By Rob Haslingden on Tuesday 24 October 2017
Innovation is important. But, in today’s market – particularly across Financial Services, innovation can be as simple as meeting the needs of customers. The global investment of Fintech has been significant in nurturing innovation. We have seen a 215 per cent increase in Fintech investment. This growth is being driven by huge leaps in technology. This then creates a series of important questions, trends and opportunities – which require acting on.
Culturally, many traditional businesses find it hard to align to the Fintech revolution. The different mind-set, make-up and outputs means there is an evident divide in the ways of working.
We are seeing different categories of Fintech. Those who want to capture the market opportunity, and those that want to serve within it. Both are interesting.
New entrants are embracing their opportunity to bring, quickly, new models and new initiatives to the market. They are agile and adaptable in their formation meaning they have little legacy to clean up. They are starting from a clean slate, but have the challenge of brand building.
They are developing components that complement the market and that resolve many of the restraints and obstacles businesses are trying to address.
At Experian, we have embraced these new innovations and we have found some really interesting Fintechs who help us help our clients. In turn, this can help us reach our overarching ambition of better serving businesses, customers and society. Let’s have a look at how.
Working with fintechs such as Avoka we can not only deliver the components of a digital journey, the customer application online, but we can facilitate the entire programme. This includes the customer interface.
Using APIs we combine solutions to complement the necessities of an application. For example, Mitek bring the technology behind document scanning for ID verification, allowing an applicant to take a photo on their smartphone for example, and upload, in an instant.
Airelabs bring alternative credit assessments to reality. Used to supplement credit scores, specifically helpful for those with ‘thin credit files’. Using the art of machine learning, it can mean better lending decisions than scoring alone.
Technology such as email intelligence, which Emailage bring, is exciting. Like they say: “every email address has a story”. Here, working with them, we can find out what that is. This can enhance fraud detection as a result.
As we move into another era, an era that is no longer digital but interactive and owned. Tools and techniques such as behavioural biometrics will be pivotal in reducing risk. Biocatch can create a frictionless experience that also considers over 500 metrics to continuously authenticate the user.
Prequalification may seem old hat but is actually new. Certainly in the way it is being used. Customer journeys can be led by decisions using technology such as HD Decisions and businesses can determine the best action for the customer with a qualified view. In turn, the customer gets a much better more personalised and relevant experience.
This is not every point of difference but shows some of the areas where we are embracing this new surge of innovation. As the landscape continues to develop – from fraud risks to credit decisions and customer expectations, eventually it will all converge. It will all come together in one uniformed process and will no longer be new, but normal.
With so much change, specifically on data holding companies and credit providers, there is a growing importance to have the right foundations, the right partners and the right proposition. It’ll be interesting to look back on this transformation in the future.
Rob Haslingden will deliver a keynote on Open Banking at the AltFi Global Summit 2017 in Amsterdam, November 7th. Click here for the agenda in full.