{"id":40504,"date":"2020-10-27T15:08:54","date_gmt":"2020-10-27T07:08:54","guid":{"rendered":"http:\/\/www.upgrademag.com\/web\/?p=40504"},"modified":"2020-10-27T15:08:56","modified_gmt":"2020-10-27T07:08:56","slug":"50-of-philippine-banks-say-processes-are-still-too-manual","status":"publish","type":"post","link":"http:\/\/www.upgrademag.com\/web\/2020\/10\/27\/50-of-philippine-banks-say-processes-are-still-too-manual\/","title":{"rendered":"50% of Philippine banks say processes are still too manual"},"content":{"rendered":"\n

FICO, a global analytics software firm, has released its\u00a0Identity in Digital Banking Survey,\u00a0which found that the complexity and cost of validating the identity of digital banking customers are the top pain points for banks in the Philippines.<\/strong><\/p>\n\n\n\n

Almost 50 percent of respondents surveyed nominated the\u00a0\u2018high level of manual processes to validate customer identities\u2019\u00a0as their top challenge along with\u00a0\u2018consistent collection of supporting data\/documents\u2019\u00a0and the\u00a0\u2018need for physical validation of identity\u2019. The\u00a0\u2018time taken to verify identity\u2019\u00a0and the\u00a0\u2018cost of third-party verification services\u2019\u00a0were nominated by more than 40 percent of respondents.<\/p>\n\n\n\n

\u201cIdentity challenges are intensifying with digital banking,\u201d\u00a0said\u00a0Subhashish Bose,\u00a0FICO\u2019s lead for fraud, security and compliance in Asia Pacific.\u00a0\u201cYou can see from the survey that many Philippine banks still have issues with manual processing that slows down the process, introducing friction into digital applications,\u201d\u00a0said\u00a0Bose. \u201cIndeed, a third of banks still force customers to go to a branch to open a personal bank account. However, lenders will need to shift toward identity verification that is seamlessly integrated into the digital application process and can be rapidly confirmed or risk losing business.\u201d<\/p>\n\n\n\n

FICO\u2019s previous\u00a0consumer study<\/strong>\u00a0found that a large percentage of Filipinos (45 to 67 percent, depending on the action required) said they should be able to complete all aspects of account opening online or on their phone. In fact, if all actions required to complete an account opening could not be accomplished in-session, only 41 percent of Filipino consumers said they would carry out the necessary offline actions as soon as possible. A further 13 percent said they would try a competitor while 5 percent said they would give up completely.<\/p>\n\n\n\n

\u201cFilipinos are comparing their banking experience not just to other lenders but to other digital businesses,\u201d\u00a0said Bose.\u00a0\u201cThe notion that banks can afford to ignore delivering the kind of instant gratification delivered by companies like Uber, Netflix, and Amazon just because they are selling financial products will disappear this decade.\u201d<\/p>\n\n\n\n

Concerns about Authentication<\/strong><\/p>\n\n\n\n

Authentication strategies at Philippine banks are driven more by security than by regulation; concern over the sophistication (50 percent) or volume (29 percent) of attempts to breach access controls is much higher than in the other seven countries surveyed, where, on average, concern levels for sophistication are 43 percent, and volume 30 percent.<\/p>\n\n\n\n

This can partly be explained by fewer and less onerous guidelines or legislation around authentication such as those in the US, Canada, and Europe. However, if criminals are successful it will be only a short time before Filipino regulators impose more rules around authentication.<\/p>\n\n\n\n

\u201cAnother issue here is that many banks in the Philippines are not making separate fraud and authentication decisions,\u201d said<\/strong> Bose<\/strong>. \u201cThey are less concerned with user experience and therefore will ask a customer to authenticate again for a particular action which they consider high risk, even if they have already been identified in the same session.\u201d<\/p>\n\n\n\n

Technology challenges are also impacting the ability of Philippine banks to authenticate customers. The survey revealed that banks feel the time taken for systems change is a problem (45 percent), as well as inflexibility around identity approaches (45 percent). This may be due to rapid innovations in authentication and the number of technologies deployed (biometric authentication, for example, is deployed in 93 percent of respondents).<\/p>\n\n\n\n

\u201cPhilippine banks are often torn between the deployment of multiple point solutions that require integration and broader platforms that span authentication but don\u2019t play well with third-party systems,\u201d said Bose<\/strong>. \u201cNew-breed platforms that allow innovation with AI and integrate more widely are now seen as the next step. A strategic consolidation is needed, and banks will have to determine which technologies are proving effective both internally and with customers to gain an edge over their competition.\u201d <\/p>\n\n\n\n

The survey showed that adoption of this strategic approach is already underway. While only 7 percent of banks say they currently have a common identity management platform or orchestration layer, 78 percent of banks say that they have ambitions to make the move within the next three years.<\/p>\n\n\n\n

FICO\u2019s Identity in Digital Banking Survey\u00a0was produced by Omdia via an online study with 172 banks in May 2020. Executives who had direct involvement in their institution\u2019s approach to identity and authentication for digital banking channels were surveyed. The countries surveyed were: Canada, Colombia, Germany, Malaysia, Mexico, Philippines, UK and the USA. 14 Philippine and 15 Malaysian bank respondents with a minimum of 500k customers were surveyed, and more than one-third of respondents had over 10 million customers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Almost 50 percent of respondents surveyed nominated the \u2018high level of manual processes to validate customer identities\u2019 as their top challenge along with \u2018consistent collection of supporting data\/documents\u2019 and the \u2018need for physical validation of identity\u2019. The \u2018time taken to verify identity\u2019 and the \u2018cost of third-party verification services\u2019 were nominated by more than 40 percent of respondents.<\/p>\n","protected":false},"author":6,"featured_media":38398,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[548,1034,746,1974],"class_list":["post-40504","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-headlines","tag-online-banking","tag-online-payments","tag-online-shopping","tag-online-transactions"],"_links":{"self":[{"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/posts\/40504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/comments?post=40504"}],"version-history":[{"count":0,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/posts\/40504\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/media\/38398"}],"wp:attachment":[{"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/media?parent=40504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/categories?post=40504"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.upgrademag.com\/web\/wp-json\/wp\/v2\/tags?post=40504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}