategy by identifying key segments to focus on, as well as choosing a business model for providing customers with offers with increased value.

To do this, you should carefully work out three key points: the selection of ecosystem partners, the business architecture of the ecosystem, as well as technologies for the optimal implementation of the solution. Those banks that cope with these tasks will be able to retain customers by providing them with useful and timely offers that support loyalty.

Data from the Accenture study shows that 88% of banks in the world consider partner ecosystems to be the most important channel of interaction with customers, and 89% of them also call such ecosystems the main driver of the development of new types of business value in the banking industry. Many bank leaders realize that it is not enough to simply agree on a mortgage loan for the client and transfer the money to the seller's account: people expect to be fully accompanied by their personal history with housing, which includes financial and non-financial services received on a single window basis.

According to the results of the study, Accenture identifies five typical models of organizing a partner ecosystem for banks:

• Synchronization with the key stages of life. Banks can build ecosystems around serving customer needs that arise in connection with the basic stages in the human life cycle: for example, changing family status, moving, having children, changing jobs. The system monitors the onset of such stages and provides information about this to partners within the framework of cooperation agreements.
• Marketplace principle. It also uses an approach through the analysis of the client's life situation, but the bank includes in its offer non-financial products under its own brand (or through co-branding with partners) as part of a single branded marketplace.
• Joining an existing third-party ecosystem. The bank can become a member of the existing platform for the marketplace of goods and services, occupying its niche as a provider of financial services
• Open banking platforms. Banks can join forces within open banking platforms, including their products and services in combined catalogs with other banks through APIs. Specialization scenarios in certain areas and niches are also possible.
• Reference platform. In this model, the bank redirects customers who have been refused for some reason to other providers of products and services of interest. Thus, large financial organizations can send applications from small businesses to smaller partner banks.

Speaking about the most popular areas of ecosystems, the surveyed banks put business services first (58%): including settlement accounts and payment management, support for business start-up, legal and accounting services, website creation, online trading and marketing platforms, billing and reporting for regulatory authorities.

In second place were the ecosystems around housing and personal welfare management (38% of respondents each). At the same time, the My Home ecosystem most often includes mortgages, housing selection and acquisition assistance services - including checking the technical condition of real estate, assessing, moving, as well as security, storage services, assistance in choosing and switching between providers of utilities and household services. In the personal wealth management ecosystem, the most common are planning and budget management services, international money transfers, analysis of bills for the payment of communication services, insurance or other regular expenses and assistance in changing service providers.

The third position is among ecosystems around public services (36%): this category includes payment of fines and taxes, provision of credit histories, consultations on taxes and obtaining state benefits, support in business registration for entrepreneurs or self-employed.

In fourth place were ecosystems for retail (28%) - including consumer lending, e-commerce platforms with exclusive offers, discounts and loyalty/cashback programs, electronic gift cards.

The fifth most popular position was the ecosystems around movement (25%): car buying, car loans and car leasing, car insurance, maintenance, discounts at gas stations.

The sixth place was taken by ecosystems for health (21%), including insurance, discounts and exclusive conditions for spa services, fitness clubs, sports stores, special programs to stimulate a healthy lifestyle and good habits, and various medical services, including appointment with doctors, preventive medical examinations and tests, telemedicine and online consultations.

"There are three main ways to create additional value in the ecosystem. First, you can expand the interaction with existing customers in scenarios that are convenient for them. The second way is to create new directions for revenue generation, the third - to reduce the outflow of clients, "says Irina Odinaeva, Managing Director of Accenture in Russia and Kazakhstan, head of management consulting practice for financial institutions.

Accenture analysts also identified 4 factors that determine the development of partner ecosystems of banks today:

• The level of readiness of customers in different regions to interact with ecosystems. This is the highest in the Asia-Pacific region, where 80% of consumers are ready to work with the ecosystem.
• Industry-wide Open banking strategy: Regulators in the EU are leading the way in this area, forcing market participants to open their systems to third parties through the API (in particular, thanks to the adoption of the second directive on the provision of payment services PSD2).
• Technological challenges: In the EU and North America, the transition to ecosystems is constrained by the limitations of existing IT systems. Many Asian banks are winning in this regard today by using advanced technology solutions during the initial launch phase of the business.
• Adequate ecosystem partners. When launching a project, the bank should focus on partners who fulfill the task of communicating new offers to the largest number of potential customers, followed by the provision of the service at the declared level.

The respondents called the development of the working technological platform the main challenges - 42%, information security issues - 41%, the creation of high-quality client experience of interaction with the ecosystem and its association with the brand - 38%.

Central Bank invited about 20 banks to participate in a pilot in the field of open APIs

On August 21, 2019, it became known that the Bank of Russia acted as the coordinator of a pilot project in the field of open APIs (application software interfaces) for the integration of bank services within the Eurasian Economic Union (EAEU). At the time of the release of the material, the Central Bank, together with the central banks of the EAEU countries, is preparing the pilot for implementation. Bankers who received a proposal from the Central Bank told Kommersant about this. In total, about 20 credit institutions received a letter from the regulator, which must give an answer about their readiness to participate by August 23. Read more here.

APIs of European banks were not ready to fulfill the requirements PSD2

On July 10, 2019, it became known that against the background of the rapid approach to the date of entry into force of Regulatory Technical Standards (RTS), which are the basis of the PSD2 Directive (Payment Services Directive), representatives of the Swedish the open banking platform Tink say that the European credit the institutes failed to provide third-party suppliers with the technological environment necessary to access payments, to data as required by the law.

