Exclusive: ‘The year of digital acceleration’ – Paul Taylor, Bank of America in “The Fintech Magazine”

Paul Taylor, Head of Global Financial Institutions, Global Transaction Services at Bank of America, looks back on 2020. He discusses the ongoing need for security and stability, and why established banks continue to be important for customer confidence and delivering the right technology.

If fintechs are an ever growing part of the banking future, the pandemic has underlined why established banks are still the bedrock of our financial system. And when it comes to large global banks, few have stronger roots and better credentials than Bank of America.

As one of the world’s leading financial institutions, Bank of America provides individual consumers, small and medium-sized business and large corporations with a wide range of banking, investing, asset management and other financial and risk management products and services. And, like every other financial institution, it is closely managing the long-term impacts of the coronavirus.

A bank of its size and historical resilience tends to inspire trust, and there’s no question that it has a wealth of experience and resources to provide the direction and stability needed to help rebuild economies and manage business balance sheets.

Paul Taylor, who heads the bank’s global financial institution division for global transaction services, is well-placed to comment on what he sees as a re-evaluation of priorities as a result of the global health crisis.

“Strength and stability will always be some of the top priorities for clients,” says Taylor. “They want to know we can deliver the right technology, and how we are set up to handle liquidity, credit, country, counterparty and client risk, and, of course, know your customer and compliance. “Big banks have the scale and the right security focus and investment, which engenders confidence and helps to keep clients safe,” he continues.

“And, beyond security, we also have terrific insight into market trends and needs. We are data warehouses on a grand scale, with deep knowledge about transactions between different counterparties, and different countries and currency corridors.” All of this data and artificial intelligence (AI) is hard to replicate and manage for most companies, says Taylor. He notes the bank invests around $10 billion every year in technology, $3billion of which is channelled into development initiatives.

When it comes to industry trends, Taylor says the number and variety of channels have been growing for more than a decade, providing a wider canvas for AI, machine learning and other digital innovations. Open banking and the revised Payment Services Directive (PSD2) have accelerated this trend, with application programming interfaces (APIs) playing a pivotal role.

“Investment in APIs is one of the best things to come out of the last 10 years,” says Taylor, highlighting a recent development. “This year we launched a set of new capabilities, built around APIs, which specifically focus on foreign exchange. Our foreign exchange (FX) trading API enables live trading for our clients, something we’ve never been able to do via an API before, and it also allows bundling of trades. Real-time trading is of course critical for FX, and APIs facilitate that.”

Taylor explains that the bank also offers a ‘guaranteed rate’ API. Rates are fundamental for competitiveness in FX markets, and the guaranteed rate API allows Bank of America to provide the best, most up-to-date rates, and to introduce a level of certainty around the rates for a fixed period. Another benefit, says Taylor, is that the APIs allow clients to interact with CashPro, the bank’s treasury middleware for corporate and financial institutions. CashPro is available in several formats, including mobile, and Taylor says there has been a record increase in logins to the mobile app this year and record volumes.

“Since the start of the global health crisis, we’ve had more than 20 days where we processed more than $1billion via the mobile app,” he says. “A few years ago, that amount of trade through a mobile app would’ve been unthinkable. This year, it has been essential.”

Taylor says that the global health crisis has been transformative for digital business and particularly banking. “In 2020 there was a big switch from manual processing, manual payment, the whole manual supply chain, through to digital delivery. We’ve never had a bigger year-on-year increase in mobile payment approvals, nor a bigger increase, in mobile cheque processing – paper cheques being scanned, processed and settled through our mobile app.”

More need for vigilance

The increasing use of digital channels heightens the need for regulation and compliance. Digital risk is a side effect of the many new ways in which we have been working in 2020, and Taylor reiterates the importance of maintaining security. “Regulation creates confidence,” he says, “and what we’ve seen this year is that having a clear framework for quality and delivery, a kitemark of certainty, is a distinct advantage. It’s what clients want when the going gets rough. And, in some ways, it’s now more important than being able to rush a product to market.

This is the reassurance and stability that regulated institutions like Bank of America provide.” Looking beyond the crisis, and the need to build back better, Taylor says that if 2020 has taught us anything, it’s that business continuity is paramount. “The ability to guarantee a service, guarantee security and stability, and simply carry on business as usual – that’s the most important thing,” he stresses. “Whatever shock the world throws up in the future, continuity from a technology standpoint, as well as from a liquidity and credit perspective, is fundamental. Working with a well-capitalised institution, one with enough resources to support you and, naturally, your cash, that’s what will really count in the future we now face.

”If anything, this year has demonstrated that we need to be flexible with technology, channels, connectivity, networks, and with partners.” Partnerships may well be the most important success factor for the future, Taylor adds. “Many companies, financial or otherwise, are trying to bridge the gap between their ability to invest, and their need to stay current in what is an extremely challenging year. Having a reliable partner, or partners, helps to close the gap and minimise risk.

“Our partnerships are extremely valuable. We partner with some of the world’s biggest technology providers and financial institutions, and the most creative and cutting-edge fintechs. Every one of our partners responds to a different need and we have detailed criteria to make the right selection. Above all, we always look to satisfy the needs of our clients.”

With managing risk being key for Bank of America, Taylor believes the bank was well prepared for the recent crisis. “The massive increases we’ve seen in deposits, digital traffic and clients wanting to do business with us this year, speaks of our strength and resilience, and that we are perceived as a haven in times of uncertainty.”

Whatever the next crisis may be, whether another pandemic or a financial meltdown like 2008, Taylor is confident that Bank of America will provide the strength, stability and digital tools its clients need.

This article was published in The Fintech Magazine: Issue #06, Page 73-74