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How developers are helping traditional banks modernise

Bitcoin and blockchain tend to grab headlines in the world of banking. Cryptocurrency is the poster child of “disruptive technology” in the traditionally slow-moving finance industry. But, there are other areas where developers and software engineers must update business-as-usual in banking in order to survive.

According to one survey, 80% of bankers agreed that their institution “needs to complete an assessment over the next three years, but only 15% expected that to lead to a modernisation effort.” Security threats, the demand for mobile banking, and outdated core banking systems are all driving banks to consider massive overhauls to their IT systems. These are the biggest modernisation challenges facing financial institutions – areas where developers and remote software teams can play a significant role in keeping banks competitive.

Making updates to “legacy structures”

In the same survey, 60% of bankers reported that at least one of their major technology challenges is directly tied to aging core systems. “Maintaining legacy systems accounts for 78% of a bank’s IT budget, and 70% of bankers feel their core processes cannot quickly adapt to change,” reports Ripple.

Over time, banks have resisted major changes to their core banking system, the backend system responsible for processing transactions, updates to accounts, and maintaining other financial records. Core banking systems are in charge of processing deposits, loans, and posting credits, as well as updating other reporting and ledger tools.

As consumer-driven capabilities like mobile deposit and peer-to-peer transfer have grown, these core banking systems have had ad hoc updates – but no complete transformation. Core deposit systems were built in the 1970s, written in “old, inflexible programming languages” like Cobalt and PL/I. Oracle’s analysis also found that these “decades-old legacy core systems are inflexible, and each time a bank wants to launch a new product, they must ‘hard-code’ the system, which can take 12 months or more.”

There’s no simple solution to updating a bank’s core system: it’s a massive technological undertaking, but one that banks must invest in to serve its customers well. Engineers can help banks develop an agile, consumer-centric approach to core banking. There are multiple approaches to solving the problem of archaic core systems, and software teams can phase in iterative changes that evolve a bank’s core infrastructure without too much service interruption.

Modernising Fraud Protection

Fraud prevention remains one of the most difficult technological challenges facing banks as cybercriminals get more sophisticated in targeting consumers. To illustrate the challenge banks face in keeping consumer account information safe, Kasperky Lab hacked a “large, publicly-traded financial company in less than 15 minutes.”

The traditional approaches many banks have taken do not work. Authentication requirements and verification processes fail to prevent fraud and provide a negative customer experience. Instead, writes one security expert, “banks should focus on creating better systems and techniques to collect and analyse internal and external data, develop more meaningful algorithms and profiles, execute penetration testing against current strategies, detect changes in transaction patterns and develop more effective solutions.”

To protect consumers from malware and fraud attacks, banks must shift from a reactive to a preventative operations approach. Developers can help banks prepare by modernising the systems that store user data, moving information onto an encrypted cloud. IBM’s AI tool, for example, is said to offer a faster analysis of advanced persistent threats and attacks. Developers must integrate the latest technology into banks’ security systems to modernise.

Digital account opening

Developers will play a critical role in helping traditional banks keep up with the demands of customers on-the-go. Digital account opening is one process where developers and software engineers can have an immediate impact.

Digital account opening (DAO) is the process of opening a bank account without ever stepping foot inside a bank. DAO involves taking the following steps:

  • Collect a customer’s personal identification information
  • Evaluate and approve (or reject) a customer from a risk/fraud perspective
  • Verify the customer’s identity
  • Accept funds digitally and immediately, either through a debit/credit card or with mobile deposit
  • Sync with the core banking system

Many banks are capable of letting customers open an account online through a web browser. Yet, mobile-optimised account opening is an area where the industry has lagged behind. There are some very good reasons why this process is so difficult. Application fraud and strict anti-money laundering laws make it difficult for banks to meet regulatory requirements. An, there are significant security risks: in 2018, banks faced a more than $31 billion in global fraud loss.

But developers who help banks modernise to provide DAO will have an immediate financial impact. One report found that 69% of those surveyed wish to perform all their banking through online and mobile channels. BAI found that around 75% of millennials and more than 65% of Gen Xers prefer to use a digital channel to open a deposit account. The core consumer of the future will expect to be able to open an account, take out personal loans, and transfer funds from any device at any moment. Developers must find a way to build the infrastructure to allow banks to offer DAO.