European banks had to open access to their industrial APIs by June 14, 2019 - three months before the RTS came into force.

To check the level of readiness of banks, Tink specialists tried to integrate 84 APIs representing 2500 banks in 12 markets. Although 69% of industrial APIs were available by June 14, the quality of none was recognized as meeting mandatory regulatory standards for integration.

Tink representatives note that banks respond positively to comments and demonstrate their readiness to improve the situation, but at the same time predict that third parties, if they are going to offer uninterrupted service to end users in September, will now have to rely on the methods provided by the PSD2 for unforeseen circumstances.

Tink is calling on regulators to extend the deadline set for the transition period to give banks time to bring their APIs up to standard.

Given that less than three months remain until every financial institution in Europe has to fully comply with the regulatory technical standards of the PSD2 Directive, this is alarming news. Even as both sides try to meet the deadline, TPPs across Europe remain in the dark. Having unresolved issues - such as who will be exempt from fallback support and when these exceptions will be introduced - means they face the problem of an unfavorable work environment. Everyone is interested in ensuring that end users can continue to use the services they are used to after September 14 and in ensuring the successful implementation of the PSD2 Directive and the ideology of Open Banking,

Banks spent $1 trillion on IT in 3 years, but did not see a surge in revenue

In mid-June 2019, Accenture published a report according to which $1 trillion invested by traditional banks around the world over the previous three years in information technology has not yet brought the expected revenue growth.

The consultancy analysed data from more than 160 of the largest banks in 21 countries. The aim of the study was to compare financial performance and technology progress. Accenture analysts calculated that retail and commercial banks around the world spent more than $1 trillion on IT development, taking into account the costs of personnel, software and services.

But just 19 of the banks analysed were able to change their digital strategies enough to earn the reward they deserved. Accenture analysts found that banks that moved further into digital did prove to be the most profitable, but those gains were driven by lower costs rather than rising revenues.

All the banks examined in 2011 started at roughly the same capital return rates, but by 2017 the returns on bank stocks, which Accenture identified as "digital-focused," were up 0.9%, while the returns on IT-disinterested banks' shares were down 1.1%. Analysts at Accenture believe the gap will continue to widen until 2021. However, the profitability in the average group of banks has changed slightly.

Accenture's senior managing director and head of its international banking department, Alan McIntyre, believes banks were hoping for other results. By creating better digital products and providing customers with a convenient virtual environment, investors expected to significantly increase the profitability of banks, equaling technologically advanced competitors and large non-financial firms.

The researchers concluded that banks continue to allocate huge funds for the overhaul of old technological systems. While Accenture analysts did not include the names of the banks studied, McIntyre said the 19 most digitally focused banks included JPMorgan Chase. The largest U.S. bank, JPMorgan, has been a leading sponsor among financial firms in the technology arms race. In February 2019, the company announced that it plans to increase its IT budget by $600 million, so that the total amount will reach $11.4 billion. However, a good digital offering is not enough to interest customers, McIntyre believes. If banks do not change the approach to digitalization, "the industry will eventually become more like a communal service."

Banks continue to allocate huge funds to adopt new technologies and to offer more digital services, trying to meet the expectations of customers who are accustomed to the convenience offered by technology companies. Accenture analysts do not devalue technology investment, but note that cost reduction is just the first step banks need to take to become more competitive in a changing environment.

Digitalizing cash flows can reduce banks' revenue from fees, such as what customers pay for consultations or transactions, according to the report. Analysts recommend that banks focus on generating more revenue when taking risks related to interest rates and loans. In addition, it is necessary to create a new income stream in areas other than the traditional banking sector.^[3]

CIO Promsvyazbank Sergey Pegasov on TAdviser SummIT - about what trends affect the development of IT strategies of banks

The head of the directorate, information technology Promsvyazbank Sergey Pegasov speaking at the TAdviser SummIT conference on May 29, 2019, shared his vision of technological trends affecting the IT strategies of companies, primarily banks.

Sergey Pegasov noted that when developing an IT strategy, it is necessary to determine the target picture where to move. If you do this incorrectly, then by the time the implementation of the IT strategy is completed, you can find that the created systems are already outdated.

A modern bank is, by and large, an IT company. - stated Sergey Pegasov. - Everything that is done in one way or another is connected with technologies, their development. If today we incorrectly assess where to move, we will not get any competitive advantages. We need to understand trends, benefits, look to the future and see where we come when the strategy takes real shape. You need to play ahead of the curve.

At the moment, banks are striving to implement systems that allow them to collect the maximum amount of data about the client and, on their basis, provide him with the maximum level of supply that he expects in all channels. Whoever can offer it faster "wins" the client. Therefore, the simple introduction of new technologies no longer brings the effect that it brought several years ago, now a more comprehensive approach is required, Pegasov noted.

Based on this, the main priority in the development of the strategy, according to the speaker, is the synergy of various technological trends. Only this can bring long-term competitive advantages. For example, this is the simultaneous introduction of conversational interfaces for interaction with the client, a digital payment adviser, open banking platforms, the use of regulatory technologies to help optimize activities.

From a technology perspective, when developing an IT strategy as a whole, it is important for the company to determine what role it has, how it sees itself. Some companies, for example, can afford and are eager to fall into the category of innovators. They focus on adapting technologies that are just getting attention on the market. There are other companies - in the category of catching up, implementing already proven, working solutions. This approach is undoubtedly cheaper and less risky.

