Demand for better digital experiences is increasing, and a robust system for trust and identity is vital to make them work. How can financial services organisations deliver?
From digital transformation and cloud migration to customer and employee experience, the pandemic has accelerated almost every aspect of IT, said Ian Lowe of Okta, opening a virtual roundtable. The attendees, all senior IT executives from across the financial services sector, heard how mobile app projects that would once have taken 500 days are taking 21 after the pandemic, while remote working projects that would have taken 400 days are now being accomplished in 10.
Delivering new digital experiences faster is a bonus for organisations, but these developments are no good unless users trust them. And the foundation of trust is identity, said Lowe. Organisations must keep this in mind as they deliver new applications and services.
Delivering better experiences
Demand for improved digital experiences comes from both customers and employees, attendees at the briefing agreed. One said his business, an insurer, was considering how to improve the total customer experience with digital technology. This meant examining everything from the first touchpoint on a website right through to the customer closing the policy.
Another attendee, also from an insurer, said his company was working on automatically extracting a document from an email and uploading it to a cloud server for review by underwriters. The end goal would be to automate as much of the process as possible and allow underwriters to work faster.
Making this work requires agile technology stacks and the ability to integrate them. For some at the roundtable, digital transformation meant a proliferation of applications and servers, as new ones were introduced but legacy ones still had to be maintained. One attendee, from an international bank, said that his organisation has set a goal of cutting its number of systems from more than 180 to 108 by the end of 2022.
The issue of trust, and how a user’s credentials are verified, is a central challenge. In financial services, there are stiff penalties for a data breach, so nobody wants to share sensitive data with the wrong person. But technology can play a role here, too. Users, especially young people, are increasingly comfortable with biometric identity checks that rely on fingerprints or facial recognition.
But these can be complicated in a regulated sector. Several attendees noted that Apple’s use of Face ID on the iPhone means banking apps can be secured by facial recognition without the bank needing to change the app. But what if something goes wrong with Face ID and the wrong person gains access to the app? The bank doesn’t control or own the Face ID process, and has no way to assess its vulnerabilities. Nevertheless, the bank would be liable for a breach.
Regulatory concerns in general are an issue for financial services. Putting data into the cloud needs to be carefully managed, particularly if the business is global – then data residency rules and regulatory requirements from different jurisdictions all come into play.
Even so, the demand is clearly there. And changing rules, such as Open Banking and PSD2, will push financial services companies to allow users to do more with their data, and do so in a way that is safe and trustworthy.
That requires the technology to be modernised, attendees at the briefing said. One attendee said that after his company had moved to the cloud, there were a lot of “lift and shift” transfers. In other words, applications and services were moved to the cloud with their old problems untouched. Any security concerns or difficulties in connecting them to newer services were still there, but now they were in the cloud instead of on premises.
Those problems need to be fixed, but attendees pointed out that there are significant questions about who does the fixing. There is a shortage of skilled technical staff in the industry, and the most talented candidates are expensive. The types of skills needed are changing too, as the cloud becomes more dominant. One attendee said his department was considering whether it needed to become more of a DevOps team to better handle the new environment.
For many businesses, that is where third parties will be able to help. The need for improved digital experiences will only grow and users will want them ever more quickly. Delivering that might well require expert help.