This article was originally published at https://www.indexcode.io/

KPMG hires Zurich veteran

KPMG has announced the appointment of Graham Boffey as insurance partner in its financial services consultancy team, effective October 01.

In his new role, Boffey will work closely with Simon Ranger, head of insurance at KPMG, to support clients across the UK market. Boffey brings considerable insurance industry experience and most recently acted as head of UK distribution at Zurich Insurance. He began his career at IBM and Barclays, and spent more than a decade at Aviva, where he fulfilled many roles including chief executive officer of Aviva Healthcare, and, later, managing director of corporate benefits.

“It’s great to be heading back to KPMG – its UK leadership team is bold and braced for change and I want to take that mentality out to clients,” said Boffey. “Customers, and society at large, are putting ever greater pressure on big businesses to demonstrate their value and nowhere is that more prevalent than in insurance; a sector designed to help people protect what’s important to them. Simon and the team at KPMG understand that we have to change now to be relevant in the future. I’m looking forward to getting to know the team and their clients to help them make that change.”

“Graham brings with him a huge amount of experience and a practical understanding of how the industry needs to change,” said Ranger. “He’s helped some of the biggest insurers navigate some of the choppiest waters over the last few decades. I’m sure our clients will appreciate his knowledge, and, most importantly, our colleagues will benefit enormously from working with him.”

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UK consulting firms dream of glory at MCA Awards 2019

As the representative body for the UK’s leading management consulting firms, the Management Consultancies Association (MCA) has been its industry’s collective voice for more than six decades. Its members make up more than 60% of the UK consulting industry, and employ roughly 45,000 professionals, while working with more than 90 of the leading FTSE 100 companies and the vast majority of the public sector.

Organised by the industry body, the MCA Awards are now entering their 22nd year, and have long been seen as the benchmark for quality within Britain’s consulting industry. The event commends best practices and high-quality performance in the UK’s £10 billion consulting industry across three areas, with awards for client excellence handed out in the process. As well as demonstrating the value of consulting, the event also shows how clients and consultants working together can achieve the best results in the future.

Since January 2019, a team of expert judges has assessed which nominees across 21 award categories will win the battle for the prestigious industry prizes. In the 2019 nominations, PwC leads with 11 nods, closely followed by Big Four rival EY, which received nine. The ceremony is a long way from being monopolised by the professional services industry’s biggest guns however, with Coeus, Arcadis, Arup, GE Healthcare, NHS England, PA Consulting, Atos, BAE Systems, Curzon Company, iMPOWER, Jabobs, North Highland, Parker Fitzgerald, Elixirr, Sia Partners, Simon Kucher, Vendigital and Atkins all having picked up multiple nominations.

The winners will be announced at this year’s award presentation, which takes place at the Park Plaza Westminster Bridge Hotel. Some 700 guests from consulting firms, their clients, the media and representatives from across all forms of government are expected to take in the proceedings, while the ceremony will be hosted by BBC journalist Clive Myrie. Working for BBC News as London World Affairs Correspondent, Myrie is also Presenter of the BBC Weekend News, while anchoring the famous 10pm slot for BBC News on alternate Sundays.

Looking forward to the event, MCA Chief Executive Tamzen Isacsson said, “After months of preparation, marking and interviews, all eyes are now on the MCA Annual Awards ceremony – which is one of the key events in the UK consulting calendar… The judges have told the MCA the standard has been very high this year and over 40 of the UK’s leading management consultancies will be competing for 21 prizes, including 5 individual awards and 12 project awards. BBC Presenter Clive Myrie will host the awards, which will be promoted in our MCA social media channels, so do please follow us @TheMCA_UK if you are unable to attend on the night.”

Last year 16 different consulting firms managed to scoop a prestigious MCA Award. PwC Advisory and Deloitte Consulting dominated, with the two members of the Big Four grabbing a total of 12 accolades between them. Among the other consulting firms celebrated at the 2018 MCA Awards were Simon-Kucher & Partners, Coeus Consulting, Jacobs, OEE Consulting, PPL, Thales Cyber & Consulting, Arup, Egremont Group, Carnall Farrar, IBM, GE Healthcare Partners, Proudfoot, Turner & Townsend Suiko, and Atos.