Among the key trends in digitalization, the speaker named the creation of an internal ecosystem of the company, which would include customers and partners, which involves the unification of all products and services.

One of the basic points from which to start consideration is open banking systems, microservice platforms and platforms with open APIs. This makes it possible to develop according to the Agile methodology, which, in turn, has a positive effect on the time of launch of new products and services on the market, which is critical for banks. It also provides greater technology adaptability and cost savings.

Echoing the beginning of the speech, Sergei Pegasov stressed that it is important to initially draw a target version of the architecture, which should be reached so that in 2-3 years the architecture remains relevant, Sergei Pegasov said in conclusion. This implies the presence of omnichannel solutions with round-the-clock provision of services, VPN engines, a single analytical layer.

О TAdviser SummIT

TAdviser SummIT was held in Moscow on May 29, 2019 and attracted more than 600 participants - heads and experts of IT divisions of the largest companies and government departments of Russia, representatives of IT developers and contractors. During the event, the prospects for digital transformation of business and government agencies, the development of technologies, products and services were discussed. More than 70 reports were made in the plenary part and five thematic sections. The event was held in 5 halls of the Sokolniki Holiday Inn.

Accenture highlights 5 key trends in banking business digitalization

Accenture conducted a global study of Banking Technology Vision 2019, which was attended by top managers and IT managers of 748 banks from 30 countries. The vast majority of respondents (96%) said that the pace of technological innovation in their organizations has accelerated significantly over the past three years. In particular, 73% of banking executives are confident that social, mobile, analytical and cloud technologies (SMAC) have led to extensive changes over the past five years.

In its research, Accenture highlighted five trends that will have the strongest impact on the banking sector in the coming years. Among them are the use of DARQ technologies, personalization of customer needs, strengthening employee skills, cybersecurity risk management and the transfer of most services to 24/7 mode.

The first trend is the use of technologies of the so-called DARQ group, which includes a distributed registry (D - DLT), artificial intelligence (A - Artificial intelligence), extended reality (R - Extended reality), quantum computing (Q - Quantum). According to 47% of respondents, artificial intelligence will have the greatest impact on organizations. 19% of respondents identified quantum technologies as a priority, 17% noted distributed registry systems and 15% of respondents - expanded reality. At the same time, 90% of managers are already experimenting with one or more DARQ technologies.

Trend number two - the use of technologies to personalize needs and achieve a new level of digital proximity with the client. The ability to analyze and interpret the actions of users, respecting their privacy, allows you to create a high-quality individual service that increases customer loyalty. 85% of banking executives believe that the use of digital demographics will help to better understand the needs of customers. Almost 30% of respondents expect exponential growth in the amount of digital data about customers that their organization will manage over the next two years.

Accenture experts call strengthening employee skills with new technological tools the third trend. More than 75% of top managers are confident: employees have a higher level of "digital maturity" than the banking organizations in which they work, and expect an active digital transformation from the employer.

The researchers noted the need to apply the concept of "Man +" to banks, in which each worker will use a combination of their own skills and knowledge together with an ever-changing bundle of technologies, from artificial intelligence to training platforms. For such a bundle to work successfully, banks will have to pay great attention to continuous training of staff.

The fourth trend, the authors of the study called the strengthening of cyber defense. Bank information systems are becoming more and more interconnected with partner IT infrastructures, which means that their potential vulnerability is growing. By building ecosystems around them, banks must build the resilience of cyberspace in a way that protects everyone. Despite the global trend towards Open Banking (banks open access to part of their information assets and third parties gain access to data), only 51% of bank leaders called customer confidence in their partners "especially important." Also, banks do not make sufficient efforts to ensure that their partners are worthy of the trust of end customers.

"Our global research has confirmed the relevance of the security topic for banks now: only 31% of security respondents are ready to trust their partners. At the same time, 88% of banking executives are convinced that organizations can become truly sustainable only if they rethink their approach to security and protect not only themselves, but also the ecosystems they create. In my opinion, in Russia this is still one of the most underestimated trends: the high level of cybersecurity within banks can be leveled due to systemic vulnerabilities in the information infrastructures of their partners. Probably, many large market players will face this problem over the next 3-5 years, "comments Irina Odinaeva, Managing Director of Accenture's Services for Financial Sector Organizations Department in Russia.

As the fifth trend, analysts called the transfer of most services to 24/7 mode. With the help of technology, banks are increasingly starting to work in non-stop mode. For example, Rocket Mortgage, through its online platform, is able to offer initial mortgage solutions in just 8 minutes, and financial conglomerate BNP Paribas opens a new account every thirty seconds. 87% of top bank managers agree that the combination of customization and the offer of a service in real time is the basis for the future of a specific advantage. At the same time, in practice, the situation is much worse: only 38% of respondents say that their organizations prioritize a personalized approach to product delivery.

2018:15 Banking Informatization Trends

1. Platformatization

Some of the most notable trends in the development of IT in banks in 2018 are associated with platformatization, blockchain technology, the transformation of service offices and the development of remote channels for providing services.

A few years ago, there was talk of banks creating platforms and marketplaces to promote their financial products, as well as various non-financial services from affiliated companies or partner companies. As of 2018, there are already several existing examples of such platforms: DomClick and I Take from Sberbank, various Tinkoff projects (banking services, insurance, brokerage services, tinkoff.travel). In addition, the Central Bank is going to launch in 2018-2019. marketplace of financial services together with the Moscow Exchange, its National Settlement Depository, five testing banks, as well as two information portals.

