technology in financial services

Technology in Financial Services

Presented to:Centre of Excellence in Financial

Services Education

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“There is a convergence: the line between what we used to call technology and the business almost doesn’t make sense anymore – the technology is the physical manifestation of the product we make.”

(Christopher Perretta, Executive Vice President and Chief Information Officer, State Street, September 2011)

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Growth in Electronic Transactions

5Source: Canadian Payments Association

Changing Banking Preferences

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Banks’ Spending on Technology

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Implications

Technology is creating new demands and new challenges.

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Demands

Customers are demanding that technology provide:

1. Speed

2. Simplicity

Safety and security are table stakes.

Competition drives innovation.

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Transaction Speed

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Speed

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Simplicity

Customers want transactions to be simple.

Response: - Mobile Banking

- Mobile Wallets

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Mobile Banking Mobile NFC Payments

Result of the investment in mobile:

The MasterCard Mobile Readiness Index recently ranked Canada as the second most mobile payment-ready country in the world, behind only Singapore.

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Payments Technology is an Emerging Business

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Domestic International

Challenges

The pace of change is creating new challenges in:

1.Security

2.Consumer awareness

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Security

“At OSFI, cyber risk has become one of our top concerns.”*

“While the cost of attacking bank systems is going down, the resources needed to identify, monitor, and mitigate against vulnerabilities and potential attacks are increasing.”**

*OSFI Superintendent Julie Dickson, May 2, 2013

**US Comptroller of Currency Thomas Curry, September 18, 2013

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Importance of Customer Awareness

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Customer flexibility and responsibility

Security

More channels to transact = more vectors for fraud Cyberattacks

Response: - Stronger authentication

- Diagnostics

- Predictive analytics (a.k.a. “big data”)

- Technological countermeasures

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Growing demand for

• Mobile commerce / mobile payments

• IT security

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What it Means for Education

Increasingly, financial services needs people who understand the business of finance and the technology of e-commerce.

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