Santander introduces anti-scam warning solution
Santander customers will soon be provided with additional security measures via the firm’s mobile banking app, it was announced this week. In its latest move designed to reduce the risk of fraud on mobile platforms, the finance giant has revealed that its newest solution will involve customers giving more specific details about payments they make, allowing tailored security advice to be given before any transactions take place.
Studies have found that UK bank customers lost approximately £500mn to scams in the first half of 2018 alone, while only £38mn worth of scams were prevented in the whole year, highlighting the losing battle being fought by service providers. Given the prevalence of scams that involve posing as a bank, financial agency or even police officer, Santander hopes to remind customers of the importance of dealing directly with the bank to ensure optimal security and confidentiality.
The initiative is the latest in a series of new solutions introduced by Santander, who recently vowed to invest more than £17.2bn in its digital and technological fields over the next four years, with the aim of increasing customer loyalty through enhanced experience and service. Customers will be required to specify the purpose of each transaction they make, whether it be payment for services or monetary gifts to friends or family. With this additional data, the app will then provide users with warning messages, notifying them of dangers that are known to be associated with particular banking behaviours.
Upon receiving a notification, customers are implored to reach out to Santander independently to verify legitimate transactions, and ensure they are handled in a safe and trustworthy manner. They are also given the option to cancel or postpone payments until the authenticity of a transaction has been confirmed. In addition to the notification system, fingerprint and facial recognition have recently been implemented to optimise account security for customers.
Santander’s latest efforts are part of an ongoing nationwide initiative to reduce the number of people falling victim to fraudsters. Branch staff are being trained to keep up with the increasingly sophisticated methods being used by scammers and spot potential risks before they occur, while police, HMRC and other official bodies are taking steps to increase public awareness of banking scams. Collaborations such as the Take Five Initiative are being widely promoted in support of these efforts.
Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.