This trend reflects that the future of the financial sector is primarily in the offer of not only standard banking services, but also additional personalized services. The success of existing platforms suggests that there will be more such examples over time, "says Anton Golovaty, director of business development at Lanit-Integration (part of the Lanit group of companies).

Alexey Katrich, the commercial director of the company, Technoserv Consulting"" believes that the concept of the marketplace can be compared to how supermarkets appear at gas stations.

Now we buy ourselves coffee, refuel with gasoline and do not think that oil companies, oil pipelines, processing plants are behind all this. People come to the gas station to buy related products and at the same time refuel with gasoline. So banks should create such "gas stations" with related goods, - he notes.

Alexey Trefilov, director of ELMA, also believes that the Our Mission - Commission approach is becoming obsolete, and the promotion of the bank's own services is increasingly being transformed into helping the client and earning money with him.

As a result, not the most seemingly banking solutions appear - the same DomClick from Sberbank, he notes.

2. Blockchain

An important market trend is blockchain technology. Interest in it among participants in the financial market reached the first trial projects. One such example is the blockchain consortium, which was created by Sberbank, Alfa-Bank and M.Video.

In the next few years, most likely, there will be several ecosystems, both similar and decentralized, using blockchain technologies, - Anton Golovaty is sure.

Read more about blockchain technology in the TAdviser review.

3. Service Office Transformation

The next notable trend is the transformation of service offices. In this case, we are talking not only, and not even so much, about reducing the number of bank branches, although this trend remains in the context of minimizing costs, but about changing the format. Due to the increasing development of remote banking services, the need for a wide network of classic service offices is gradually disappearing. However, ditching the retail chain entirely doesn't always make sense, especially if the bank is targeting a wide customer audience.

Not all age groups of customers may like completely remote service, some may need to communicate face-to-face under individual conditions as part of a large transaction, etc. In this case, there is a need to have a small number of customer service offices for any issues in the "show-room" format. In addition to standard forms of service, these offices can perform the task of demonstrating a wide range of products of the organization and its partners, as well as a culture of customer service, "explains Anton Golovaty.

4. New areas of activity

As a whole, banks' margins are decreasing, there is an excess of liquidity, the traditional customer base is stagnating, and the key rate is decreasing. It is becoming more and more difficult to earn with the help of the main banking activity (commission for RKO, interest on classic loans). As noted by Yuri Teryokhin, director of work with financial institutions "Force - Development Center" (GC "Force"), against this background, banks are actively developing and automating new areas of activity for themselves. He refers to them:

• Services and products for small businesses and individual entrepreneurship (IP) in general. In the context of stagnation of the traditional customer base of banks, this is the only segment that is relatively new, moreover, showing some growth.
• Online lending: unsecured consumer lending to individuals and legal entities in terms of small businesses and individual entrepreneurs. This expands the customer base of banks and is especially important in the context of a declining key rate, when the sources of money for banks are becoming cheaper.
• Using social media to score customers. Although there is more hype than common sense in this, nevertheless, banks want to "be in trend" in this regard.
• In-depth automation of decision-making processes using complex multi-stage algorithms (conditional AI), which allows you to reduce the cost of customer service in call centers, replacing operators, and organize online lending.
• Investment services to individuals - structural products, bonds, individual investment accounts (IIS), brokerage services. These services are attractive in that they offer (but do not guarantee) customers higher returns than classic deposits, and banks are given additional funding and commissions.
• Turning banks into service companies in which financial services are the main, but not the only ones. Many banks actively offer legal, accounting, tax, insurance, documentary, travel, telecommunications, brokerage, government services, etc. For banks, this is a source of additional commissions and clients. Tinkoff Bank and Sberbank have especially advanced in this direction. Such activities require extensive automation of interaction with service providers. Its full-scale financial and technical implementation is possible only for large banks - it is they who become universal providers of B2C and B2B services with an emphasis on the financial component, and small banks remain banks in the classical sense of the word.

5. Digital modernization of banks

Banks must have a so-called "digital core." Therefore, several developed standard models of a digital bank have appeared on the market, based on CRM, BPM, analytics and scoring models.

This is such a digital layer through which work with external companies is implemented. The open banking architecture assumes a set of adapters to different channels. This layer contains workflow management, which allows you to coordinate the direction of information flows through different channels. Between the digital core and the bank's clients is a front end, which provides information security, and through which work with client accounts, with PFM. This allows banks to sell not only their products, - explains Alexey Katrich.

Julia Amiridi, Deputy General Director for Business Development at Intersoft Lab, believes that the goal of digital modernization of banks is to increase profitability and competitiveness. Digitalization covers all facets of the banking business, from external processes, where the changes taking place and the new "digital" properties of financial services acquired as a result are noticeable to the naked eye, to internal management technologies.

The foundation of the latter is the Corporate Performance Management (CPM) tools based on data warehouses and the Business Intelligence (BI) platform. They turn huge amounts of data generated during the activities of credit institutions and coming from outside into useful information that allows you to increase the profitability of services and customers, the effectiveness of business processes and the profitability of business areas and the bank as a whole. At the same time, despite the new sonorous terms, digital transformations are a natural result of the evolutionary development of the IT infrastructure of banks, the technologies used have already proven themselves, and in the wake of digitalization, their presence in the banking market is only strengthening and expanding, she believes.