IBM PHOTO

Wood and IBM collaborate to transform asset life cycle management

Wood and IBM (NYSE: IBM) announced they have entered into an agreement to conceive and offer compelling new digital products and services that will advance operational efficiencies for customers in industrial and energy markets. This multi-year agreement combines Wood’s engineering innovation and industry expertise with IBM’s advanced market leading technologies in areas such as artificial intelligence (AI), blockchain and analytics.

Wood and IBM today announced they have entered into an agreement to conceive and offer compelling new digital products and services that will advance operational efficiencies for customers in industrial and energy markets. This multi-year agreement combines Wood’s engineering innovation and industry expertise with IBM’s advanced market leading technologies in areas such as artificial intelligence (AI), blockchain and analytics.

The pressure on asset intensive industries is increasing. Development investments, especially for brownfield infrastructure have further added to the cost and complexity of projects. Additionally, more stringent regulations and requirements are increasing industry constraints. In this new economic environment, digital technologies are critical to ongoing success.

The collaboration will ultimately expand to a broad spectrum of industries – including those where Wood and IBM are deeply engaged, such as process industries, automotive, nuclear, clean energy and mining.

Wood and IBM will look to develop solutions and explore new ways to apply AI and advanced Platforms to improve productivity and expand Digital insights. Wood delivers comprehensive services to support its customers across the complete lifecycle of their assets, from concept to decommissioning, across a range of energy, process and utility markets combining unrivalled technical knowledge with a drive for outstanding delivery. IBM is a global cloud platform and cognitive solutions company with capabilities in data and analytics, IoT, mobile, blockchain and security to help clients around the world and across every industry.

The initial phase of the collaboration will focus on oil producers and utilities in three key areas where IBM and Wood can bring immediate value to clients:

  • Project design & planning – combining digital processes and data management tools to provide predictable costs and seamless integration from design to commissioning.
  • Asset insights – providing leading edge analytics platforms to provide insight to asset owners and operators looking to improve operational efficiency, predict operational or safety issues and drive down costs associated with brownfield assets.
  • Project execution excellence – the use of blockchain and cognitive capabilities to ensure effective and safe execution of the work scope through advanced control of work solutions that manage worksites, personnel, materials and equipment in accordance with the project plan.

Bob MacDonald, CEO, Wood Specialist Technical Solutions said: “Building on Wood’s experience in asset development and innovation, this will dramatically advance, and differentiate, our digital skills. By combining Wood’s engineering innovation, understanding of client operational objectives and domain expertise with IBM’s market leading advanced technologies such as cognitive, blockchain, and Quantum, we will help unlock new insights, to learn from and make predictions on data.”

“Across asset intensive industries, the next industrial revolution is being led by digital technologies that are challenging existing business models”, comments John Sullivan, IBM Business Services Leader for the Industrial Sector.” Together with Wood we are embracing this industry opportunity to deliver new Industry Solutions and Services that improve operational efficiencies, advance digital capabilities and build innovative ecosystems.”

Wood is a global leader in the delivery of project, engineering and technical services to energy and industrial markets. We operate in more than 60 countries, employing around 55,000 people, with revenues of around $10 billion. We provide performance-driven solutions throughout the asset life cycle, from concept to decommissioning across a broad range of industrial markets, including the upstream, midstream and downstream oil & gas, power & process, environment and infrastructure, clean energy, mining, nuclear, and general industrial sectors. We strive to be the best technical services company to work with, work for and invest in.

Stewart PHOTO

Meet the $5bn tech boss who grew up without electricity

The BBC’s weekly The Boss series profiles a different business leader from around the world. This week we spoke to Stewart Butterfield, the founder of technology companies Flickr and Slack.

It is not the sort of upbringing you’d associate with one of Silicon Valley’s heavyweights.

But Stewart Butterfield spent the first five years of his life living on a commune in remote Canada after his father fled the US to avoid serving in the Vietnam War.

The young Mr Butterfield and his parents lived in a log cabin in a forest in British Columbia, and for three years they had no running water or electricity.

