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September 2019 VOL. 34 NO. 9
Trends and technology: The changing world of banking by Dave Gardner
Inclusion of advancing technologies, balancing the scale between security and convenience, and the pursuit of market opportunities from an onslaught of cyber-proficient millennials mark the challenges now being faced by the nation’s financial services companies. Jeff Wozniak, senior vice president and information security officer with First Keystone Community Bank, confirmed fundamental changes are ongoing in regard to the way banks handle their IT processes. Wozniak He clearly remembers how at one time his organization utilized an in-house computer center, but this system has given way to bank IT systems now referred to as “cores” which are located inside “clouds” operated by specialty providers. According to Wozniak, this new approach frees each bank from the need for its own IT system, while delivering faster submission of data, vastly reduced errors, efficient error correction when necessary, and the reality of quick disaster recovery. “Our data is stored and processed within the cloud at multiple locations, which is part of overall enhanced security,” said Wozniak. Digital imaging of checks is another technology cited as a game-changer by Wozniak. With this, system checks do not need to be circulated through a federal clearing house, creating a
great time-saver for the transactions. This change has allowed First Keystone to have its teller lines open until 4 p.m. with almost instant file reports available. However, as with all technologies, the sword has two edges. “The checks themselves processed with digital imaging are not returned to the customer, and this can cause a problem,” said Wozniak. On the banking retail front, the development of mobile phone apps is a game changer. First Keystone delivers one cyber-page for all devices scaled to different screen sizes, and the associated artificial intelligence can often identify problems as transactions are scored with a risk rating. “We have had strong tech spending for security with firewalls and user authenticity, but we always have to be concerned about the pain threshold security systems can inflict on a customer,” said Wozniak. He explained that apps such as CardValet can restrict use and geography of mobile payment systems, thereby protecting debit and credit cards while also issuing appropriate alerts. Each user manages their cyber-risk by defining when, where and how the app is used. Another financial app, Apple Pay, allows users to make a variety of encrypted purchases. They also can send and receive money from other users through messages. Wozniak added that his organization has been fairly strict in its use of cyber technologies to market to millennials. Keystone maintains a social media presence, but the company deliv-
ers no sales and marketing through it. “All of our social media delivery is very focused,” he said. “We use the social media for awareness, but not direct marketing.” High transparency From a big-picture standpoint, modern technology is making it increasingly easier to manage money, according to Linda Morris, retail branch executive with the PNC Financial Services Group. She noted the banking industry has Morris created hour-by-hour transparency through new technology, and that routine to high-volume transactions can be conducted conveniently with mobile apps and digital check deposits. In fact, the onrushing locomotive of mobile apps have created a need for far fewer bank teller transactions, with ATMs also able to offer more services such as choice of currency denominations with a withdrawal. Express funds can make a deposit available immediately, but cyber-fraud detection is creating a constant struggle as each new app brings an opportunity for fraud attempts. “Technologies such as the use of biometrics to identify a user’s palm print are great measures against fraud,” said Morris. “Every time you add a ‘layer’ within the transactions there’s Please see Banking, Page 5
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