6. Development of remote banking services

For those groups of clients who are more convenient to receive services on a remote basis, the development of remote banking services allows you to provide an almost full range of banking services.

At the same time, this approach is often more profitable for the bank, since it allows you to optimize personnel costs by finding and connecting employees to the system in regions with lower salaries, adds Anton Golovaty.

According to Yuri Goltzer, Technical Director of the CRM Department of Navicon, the implementation of the concept of "digital banking" gives customers the opportunity to consume banking products completely remotely through digital channels with a minimum of obstacles.

According to a 2018 study from Deloitte Digital, Russia entered the top 5 countries in the EMEA region in terms of digital banking development, even bypassing countries such as Great Britain or France, recalls Yuri Goltzer.

7. Development of identification systems

One of the new trends is the development of identification systems. This trend is a consequence of the transition of banks to a "digital office" in customer service.

Maxim Koltsa, the head of the development department Interprocom"," as an example, cites the launch by the company Mastercard Russia in the service of money transfers by phone numbers and accounts in several social networks.

A mobile phone becomes actually an analogue of an EDS, and banks reasonably insure themselves against identification errors using all types of biometrics. I am sure this direction will actively develop in the near and distant future, - he explains.

8. Taking Threats Seriously

Artem Gavrichenkov, CTO of Qrator Labs, believes that with regard to information security, the industry is gradually coming to an understanding that, fulfilling the "letter" requirements of regulators and certification organizations, most of the checks can be completed, but it is impossible to build a truly safe system, which will have serious consequences after the first real incident. Conversely, after building effective information security processes, licensing and certification issues are solved much more easily and efficiently. If two years ago many considered the revocation of the license as the main risk, now it becomes clear that it is directly related to many other problems.

Now it is even somewhat strange to read this - how can compliance 'on paper' be more important than real business losses? However, here we again turn to the peculiarities of digital transformation processes. In order for this understanding to appear, it took a serious rethinking of the experience. Financial structures are accustomed to generally relying, for example, on interaction with executive authorities and focused more on investigating incidents and finding intruders than on preventing problems. It was not accepted to discuss and analyze the requirements of the regulator, it happened historically, but without analyzing the regulator's motivation, it is simply impossible to perceive and correctly implement all the requirements in the general case, "says Artem Gavrichenkov.

Reducing incident losses becomes as important as enforcing regulations. Moreover, the relationship is being clarified. Thus, the recommendations of the Central Bank of the Russian Federation, which "deployed" banking security from formal compliance with regulatory requirements towards business protection and clarified the need to rethink security policies and high-quality risk assessment, played a significant role in changing approaches to protecting the IT infrastructure of banking industry organizations.

Many financial institutions are starting to take threats more seriously. A similar trend will continue to develop: today we are already talking about mandatory certification of information security solutions, conversations are gradually beginning about regular audits and risk insurance, adds the CTO of Qrator Labs.

Information security, he said, remains a significant priority for financial sector organisations, a priority that has steadily grown: the industry is in the wake-up stages. Market participants have so far inadvertently focused on information security threats, but to a certain extent we can already talk about the achievement by Russian financial institutions of a certain level of maturity in matters of risk protection and management.

Anton Klochkov, key customer manager at ICL-KPO VS, adds that the financial sector is more influenced by IT, so banks have to meet regulatory requirements at a higher level.

You need to understand that 100 percent protection does not exist, but there are a number of mandatory solutions that can reduce risks to the maximum: hardware defenses, sandboxes, application protection, he notes.

9. Application Tools to Improve Customer Experience

No matter how much they talk about projects on blockchain, artificial intelligence and big data analysis, these tools are still in demand mainly only by large banks. The main demand in the banking informatization market, according to Anatoly Nabok, director of corporate customer relations at SysSoft, still falls on applied tools to increase the efficiency of working with clients.

However, most Russian financial institutions already have a good level of "maturity" of business processes, so the main focus is, of course, not on installing CRM systems, but on more complex solutions.

These include knowledge bases for call centers with built-in analytics tools to help improve operator productivity. Another class of demanded solutions are service portals both for the needs of IT departments and for other front and back office processes, which are often created on the basis of Atlassian solutions. True, in these areas, banks often face a shortage of qualified teams with competencies for large high-load projects: there are only a few such teams on the market, so our company pays special attention to the development of this expertise, "explains Anatoly Naboka.

10. Automate routine operations

The great interest of the market is noticeable in solutions that allow you to replace routine mass operations performed by people with automated ones. Konstantin Usakovsky, Deputy Commercial Director of the Applan Group of Companies, notes that among the solutions that allow this to be done are robotization technologies, machine learning, artificial intelligence, and business process management.

Alexey Kolesnikov, Sales Director of iSimpleLab, believes that this trend is a consequence of a decrease in the margin of classic products and the bank's desire to maintain profitability from them.

Alexey Trefilov, director of ELMA, adds that to minimize the routine, banks use bots and other modern automation technologies.

Chatbots are also being introduced to serve internal consumers. Employees turn to internal service processes using instant messengers. In order to arrange a business trip, it is enough to write a bot. He will fill out the documents, and he will pick up tickets, - explains Trefilov.

11. Big Data Processing

Another trend is related to the introduction of technologies for processing big client data (Big Data).