“My parents were definitely hippies,” says Mr Butterfield, whose mother and father had named him Dharma. “They wanted to live off the land, but it turns out there was a lot of work involved, so we moved back to the city.”

After the family relocated to Victoria, the capital of British Colombia, Mr Butterfield saw his first computer when he was seven, and taught himself to programme from that very young age.

Fast-forward to today and 46-year-old Stewart Butterfield – who founded both photo-sharing website Flickr, and business messaging service Slack – has an estimated personal fortune of $650m (£500m).

But perhaps in part due to his unusual upbringing he says he tries to live frugally.

“In truth I feel guilty spending too much money,” he says. “As a Canadian that world seems very strange and alien to me.”

Mr Butterfield also puts much of his success down to luck.

Mr Butterfield says that his seven-year-old self was fascinated by the first wave of personal computers.

“I was around seven in 1980, it must have been an Apple II or IIE that my parents bought,” he says. “I taught myself to code using computer magazines.”

Mr Butterfield – who changed his first name to Stewart when he was 12 – learned to make basic computer games.

However, he lost interest in computers while at high school, and ended up going on to study philosophy at the University of Victoria. From there he did a masters in the subject at Cambridge University in the UK.

In 1997 he was about to try to become a professor of philosophy when the internet “really started to take off”.

“People who knew how to make websites were moving to San Francisco, and I had a bunch of friends who were making twice as much, or three times as much, as what professors were making,” he says. “It was new and exciting.”

So Mr Stewart decided to give up academia and move to Silicon Valley.

After working as a web designer for several years he launched an online game in 2002 with future Flickr co-founder Caterina Fake, Mr Butterfield’s then-wife.

The game – called Game Neverending – failed to take off, and the pair were running out of cash. Frantically looking for a plan B they hit upon the idea of Flickr, going on to build the photo-sharing platform in just three months.

“The first camera phones were also coming out, and more and more households were getting internet connectivity, and then stuff happened so fast,” says Mr Butterfield.

Launched in 2004, Flickr was the one of the first websites to allow people to upload, share, tag and comment on photos.

Just a year later the founders sold the firm to internet giant Yahoo for $25m – although Mr Butterfield has since said this was the “wrong decision” as waiting longer could have meant a much bigger deal.

Nevertheless he moved on to bigger things with Slack.

It was 2009 and he and some partners had set up another online game, and again it failed. It did, however, spark a brainwave.

“As we were working on the game we developed a system for internal communication that we really loved,” says Mr Butterfield. “We didn’t think about it, it was very much in the background. But after a few years we thought maybe other people would like it too.”

It formed the basis for Slack, a service that today boasts eight million daily users, three million of whom pay for the more advanced features, and more than 70,000 corporate clients.

Slack enables employees to communicate and collaborate with each other in groups at work, and it has grown rapidly. IBM, Samsung, 21st Century Fox and Marks & Spencer are just a few big names to have signed up. Following a number of investment rounds Slack is now valued at $5.1bn.

Chris Green, a technology analyst at consultancy Bright Bee, says it is rare for an entrepreneur to create something successful out of the ashes of a failed project, and “almost unheard of to do it twice”.

“But if you look at Stewart’s career, it’s not just luck, he’s always been innovating in the background and looking for ways to bring order to chaos,” says Mr Green.

“That’s what Flickr and Slack have both done in their own ways.”

Slack does have competitors, though. Microsoft now offers a rival service for free with its Office 365 package, and start-up Zoom boasts a more expansive offering for about the same price.

“There is immense competition from some big well-funded companies so Slack will need to keep evolving,” Mr Green says.

Big tech firms have found themselves in the firing line for not paying enough tax – but Mr Butterfield says he would be happy for Slack to pay more taxes.

“I’d also like to see a more equitable tax policy. I have no problem paying tax. I don’t think companies are taxed enough, or critically, in the right way.”

Regarding the future, Mr Butterfield says that, unlike Flickr, he has no intention of leaving Slack.

“So many things had to go right get to this position – amazing luck was involved – and I am not so smart that I can just make it happen again,” he says.

“So if I ever wanted to see how far I could take it, this would definitely be the time to do that.”

