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Digital banking and why ‘business as usual’ is not an option

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The financial services industry, like many others, is under pressure. There are the threats of disruption and disintermediation, a complex regulatory environment, fraud and cybercrime and the burden of legacy systems.

But innovations, investments and compliance have emerged key to navigating the global issues militating against the free flow of financial services and inclusiveness.

For Patrice Amann, Microsoft Financial Services Lead, Europe, Middle East, Africa (EMEA) region, “companies must transform so that they innovate and stay a step ahead- all the while staying compliant.”

Indeed, the banking industry has a tremendous opportunity to accelerate the use of cloud and artificial intelligence (AI) as a catalyst to improve competitiveness, drive growth, elevate customer experiences and keep ahead of changing regulations and cybersecurity threats.

These are endless world of opportunities and possibilities for financial institutions, but the key lies in the ability of the organisations fulfill digital requisites.

First, today’s tech-ready organisations must deliver differentiated customer experience and become trusted financial coaches to their customers, helping them to save, spend wisely and grow their money.

They must modernise payments and core banking with the agility to roll out new products and services and digitise multi-party transactions within their business network, making them faster, more secure, and more transparent

They must also manage risk across the organisation, with deep insights and compliance with regulatory requirements, as well as empower employees through teamwork and with intelligent personal assistants that provides them with the knowledge to make better decisions.

The organisations must be ready to combat financial crime by protecting the bank and customers, while lowering compliance costs. Of course, cost has remained a challenge in most countries, like Nigeria, where various services are subject to fees, with consequent controversies.

Trade-offs between security and convenience shape the customer experience as banks onboard, authenticate, interact, and transact with customers.

Amann added: “Recent technology advances are helping financial institutions improve outcomes on both sides of the trade-off equation, reducing friction and enabling consistent application of security measures, from transaction authorisation to secure statement and document sharing.”

Trust and reputation are the cornerstones of banking and protecting proprietary and sensitive data against negligent or malicious use is more critical than ever, yet striking the right balance between too loose and too strict rules is difficult.

Microsoft said it works with financial services regulators and customers to ensure its cloud services help customers meet their strict regulatory requirements. The company’s team has been a part of the consultation period in sharing perspectives on updated outsourcing guidance by the European Banking Authority (EBA) and the final issued guidance, which takes effect on September 30, 2019.

“This longstanding engagement with regulators around cloud computing is one of the reasons more than 90 per cent of Global Systemically Important Financial Institutions (GSIFIs) depend on Microsoft cloud services.

“We make the investments and commitments to ensure financial institutions around the world can meet their regulatory obligations,” the Head of Legal and Regulatory, Financial Services Industry Team, Microsoft Corporation, David Dadoun, said.

Of course, organisations recognise that technology can help them create the new business models required – even integrate past, present and future.

To accelerate digital transformation, Microsoft has focused on removing barriers to adopting cloud technology, such as regulatory and compliance.

It has become the first public cloud provider to enable connectivity with SWIFT Cloud Connect on Azure. In addition, it is previewing two new planned tools to make compliance and cloud adoption easier for financial organisations processing payment messaging in the cloud.

According to the company, the Azure SWIFT CSP Blueprint is now available in public preview and will enable fast and repeatable creation of governed SWIFT environments providing continuous monitoring and audit of CSP controls.

Azure Logic App Connectors for financial services will enable organizations that adopt SWIFT services on Azure to easily connect their apps, data, and devices on-premise or in the cloud.

These offerings will enable more secure and agile operations that will drive cloud adoption for financial institutions that deploy SWIFT on Azure.

The Chief Information Officer, SWIFT, Craig Young, said:


“Cloud computing is a key enabler of a faster, frictionless future and a powerful catalyst for innovative new services. Our community is seizing its potential, and we are committed to supporting them with a range of connectivity options reflecting their diverse approaches and breadth of needs.

“These new developments highlight that commitment, while also underscoring our unwavering focus on security and resiliency as we continue to adapt to an evolving marketplace.”