Data is not just "new oil": in the financial sphere, data is new money. Therefore, banks actively involve their clients in interaction with the company and painstakingly collect information about each of their "digital traces": communications with the bank, payment history and even activity on social networks, forums and blogs. Everything in order to assess the trustworthiness of customers when offering them products as objectively as possible, as well as to form individual service packages and personalize all communications, "says Yuri Golzer, Technical Director of the CRM Department of the Navicon IT company.

Sergey Sherstobitov, CEO, Angara Technologies Group the key trend in the Russian banking informatization market is the introduction of its own analytics practices. big data He explains this by the fact that now it is ripe, IT infrastructure a huge array of data from heterogeneous sources has been collected, which must not only be collected and stored, but also analyzed.

Given these factors, we see how our customers in banks use machine learning algorithms in managing information security risks, develop their own data centers and create Data Scientist departments that structure data and receive valuable insights for business, he says.

At the same time, the need to extract valuable information from the accumulated data bank now arises not only in specialized services. It becomes massive and covers all levels of management: from shareholders and top managers to specialists, and all divisions: from the main income-generating to service and administrative.

This creates new requirements for data management software: data stores, business intelligence applications and business analysis tools are gradually becoming replicated, that is, as ready for use as possible, more accessible and easy to use, equipped with convenient intuitive interfaces and visualization tools for better perception of analysis results, "says Julia Amiridi.

12. Analytics Focus

The higher the status of the manager, the less time he is willing to spend on data analysis and bears more responsibility for making a decision. Therefore, with the growth of the status of the consumer, analysts in the bank change their requirements for IT tools. Analysts and specialists are interested in advanced tools for in-depth study of facts and identification of hidden patterns, middle managers strive to quickly and from different angles analyze the situation for prompt adjustment of their actions, the priority of top managers is monitoring external events significant for the financial industry, control of internal business indicators and instant approximation and analysis of business critical indicators.

As a result, along with heavy analytical platforms, software products appear that are focused on the needs of specific user groups: self-service tools for analysts, which allow you to calculate different indicators and configure cubes and reports without the help of IT specialists, BI portals for managers, mobile analytical applications for owners and top managers, - explains Julia Amiridi, Deputy General Director for Business Development of Intersoft Lab.

13. Outsourcing

A well-built architecture is the key to effectively building the entire bank's business. There are three levels of banking IT architecture. The first is strategic, it includes the goals and objectives of the business, its functions. Then comes the process business model. Based on it, a data model and an architecture of information systems are built. And then what used to be called directly IT architecture appears: a catalog of infrastructure software, hardware and applications.

Now, for example, a hypothetical possibility of centralizing work with current accounts of individuals and transferring it to the Central Bank is being discussed. What then remains the most commercial bank? The CRM system and front become the core, and sellers and productors become the key employees, and everything else can be outsourced. The role of the main system moves from ABS to a single front system, CRM and analytics. For a bank that implements a service model, risk management, payment processing and accounting processing are the main ones, "said Alexey Katrich, commercial director of Technoserv Consulting.

Banks will choose where to take risk management services, processing, where to host accounts and where to use accounting. And, of course, the bank must create optimal channels through which it will work with customers. These channels can also be purchased as an external service. Now there are suppliers who offer them in the cloud.

At the same time, the trend is such that many banks are already ready to outsource their internal processes. They realized that back office and accounting functions were not competitive advantages; in order to optimize the cost of them, it is better to centralize them. A single back-office center could be created either as a common one for several banks, or given to an integrator, similar to how common processing centers for payments have already been created, adds Alexey Katrich.

14. Changing requirements for banking networks and their data centers

Continuous growth of the level of informatization of banks, large-scale introduction of virtualization, containerization, cloud services, the growth of mobile users, the evolution of ASIC production and architecture, the need to form high-performance clusters for processing large amounts of information, growth of volumes and granularity of transmitted traffic, mass use of public networks for corporate needs, disadvantages of traditional networks - led to a change in the requirements for banking data networks and their data processing centers.

According to Andrey Gorshkov, Director of the AMT Group Network Integration Department, the requirements for modern banking data centers, in addition to the traditional requirements for fault tolerance, high availability, and reducing growth in infrastructure costs, also include:

• Move from a fully physical infrastructure to a virtual infrastructure, then increase network infrastructure performance requirements.
• Flexibility, rapid reconfiguration of infrastructure to changing business requirements, instant response in providing resources and services.
• Resource mobility, support for migration mechanisms, not dependence on physical transport and IP addressing, the connection of each virtual resource to each;
• Visibility and traffic control, both in the physical infrastructure and in the virtual.

Ensuring the above requirements, according to the representative of "AMT Group," contributes to the introduction of new technologies:

• Flat data center networks - CLOS architecture;
• Automation through the use of dedicated controllers and SDNs;
• Use Overlay, VXLAN, and BGP for both data center networking and data center interoperability.
• The use of specialized products for creating copies of traffic and analyzing it is network packet brokers.

15. Migrating to All Flash Solutions

In the field of hardware supplies for banking informatization, changes are slower, but here you can also identify an obvious trend - the transition to All Flash solutions. If they were previously determined by application requirements for high performance storage systems (for example, in high-load databases or for loading operating systems in virtualization environments), today they dominate the enterprise application environment.