MCA PHOTO

PwC Advisory and Deloitte Consulting steal the show at MCA Awards

The Management Consultancies Association has hosted its annual awards ceremony with numerous firms honoured on the night. While a diverse range of firms were celebrated, however, it was a duo of Big Four firms who dominated proceedings, with PwC Advisory and Deloitte Consulting scooping a total of 12 accolades between them.

The yearly MCA awards have become a major moment in the calendars of the UK’s leading management consultancies over the past 21 years. Organised by the Management Consultancies Association (MCA), the event commends best practices and recognises high-quality performance in the UK’s £10 billion consulting industry across three areas, with 18 different awards for client excellence handed out in the process. These awards recognise consulting firms and their teams for delivering excellent results for their clients, including gongs for best projects in strategy, commercial excellence, performance improvement, change management, social & environmental value and customer engagement.

On the night, the consulting arms of two of the Big Four firms – PwC and Deloitte – stole the show, with 12 winning or highly commended entries in total. Including both outright wins and highly commended nods, PwC scooped seven awards while Deloitte was honoured five times.

PwC

PwC was the outright winner of Project of the Year, for the transformation of Rolls Royce Holding’s future global logistics services as well as for four other awards. The firm also received the prize for Best Use of Thought Leadership for its work with TheCityUK, which recently saw the pair publish articles on the effects of Brexit, and the potential boost to the economy of a thriving professional services sector, among other flagship topics.

The Change Management in the Private Sector was awarded to PwC for its work with Softbank Group – which encouraged investment in automation technologies – along with the award for Commercial Excellence (also relating to PwC’s work with Rolls Royce), and the prize for Digital and Technology, recognising PwC’s role in Direct Line Group’s new insurance initiative for small businesses. Capping an excellent outing for the firm, PwC were also highly commended in the International and the Social & Environmental Value categories, both for the firm’s work with the UK Department for International Development.

Commenting on the MCA Awards success, Marco Amitrano, UK consulting leader at PwC, said, “This is great public recognition of how we’re helping our clients deliver significant, high quality transformation for their businesses. Our winners were up against tough competition and we’re proud to see their work recognised and celebrated at these prestigious awards. The MCA Awards strive to celebrate projects where clients and consultants work together to achieve great results. I’m delighted we had so many projects and individuals shortlisted this year and want to congratulate everyone, especially those who won.”

Deloitte

Deloitte, meanwhile, won three categories as a firm. Following Deloitte’s success at the awards over the last two years, these new accolades bring Deloitte’s total to a staggering 31 over a three year period.

Notably, Deloitte drew praise for its role assisting the Police Service Northern Ireland with the modernisation of its recruitment process – with Deloitte winning the People category subsequently. The firm also picked up the prize for Strategy, winning for its work with Merck, Sharpe & Dohme and the Heart of England and NHS Foundation Trust, exploring new strategies to provide value beyond pharmaceutical drugs for NHS customers suffering from diabetes and lung cancer. On top of this, Deloitte won the Performance Improvement in the Private Sector prize for its work with Syngenta, in order to boost the agricultural output of the firm as well as improving its environmental footprint.

Like PwC, Deloitte also received ‘highly commended’ statuses. In the Digital and Technology category won by PwC, Deloitte was highly commended for the firm’s work with AstraZeneca RPA, leveraging Robotic Process Automation (RPA) to enable Astra Zeneca to boost productivity without compromising on cost or quality. The Change Management in the Public Sector category also saw Deloitte receive this commendation, for their role helping the Greater Manchester Health & Social Care Partnership to work towards being a self-sustaining region with an improved standard of health care and health services.

Commenting via the firm’s website, Deloitte said of the awards glut, “All of our winning and finalist entries are testament to the outstanding work of our consultants who continually go above and beyond to make an impact that matters for our clients and communities.”

Among the other consulting firms celebrated at the 2018 MCA Awards were Simon-Kucher Partners, Coeus Consulting, Jacobs, OEE Consulting, PPL, Thales Cyber & Consulting, Arup, Egremont Group, Carnall Farrar, IBM, GE Healthcare Partners, Proudfoot, Turner & Townsend Suiko, and Atos.