Information Technology Hot Topics 2019 Maine Bankers Expo April 11, - - PowerPoint PPT Presentation
Information Technology Hot Topics 2019 Maine Bankers Expo April 11, 2019 Michael Flynn Examination Specialist - IT Agenda/Objectives IT Industry Trends Banking Trends Emerging Technology FinTech/Partners Cloud Services
Information Technology Hot Topics
2019 Maine Bankers Expo – April 11, 2019
Michael Flynn Examination Specialist - IT
FEDERAL DEPOSIT INSURANCE CORPORATION
Agenda/Objectives
▪ IT Industry Trends
⬧ Banking Trends ⬧ Emerging Technology ⬧ FinTech/Partners ⬧ Cloud Services
▪ Cybersecurity ▪ Resources ▪ Q&A
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Traditional Banking
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Banking Evolution
Involves the use of digital technologies to remake processes to become more efficient or effective.
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Emerging Technologies
Emerging technologies are commonly seen “transforming” the following areas of financial services:
▪ Credit (marketplace lending, crowdfunding, linked credit products) ▪ Retail deposits (offering deposits without brick and mortar) ▪ Payments (P2P, international transfers, currency exchanges) ▪ Investment Management/Personal Finance (aggregation and or so called robo-advisors) ▪ Back Office/Processing (distributed ledger technology ▪ Capital Markets (trading and settlement, etc.)
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Banking Evolution
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2019 Retail Banking Trends
7 Source: Digital Banking Report Research – The Financial Brand
Surveyors believe the combination of evolving consumer expectation and technology trends are impacting the banking industry more than ever. As more banking interactions are completed on digital devices, increasing amounts of data are being collected and analyzed in real time.
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2019 Retail Banking Trends
Digitalization and innovation initiatives are driving the top 3 trends and predictions for 2019:
▪ Real-time intelligence data integration through the use AI, advanced analytics and cognitive computing (54%) ▪ Customer-centric perspective and the elimination of friction from the customer journey (50%) ▪ Use of APIs for the transformation to an open banking platform (37%)
8 Source: Digital Banking Report Research – The Financial Brand
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Trend in Delivery Channels
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Phygital Delivery Channels ▪ Increasing Digital Customer Base ▪ Redefinition of Convenience ▪ Mobile
10 Source: The Financial Brand
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IT Industry Trends
11 Source: The Financial Brand
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Emerging Technology
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Artificial Intelligence (AI)
AI: The scientific understanding of mechanisms of underlying thought and intelligent behavior and the process of making intelligent computer programs and machines.
▪ Recent increased focus:
⬧ Availability of big data ⬧ Advances in computer programming ⬧ More powerful/faster computing
▪ Applicable in almost every area of financial services
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Machine Learning
Machine Learning: The automated detection of meaningful patterns in data; allows computers to learn from data and experience.
▪ Banking/financial services applications:
⬧ Credit Underwriting/Credit Scoring ⬧ Fraud Detection ⬧ Cybersecurity ⬧ Chat Bots – Customer Interface/digital assistants ⬧ Suspicious Activity Monitoring ⬧ Back Office: Financial Reporting/Recordkeeping
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Application Program Interface (API)
API: An API is a software bridge (connection) between two or more software components:
⬧ Any two discrete software applications that need to communicate with each other require an API. ⬧ An API may create interfaces for web-based systems, operating systems, or database systems, whether hardware or software. ⬧ APIs may be “open” (published and available for free use), or licensed.
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API Uses/Functions - Overview
APIs can be used in the financial services industry to facilitate:
⬧ Access to a company’s systems and/or company-held data, which can either be:
about the customer or account/customer transaction, or
and services
⬧ Transactions between two parties.
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API Uses/Functions - Examples
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▪ FinTech: Financial Technology describes a
business that aims at providing financial services by making use of software and modern technology.
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⬧ Why partner? ⬧ Bank Capabilities ⬧ FinTech Capabilities
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⬧ Business Alignment / Strategy ⬧ Vendor Management Program/ Due Diligence ⬧ Regulatory Responsibility ⬧ Board Involvement ⬧ Ongoing Monitoring
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Cloud Services
▪ Cloud Services: describes a variety of established business
strategies, technologies, and processing methodologies. In general, cloud computing is a migration from owned resources to shared resources in which client users receive information technology services, on demand, from third-party service providers via the Internet “cloud.”
▪ Examples:
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Emerging Technologies
▪ Challenges:
⬧ Strategic ⬧ Due Diligence
⬧ Resources
⬧ Oversight
⬧ Other????
▪ Risks:
⬧ Operational ⬧ Compliance ⬧ Legal ⬧ Strategic ⬧ Other????
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FFIEC/FDIC Directors IT Guidance & Resources
Director IT Resources
https://www.ffiec.gov.htm https://www.ffiec.gov/cybersecurity.htm https://www.fdic.gov/regulations/resources/director/video.html https://www.fdic.gov/regulations/resources/director/risk/it- security.html
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Questions
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Michael Flynn
Examination Specialist - IT mflynn@fdic.gov