The entry into the storage market, first by IBM, Violin and Pure Storage, and then by other manufacturers, originally designed to work exclusively with Flash chips, as well as the recent emergence of read intensive SSD drives, significantly reduced the total cost of ownership of All Flash solutions and brought it close to HDD solutions. We expect that the growing trend of storage manufacturers using built-in compression and data deduplication technologies will further enable enterprise customers to phase out traditional storage arrays in favor of All Flash solutions. The use of hard drives in storage systems at the moment can only be dictated by specific technical requirements (for example, in video streaming systems), - said Anatoly Naboka, director of corporate customer relations at SysSoft.

Other trends

Maxim Nikitin, vice president of Maykor, CEO of BTE (BTE), predicts that improving the regulatory framework in the field of remote identification in the future will give a new impetus to the development of biometrics and fintech.

Already, Russian banks are using biometric technologies in mobile applications, and also plan to introduce them into ATMs and pos terminals, he explains.

Alexey Trefilov, director of ELMA, notes that in conditions of high competition, banks continue to accelerate business processes - to squeeze the maximum out of them.

A serious attitude to processes allows the "bones" to minimize, and the quality to raise, and faster to the consumer new products and solutions to deliver. Moreover, just flexible and efficient business processes form the fertile ground for the introduction of rare innovative technologies. Without it, they simply will not take root and will not give the business growth, "says Alexey Trefilov.

Maxim Bolyshev, deputy director of the banking department, ON RS-Bank the company, R-Style Softlab believes that due to the growth in the use of modern technologies, one can note a natural trend in the shortage of highly qualified employees in the field of machine learning and data processing.

Their cost is growing, but at the same time the number of personnel in the market, unfortunately, is still increasing at an insufficient pace, he notes.

Mikhail Golovachev, General Director of Amtel-Service, identifies two key priorities of banking informatization - security and client services, which provide customers with convenient and fast communications with the bank in digital channels, personal offers and private banking. He also highlights the priority of the time-to-market requirement, i.e. ensuring the rapid and timely release of new products and services to the market, which is directly related to the IT component.

Cloud and outsourcing of IT and information security functions are trends in the IT resource consumption model. We have already seen a decrease in resistance to these models and the inevitability of their application, at least in less critical areas, in recent years, and predict significant growth in the next 5 years. This will also be facilitated by the new standard of the Central Bank for outsourcing cybersecurity, - adds Mikhail Golovachev.

Alexey Kolesnikov, Sales Director of iSimpleLab, in addition to digitalizing banking services, blockchain and marketplaces, is among the trends in banks' increasing emphasis on mobile platforms in the remote customer service channel.

In the retail segment, we are already talking about the concept of mobile-first, "he says.

Andrey Fedorets, CEO of iDSystems, calls 4 banking IT trends close to his company: the introduction of a payment model for e-invoicing notifications; a new "Express Checkout System"; remote identification of clients (biometric identification); Build portal solutions for customers.

Konstantin Usakovsky, Deputy Commercial Director of Applan Group of Companies, mentions the active development of the market for domestic banking solutions, which in the near future can seriously squeeze foreign developments, which, according to him, is also facilitated by state recommendations.

The development of solutions for corporate customers has a more conservative look than retail ones, and automation is deepening in all areas, from BKO systems to systems for monitoring operations and debt refunds. At the same time, analytical and predictive systems are interesting at almost all points, - he says.

Yuri Goltzer, technical director of the CRM department at Navicon, recalls that in Russia, as in most countries participating in the fintech movement, a serious standardization of the emerging industry is noticeable.

At the beginning of the year, the regulator presented the document "Main Directions for the Development of Financial Technologies for the Period 2018-2020," describing the main prospects and plans for introducing innovations in the financial sector, he explains.

Maxim Koltsa, head of the Interprocom development department, notes that banks will definitely continue the transition from sprawling "everything management" systems to microservices, and one of them will certainly be automation of personalized work with the client, for example, smart credit calculators and programs for selecting banking products.

And of course, one of the key trends in banks is the movement from advanced analytics when working with clients to the use of artificial intelligence and machine learning technologies, gradually moving from the stage of scattered experiments and pilot projects to the mainstream, he adds.

Vadim Shustov, Deputy General Director of Jet Infosystems, believes that the Russian banking sector is heading for a decline in CAPEX today.

Many of our customers are looking towards expanding the boundaries of outsourcing and outstaffing in terms of servicing IT systems. We also observe the active practical interest of financial institutions in the introduction of machine learning and artificial intelligence technologies. Integration projects with business partners and government agencies are popular, allowing banks to enrich their products with functionality (for example, in the field of registration of transactions, registration of insurance, provision of discounts, etc.), - he explains.

Pavel Zubkov, director of the department for work with financial institutions of the company "I-Teco," among the trends includes the support and development of previously implemented systems, or their optimization. In addition, he notes an increase in the share of insourcing in some areas of outsourcing and substitution of imports (software and hardware). Another trend, he said, is associated with the active growth of the "cloud" segment at the infrastructure and individual applications levels.

There is also an enlargement of financial organizations as a result of mergers, acquisitions or reorganization and, as a result, the forced integration of a disparate IT landscape into a single information environment for making competent management decisions and ensuring business continuity, primarily for retail and corporate clients, - adds Zubkov.

Six ways to get involved in the digital race

The development of the Internet of Things, artificial intelligence, social networks and mobile solutions opens up huge opportunities for financial service providers. To take advantage of them, financial service providers are forced to transform their business by adopting digital technologies.

