Banks and fintechs will evolve together 

By Karen Coe, Head of UK, Giesecke+Devrient

Banks have previously approached fintech collaboration carefully, recognising that fintechs do some things really well, while other approaches don’t always fit the way banks operate. But signs of partnerships and a new age of innovative cooperation are starting to emerge. This was evidenced by the recent acquisition of digital wallet provider Curve by Lloyds Banking Group, showing a clear intent towards adopting modern fintech capabilities.  

The partnership could signal the start of the new age of banking, where banks and fintechs collaborate, combining their respective strengths to create innovative, more agile financial services. 

Physical branches are on the decline, with thousands closing this year across the UK. With this in mind, banks and fintechs need will explore new ways to service customers at their convenience. One approach could be the creation of centralised hubs where numerous banks and fintechs share the same space. They would essentially allow customers of any bank to access services, including self-service card kiosks, 24/7.  

For fintechs, speed and seamless experience are their strongest currency. For banks, it is trust – and once that trust is lost, it is difficult to regain. Combine the two without compromising and next year could see partnerships that shape the future for fintechs and banks alike.  

Evolving fraud techniques with physical cards 

With AI on their side, finance-driven fraudsters will stop at nothing to target cardholders and steal their cash. The sophistication of scams, such asCard Not Present (CNP) attacks, is only set to increase next year and can drain funds at an unprecedented scale. 

For example, over £600 million was stolen and card-not-present (CNP) attacks increased by 22% in the first half of this year , according to UK Finance figures. 

As CNP attacks continue to rise, scammers find new ways to clone card information such as the card number, expiry date and CCV code without needing the physical card. Social engineering further enables scammers to bypass extensive security measures applied to modern-day cards by exploiting human behaviour – often using a combination of scams, phishing and impersonation. 

To address CNP fraud, physical cards need to evolve from a static tool into a dynamic, adaptive line of defence. We’re already seeing innovative detection and prevention mechanisms such as dynamic security codes being introduced to make the details useless to fraudsters if they are stolen. But there remains a push-and-pull between security and convenience. Everyday payments need to be kept fast and easy where possible, but high-value or suspicious transactions should be subject to more security checks to ensure banks, fintechs and consumers stay one step ahead of fraud.