Given the current economic and business climate, banking as a service and payment providers will have to be adept at understanding business and customer requirements in order to facilitate both profitable and seamless experiences. Xavier Coemelck, Regional Vice President of Sales & Services at Entrust explores more in this chat with us: _____ Throughout my career I have witnessed the fintech and tech industries change considerably in Europe and across the world. The greatest trend over the last couple of years has been the focus and improvement of “speed of action” as businesses and consumers expect services, solutions and products immediately. In the past, you may go into your bank branch, you would queue, you might get a ticket, you may ask a question and maybe you would leave with an answer. Today, nobody wants to go into a branch. Nobody wants to wait. Read More: GlobalFintechSeries Interview with Corey Gross, Co-founder and CEO at Sensibill Digital transformation is increasing the speed of action across the tech and fintech sectors. Even before the pandemic, indications were that the fintech industry would use digital platforms, big data and decentralised production to make financial interactions more efficient. The process of interacting with clients and customers has evolved to the point where big data is used to anticipate questions and pain points before customers even make contact, providing digital solutions immediately, or physical solutions more quickly. This improvement in speed and frictionless efficiency is the greatest evolution I’ve witnessed over the years and the pandemic has accelerated the trend further. The fintech industry’s constant need to be unique and provide new propositions even in an existing arena leads to continued innovation and refinement of ideas to best suit the needs of businesses and consumers. An example is innovation around personalised payment cards designed to appeal to a section of the population that still prefers physical payment methods, such as touch-and-go cards or traditional credit cards. Apple has had ApplePay as a digital payment method for a while, but ultimately still pursued a physical payment card, shifting away from blank plastic to personalised materials. The fintech is amid a long-term shift from physical to digital solutions. However, there is still a necessity for physical payment solutions and fintech innovators are improving the accessibility of these services to ensure that everyone, even the underbanked, can use new payment solutions. Entrust has led the development of instant issuance solutions that can provide payment cards immediately in an airport, at a bank branch or via a centrally placed small kiosk rather than customers enduring a wait. This has been vital during the pandemic as “cashless” payments became the singular accepted payment method around the world and everyone required a physical card quickly and securely. In the past, digital transformation required a large upfront financial investment. However, now the digital transformation process is well understood, and boards are supportive of these projects. The main challenges facing the financial sector now can be split between those that need to be tackled immediately and those that are ever-present. The current economic climate is an immediate issue for the banking sector. It’s not enough to maintain savings accounts for revenue because of interest rates so ‘banking as a service’ must look at alternatives to grow. Many institutions have focused on creating and improving digital platforms for customers to provide a greater level of service. These digital platforms and services can range from simply enabling mobile or online banking, to providing similar capabilities as are available in branch, or connecting to digital payment methods. In the long term, these shifts can prove to be a great opportunity to transform the customer-bank relationship into a more efficient sales funnel, generating growth. A more long-term, yet ever present challenge, is being able to align with compliance and regulatory requirements. These regulations put the banking sector under pressure to constantly improve and maintain high standards in operations. I believe compliance can also be an opportunity for businesses to redesign their operating procedures, with the appropriate tools and assistance. Regulations will continue to be important in Europe, driving good behavior for the financial industry. And FinTech companies like Entrust can help the bank stay compliant. Our portfolio includes solutions to identify transactions and access controls that help banking services remain PSD2 compliant, for instance. The pandemic has greatly amplified the influence of emerging technologies. A growing number of financial transactions are conducted entirely digitally: online, through mobile apps or through fintech services prioritising secure identity authentication. The password is being slowly phased out as a solitary authentication method in the payment process. Multi-factor authentication (MFA) methods have taken precedence in modern payment methodologies. Combining multiple layers like voice recognition, facial recognition, fingerprint recognition and device interactions like SMS codes brings a new level of security to the authentication process. This is already becoming a standard for many payment platforms and will continue to be integrated into all digital financial transaction processes. In the next decade we might do away with passwords altogether and only use MFA, capitalising on the technology already present in your personal devices to ensure a seamless authentication experience. Read More: 2021: Back to Business with Fintech Learnings from 2020 Ensuring payment users are securely identified is not enough, and there are several technologies that have emerged to protect payments entering the digital plane. The challenge is that once you decide to execute the payment, there may be someone “listening in” to the data between the mobile device and the banking server, allowing a bad actor to change the content of that payment and suddenly instead of paying £10 to your mobile provider you are actually paying £10,000 to an illegitimate account. Encryption is a crucial step. Encryption technology can make data indecipherable and unalterable, to certify that the person accessing the mobile app is the right person, the payment is going to the correct destination and that it cannot be modified. Encryption technologies will continue to develop and be integrated into all payment methodologies to ensure a seamless security experience. Fintech in 2021 and beyond is an exciting prospect. I believe the existing