Digital Vision: Digital Banking

Lexicon

Digital Vision: Digital Banking: Lexicon

Cryptocurrency, blockchain, open banking. What do all these mean? Our digital banking lexicon is your guide to the new vocabulary.

API Platforms

Allow financial products and services to be distributed and serviced across third parties. Banks should put API platforms at the heart of their digital strategy to attract ecosystem partners.1

Artificial Intelligence

Promises to replace human cognitive capabilities with robo-advisors, virtual assistants, chatbots and knowledge engineering. It will impact customer service, trading and compliance. Banks should prepare for the human, security and legal impact.2

Augmented and Virtual Reality

Are blurring real and virtual worlds, allowing customers and employees to engage with financial services within the context of their current environment. Financial services should explore potential use cases in retail banking.3

Blockchain

Is a potential game-changer for conducting business with parties without prior trust relationships. Beyond payments or cash management, it could revolutionize audit trails, automated contracting and the microservice economy.4

Challenger Bank

A relatively small retail bank set up with the intention of competing for business with large, long-established national banks.5

Cryptocurrency

A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.6

Cryptoeconomy

A cryptoeconomy offers economic relations that are not directly mediated by the state, opening possibilities for economic organization that do not comply with the state’s conception of economic order.7

Cryptography

Cryptography is the study of abstracting information from undesired users of the same. Cryptography techniques have long been used in the banking industries to ensure the security of monetary transactions including the security of ATM cards, computer passwords, and electronic commerce.8

Digital Transformation

Is the process of using digital technologies to create new — or modify existing — business processes, culture, and customer experiences to meet changing business and market requirements. This reimagining of business in the digital age is digital transformation.9

Distributed Ledger Technology (DLT)

A database that is consensually shared and synchronized across multiple sites, institutions, or geographies, accessible by multiple people. Any changes or additions made to the ledger are reflected and copied to all participants in a matter of seconds or minutes – the foundation of blockchain technology.10

Green Finance

Any structured financial activity that’s been created to ensure a better environmental outcome.11

Hybrid Cloud

Is reviving cloud initiatives by enabling secure and seamless integration of private and public cloud platforms, thus exploiting the benefits of public cloud (pay-per-use, ‘infinite’ bursting resources, agility and innovation) as well as taking advantage of the flexibility and power of cloud-native applications. Banks should urgently assess their data and applications to define a consistent classification allowing to guide their cloud-first strategy.12

Instant Payments

With the move towards a cashless society and ever more connected devices – is making the payments sector evolve rapidly, driven by data and better customer experiences. Banks must explore Instant Payments and other game-changing technologies launched via social networks, chatbots or virtual assistants to offer new P2P, B2B and even M2M services.13

LIBOR

London Interbank Offered Rate, a long-standing banking industry benchmark rate for inter-bank lending, adjustable-rate loans and mortgages. Provides loan issuers with a benchmark for the interest rates they charge on different financial products. The banking industry is currently replacing LIBOR with more up-to-date pricing mechanisms.14

Mobile Banking

Means using an app to access banking features via mobile devices such as smartphones or tablets. These apps are proprietary, issued by the bank where you hold your account, and usually use the same login information as your online banking portal.15

Net Zero

Net zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere. We reach net zero when the amount we add is no more than the amount taken away.16

Online Banking

Means accessing banking features and services via your bank’s website from your computer. You may log into your account to check your balance or pay your electricity bill. You can access additional banking features, such as applying for a loan or credit card, at many banks via your online banking portal.17

Open Banking

Open banking is a system under which banks open up their application programming interfaces for third parties to develop new apps and services. Open banking offers incumbent banks the opportunity to partner with fintechs rather than compete with them.18

Prescriptive Security

Uses big data analytics, realtime monitoring including the dark web, AI and automation to detect potential threats and stop them before they strike. Applications range from cyber protection to fraud management and compliance. Banks should explore integrating it into their Security Operation Centers.19

Quantum Computing

Promises to break traditional combinatory analysis limitations, bringing advances in risk analysis and high-frequency trading within ten years. This will elevate risk by potentially breaking current cryptographic standards, threatening to cause a ‘crypt-apocalypse.’ Banks must start preparing for quantum-safe cryptography.20

Robotic Process Automation

Will bring virtual workforces to manage repetitive tasks, reducing the cost of administrative and regulatory processes by at least 50% while improving quality and speed. Banks need to standardize processes to facilitate automation and engage in ambitious change management programs.21

Smart Machines

Are changing the nature of customers, with smart things working on behalf of their owners for smart home, autonomous transportation, concierge services and more. Likely to transform go-to-market strategies, banks must begin exploring the business, legal and compliance implications.22

1. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
2. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
3. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
4. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
5. https://www.oed.com
6. https://www.oed.com
7. https://medium.com/@NovaMining/crypto-economy-a-new-era-for-the-financial-markets-
573b99a8d17f
8. https://medium.com/@ajay300898/cryptography-in-the-banking-industry-285c92890746
9. https://www.salesforce.com/eu/products/platform/what-is-digital-transformation/
10. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf

11. https://www.weforum.org/agenda/2020/11/what-is-green-finance/
12. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
13. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
14. https://www.forbes.com/advisor/investing/what-is-libor/
15. https://www.forbes.com/advisor/banking/what-is-digital-banking/
16. https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
17. https://www.forbes.com/advisor/banking/what-is-digital-banking/
18. https://www.businessinsider.com/open-banking-api-trends-explained?r=US&IR=T
19. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
20. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
21. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf
22. https://atos.net/wp-content/uploads/2018/07/ATOS_LOOK-OUT_BANKING.pdf

Related Resources

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Digital Vision: Digital Banking

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Adrian Gregory, Global Head of Financial Services & Insurance and Global Head of Atos|Syntel