According to Avaya representatives, the financial services industry is gradually moving to an open, integrated and promising technological ecosystem, which, with the proper organization of processes, promises financial institutions numerous advantages in terms of customer experience, promises competitive results of business activity, and also opens up wide opportunities for differentiating services. On August 2, 2017, Avaya published a list of six different options that company representatives believe will help financial service providers remain competitive in a smart digital world.

Video integration

With the ability to create or embed custom communication tools, financial service providers can, in particular, embed real-time video support into online and mobile terminals in order to create even more personalized interactive services. Video integration will make it possible, for example, to simplify the procedure for submitting damage reports as a result of an accident to an insurance company. Or optimize the user's interaction with the ATM with minimal cost. Unsurprisingly, about 80% of financial service providers see video banking as a tool that will improve customer experience and cut costs.

Use of chatbots and virtual assistants

These solutions can support conversations with customers on almost any topic, from information about their accounts to the history of expenses. Moreover, these solutions allow you to make personalized recommendations and suggestions based on historical data and information received in real time. As technology optimizes, the chatbot ecosystem will only expand, industry experts say. This will enable financial service providers to easily automate tasks such as intrusion detection, transfer of funds, comparison of insurance programs, payment, etc. According to experts, European financial institutions can achieve cost savings of up to 90% by automating workflows using solutions like chat bots.

Using robotic consultants

Given that two-thirds of clients of financial institutions in the United States find the functions offered by robotic consultants attractive, it is not surprising to predict that the digital consulting system market will reach $500 billion by 2020. With the help of artificial intelligence technologies, banks can create intelligent mechanisms that will be able to offer advice on almost all issues, from investment opportunities to personalized approaches to saving savings. This is achieved through the use of an open integrated architecture, which allows you to achieve a single unified representation of all banking information of the client.

Creating Virtual Reality

According to Gartner estimates, by 2020, about 100 million people will make purchases in virtual reality. According to Avaya, banking services will also be used in virtual reality. Nearly half the millennial generation is interested in real-time spending analysis tools, according to the study, meaning VR technology is the perfect solution for visualising spending and predicting savings. In the same way, augmented reality technologies can be used to optimize savings. A study by Stanford specialists found that consumers who have seen their retirement-age future digitally are willing to save twice as much money for long-term savings.

Banking Opportunities biometrics

The future of authentication technology in the banking sector can be described in one word - biometrics. Although not yet everywhere, many market leaders are already actively introducing the use of physical characteristics (fingerprints, voice, face, key pressing method) for automatic recognition. Biometrics is one of the most important steps towards digital transformation for PFCs facing today's security realities in mobile services. More than 90% of customers believe that their banks do not protect mobile applications enough, and 41% are confident that they will be hacked. Therefore, about 80% of customers would use voice biometrics if it provided increased security. In general, analysts expect the biometrics market to reach a volume of $17 billion by the end of 2017 with an impressive average annual growth rate (CAGR) of 18.5% over the past 7 years.

Work ahead of the curve when interacting with customers

Ultimately, clients of financial institutions seek a targeted and personalized experience. They want intuition-level service providers to feel and understand their desires and address potential problems even before they occur. With the ability to comprehensively track and collect data and share it across the organization, financial service providers can use training algorithms to provide the necessary intelligence in the last step of resource selection and naturally optimize any interactions. At the same time, a comprehensive analysis of all aspects of consumer contact with the company and its services will allow the financial service provider to work ahead and eliminate any potential problems.

2016:15 trends in banking informatization

After talking with IT companies engaged in the creation and implementation of various solutions for the Russian financial sector, TAdviser identified 15 trends that have a direct impact on the development of the domestic banking informatization market.

• 1. The birth of the financial and technological industry
• 2. Personalization of Products and Services
• 3. Clouds and outsourcing
• 4. New approaches to data protection
• 5. Quick-impact projects and new niches
• 6. Increase in demand for RBS
• 7. Increase the role of call centers
• 8. Finalization of banking software in accordance with the requirements of the regulator
• 9. New Customer Identification Tools
• 10. Banking System Integrations
• 11. Changing IT Infrastructure Approaches
• 12. Consolidation of financial institutions
• 13. Reducing the number of bank branches
• 14. Broader implementation of Basel III risk management and standards
• 15. Playing on a foreign field

You can find out more about banking informatization trends in 2016 15_.D1.82.D1.80.D0.B5.D0.BD.D0.B4.D0.BE.D0.B2_.D0.B1.D0.B0.D0.BD.D0.BA.D0.BE.D0.B2.D1.81.D0.BA.D0.BE.D0.B9_.D0.B8.D0.BD.D1.84.D0.BE.D1.80.D0.BC.D0.B0.D1.82.D0.B8.D0.B7.D0.B0.D1.86.D0.B8.D0.B8 at the link.

Read also

• Russian banking informatization market in 2017 - 2018
• IT innovations in the Russian banking sector
• Bank of Russia regulatory sandbox
• Information technology at Sberbank
• Sberbank's Big Data is growing at a frantic pace. How is this supermassive stored and used?
• Information technology in VTB Group
• Blockchain in Russia
• Prospects for blockchain in the Russian banking sector
• Information security in banks
• Cybersecurity in Russian banks: VMware and TAdviser research
• Technologies for internal audit of financial institutions
• National Biometric Platform (NBP)
• Unified Biometric System (UBS) of Bank Customer Data
• Biometric identification (Russian market)
• Digital transformation of Russian banks
• Central Bank policy in the field of information protection (cybersecurity)
• Bank losses from cybercrime

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