FOUR LESSONS LEARNED FROM MONEY 20/20

The front end of the financial services sector is a bit like a glitzy stage show, with beautiful apps and tech innovations taking centre stage. But pull back the curtains, and you’ll often find it’s a mess behind the scenes – AKA the operational back end.   

During COVID, we saw the financial services industry race towards digitisation. A noble aim, but in the rush, many brands ended up fast-tracking tech projects which have turned out to be more of style than substance – projects which now bring unwanted, additional challenges in terms integration and support.   

Money 20/20 – still considered the place to be for FS – highlighted that financial service providers now have a real opportunity to take stock, and again focus on implementing solutions for the long term.   

A wise move, at a time which organisers say will be akin to an ‘industrial revolution’ in financial services – with potential seismic shifts in operations and impacts.  

The financial services sector can only enable this level of change by focusing now on the infrastructure and architecture which will support transformation and optimized customer experiences in the long term.  

Our experts identified four key priorities at the show:  

1 – Acceleration of outsourcing within FS 

The hard truth is that financial service brands just don’t have the capacity to keep juggling urgent, complex, and non-negotiable functions, as well as ever-increasing regulatory requirements – many of which are manual by nature, such as investigations. Let alone deliver their own product and sales development roadmaps.

As we’ve seen in other industries like retail, many FS brands are now turning to external, flexible workforces to maximise operations via people and technology. This enables brands to maximize agility, whatever their size – from start-ups to banking institutions.   

Outsourced teams can pick up swathes of services across the front, middle and back end, including regulatory support.   

2 – New challenges in legal and compliance 

Regulation and compliance have always been a central pillar of financial services – and this has been exacerbated by the Russia-Ukraine conflict, with swathes of sanction packs targeting Russian banks and oligarchs.    

Many financial service providers are under pressure to stay on top of significant new remediation requirements involved with investigating, and providing complex documentation about the ultimate beneficiary owners (UBOs) of client organisations. This includes carrying out screening analysis of to scrutinise Russian oligarchs’ assets, as well as investments. This could well include aspects managed by regulated institutions like banks, insurance companies, hedge funds outside of the Russian territory.     

In terms of solutions, it’s impossible to automate all of the complex processing and sharing involved with these documents – skilled labour remains at the forefront.   

3 – Renewed importance of data  

While pressure is increasing, there’s no let-up in the need for robust data security. Under GDPR, the EU’s data protection authorities can impose fines of up to €20 million or 4% of worldwide turnover for the preceding financial year – whichever is higher – when they fall foul of data security requirements. They may also be forced to cease trading in certain countries if they’re found to have fallen foul of money laundering legislation.   

But as well as being a threat, data remains a largely untapped opportunity. Experts agree that data platforms will effectively become the new operating system for business. Provided it’s clean, data has the power to enhance end users’ lives through simplified and time saving experiences.   

As a BPO player that processes personal data, we became one of the only BPO firms in the world to achieve Binding Corporate Rules (BCRs) deemed ‘The Gold Standard’ for data processing.    

4 – Innovation in the payments industry

Money 20/20 confirmed the rapid expansion of fintechs within the payments industry.   

We saw examples of truly innovative companies, particularly within the ‘buy now, pay later’ category, where the customer pays a percentage upfront and then instalments, often with zero fees and interest. We see potential for mass appeal in these customer-focused solutions.
Many early-stage companies want to grow at pace – but like their large counterparts, the back office is often a mess.   

Throughout the conference we heard universally about the need to collaborate and end working in silos. We expect to see a consolidation, with big companies acquiring start-ups, and heavy investment into enabling scale ups to fulfil their potential. We also expect to see a push towards streamlining the interfaces between different customer apps and platforms.

There are real opportunities for service companies like ours to support and grow with these brands; albeit with care as many are not yet subject to regulation.  

Julien Dumery – International Development Director of Webhelp Payment Services & Webhelp KYC Services 

As the International Development Director, Julien Duméry builds and runs the growth strategy for the internationalization of Webhelp Payment Services & Webhelp KYC Services. He is over 17 years’ experience working in Payment, Fraud Management, Order to Cash and regulatory operations built through his career within American Express, Visa Inc & Webhelp Group.

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Money 20/20 | Webhelp.com