shortage of resources and skilled personnel will influence the market in a similar way to the evolution of the physical security industry in the last decade. Many organisations have significant shortages in IT departments and already regularly outsource responsibilities to specialist providers. Unless there is a dramatic increase in the number of security experts and IT engineers to meet demand some businesses may not be able to satisfy the most basic of security compliance regulation. That sort of enterprise vulnerability is unacceptable to customers and will increase the integration of the third-party security providers into standard cyber security protocols. I envision fintech security providers will offer more cost effective and more effective solutions to the security challenges of the future as it becomes more financially viable to do so. The advent of quantum computing will also bring technological changes to security solutions in the next 15 years. The post quantum landscape may bring with it new challenges when existing security countermeasures are compromised by the capabilities of the technology. While it may be difficult to prepare for post quantum during a pandemic, some organisations are already beginning to consider the transition, conducting preliminary cryptographic inventory checks to identify any existing vulnerabilities. While not on the radar of every financial organisation due to the pandemic and ongoing digital transformation journeys, its certainly something that will influence the state of fintech in the future. Finally, perhaps the greatest fintech trend I can see changing the market this year and, in the future, will be the introduction of big tech firms into the financial sector as legitimate competitors to traditional retail banks and disruptor financial platforms. This prediction is based on the current trend of financial service digitisation and the use of big data to anticipate customer patterns which are staples of big tech companies like Google and Amazon. Facebook has already announced its digital currency and that is just the beginning. The increasing amount of payments tech firms are processing on social media interfaces or proprietary platforms will eventually lead to these enterprises to obtain financial credentials and leverage their vast libraries of personal information to effectively sell financial products. 2020 has been a year of innovation and forward motion for Entrust, building on over 50 years of industry experience. We are committed to securing our rapidly moving world with new innovations to tackle the cyber security challenges of the future. Within fintech we will continue to roll out innovative solutions in instant issuance, like the Sigma DS4 which launched in 2020, while also continuing our work in encryption and code signing technologies. Additionally, our new Cryptographic Center of Excellence (CryptoCoE) offers unparalleled assistance to businesses in meeting compliance requirements. A team of industry leading subject experts, consultants and engineers from the CryptoCoE’s operational team that can offer cryptographic expertise, tools, and best practices to develop a strong crypto strategy for crypto instances and PKI systems. This can help businesses and organisations avoid a number of problems, including failed audits, service outages, and non-compliance with regulations. Entrust is also taking a leading role in preparing for post quantum computing, by collaborating with other organisations to propose new IETF X.509 certificate formats that place traditional algorithms like RSA and ECC side-by-side with new post quantum algorithms. We are also closely following the work of organisations like the National Institute of Standards and Technology (NIST), which has a project underway to develop algorithms that are resistant to quantum computing and eventually will standardise on them. We want to help companies sustain their IT ecosystem to reduce replacements, maintain system uptime, and avoid costly changes caused by a lack of preparation. Read More: Fintech In B2C – Top Innovators And Their Impact We have learnt a great deal from the trials and tribulations of this year. For me, one of the best learnings has been around the incredible drive for uniqueness and innovation the fintech industry continued to focus on even during the toughest times. The ceaseless pursuit of new and effective solutions to improve fintech products and services exemplifies the best aspects of the industry we are in. Entrust has over 50 years in the industry and has watched the industry grow with a roster of startups that pushed technological boundaries and have brought us to where we are today. That innovative spirit is something to strive for continually and, as cultural resistance and budget restrictions are overcome, that spirit will take advancements even further. Entrust offers an unmatched breadth of digital security and credential issuance solutions at the very heart of online financial interactions. Xavier Coemelck has served as the Director and Vice President of commercial services for IT companies for more than two decades with notable time at Informatica and Oracle before joining Entrust. With a strong background in information technology and a Masters degree in Computer Science from the University of Namur, Xavier is incredibly experienced and a deep understanding of the multicultural nature of the European market.Hi Xavier, we’d love to hear about your journey through the years in fintech, what are some of the biggest trends and evolutions you’ve followed over the years?
Can you talk about some leading ways in which today’s fintech innovators have helped serve the needs of the underbanked and SMBs with innovative payment solutions?
What are some of the biggest challenges you’ve noticed in banking as a service or in banking and payment technologies today; when it comes to aspects users or businesses (or the general workforce in terms of access to payments!) still struggle with?
In what ways have you seen emerging technologies influence the future of payments over the last few years; how do you see this trend shape up in the next decade? And how do you think payment technologies will evolve to create more seamless experiences?
As global fintech trends change and the market shifts due to business environments (and also Covid-19), what are your comments on the state of fintech in 2021 and beyond?
Can you share a little about Entrust’s upcoming plans?
Before we wrap up, a few biggest learnings and tips you’d like to share with fintech innovators and leaders?
Global Fintech Interview with Xavier Coemelck, Regional Vice President of Sales & Services at Entrust