Microsoft is also the first cloud provider to receive a comprehensive cloud assessment from TruSight, an industry-backed, best-practices third-party assessment utility.

The new TruSight report gives financial services organisations a high-quality assessment of Microsoft’s cloud services based on standardised, industry-designed control assessment methodology.

TruSight and its third-party assessment utility was created by leading banking institutions for the collective benefit of all financial services participants.

The utility gives financial institutions the ability to access assessments on the most widely used third parties across financial services, rather than having to individually conduct assessments.

Microsoft is the first of the major cloud providers to complete the assessment, which covered 27 control domains such as information technology, cybersecurity, business resiliency, privacy, physical security and risk management.

Dynamics 365 Fraud Protection general availability and new feature is addressing wrongful declines and the cloud-based solution may have been generally available since October 1, 2019. It is designed to decrease fraud costs and help increase acceptance rates for customer payment transactions with e-commerce merchants.

Merchants, banks and most of all the customer would highly benefit, as the solution combats payment and account-creation fraud with AI technology that continuously learns and adapts to evolving fraudulent patterns.

The service will include a new feature (Transaction Acceptance Booster) that addresses wrongful declines – a common issue negatively impacting both merchants and banks. This is a daily experience in Nigeria.

Amann noted that putting customers at the center of everything requires being focused on trust, and always enabling our customers – through innovation, and security and compliance investments, as well as industry cloud scale.”

Anglo-Gulf Trade Bank is now the world’s first trade finance bank, hosted entirely on Microsoft cloud, while Bank of New York Mellon, SWIFT and Microsoft turn cloud-based messaging concept into reality during Sibos 2019 conference.

Deutsche Börse and Microsoft have reached a significant milestone by closing a contract for the adoption of cloud services in the financial services industry.

A board member of Deutsche Börse AG, Christoph Böhm, said: “Cloud is a main driver for innovation and has the potential to reshape the financial services industry. As a key technology, cloud lays the foundation for enabling major initiatives that support Deutsche Börse Group’s Roadmap 2020.

“Together with Microsoft as a strong partner, we are very much looking forward to accelerating cloud adoption, for us as a company and for our clients”.

Mobile technology has had a dramatic impact on all aspects of day to day life. In Nigeria, it is one of the electronic payment channels that will drive the newly reverberated cash-less policy.

Already, in the first half of  2019, Mobile Money records showed 104.8 million transactions worth N1.97 trillion; the inter-bank e-payment platform recorded 1.76 billion activities worth N203.35 trillion; and while the National Instant Payment platform generated 504.2 million, valued at N49.35 trillion.

In Hong Kong in particular, most consumers now use a smart phone daily, presenting new opportunities for organisations to deliver content and services directly to their mobile devices.

As one of the world’s largest international banks, HSBC is building new services on the cloud to enable them to organise their data more efficiently, analyze it to understand their customers better, and make more core customer journeys and features available on mobile first.

HSBC’s retail and business banking teams in Hong Kong have combined the convenience afforded by smart phones with cloud services to allow “cash-less” transactions where people can use their smart phone to perform payments digitally.

Today, over one and a half million people use HSBC’s PayMeapp to exchange money with people in their personal network for free. And businesses are using HSBC’s new PayMe for Business app, built natively on Azure, to collect payments instantly, with 98 per cent of all transactions completed in 500 milliseconds or less.

UBS Group uses Microsoft Azure cloud to modernise critical business apps, leverage digital channels, and rethink how global workforce collaborates.

Nedbank has also partnered Microsoft to migrate components of its IT infrastructure to the cloud, making it the first bank in its country to run operations of this scale in the cloud.

The symmetry between the partners has enabled rapid progress in the bank’s transformation journey and is driving its African growth strategy.


Nedbank Group Chief Information Officer, Fred Swanepoel, said: “Transformation is a complex journey, so it is critical to choose partners with a cultural fit, which Nedbank and Microsoft enjoy.

“It’s also important to partner with someone you can trust to not only protect your data and its privacy but to deliver the world class service you require.

“Nedbank believes that financial services providers that get digital right will be more successful at traversing an uncertain future.”

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