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Digital product managers at financial institutions have to keep a close eye on what’s coming from their competitors. But if they really want to get ahead of the curve, they should be looking a little farther afield.

Many of today’s hottest digital banking trends actually began at European banks, which have proven themselves far more adept at introducing digital innovation to consumers than their American peers.

European banks are more technologically advanced than their American counterparts for several reasons, including a culture that’s more comfortable with new banking technology and moves quickly to adopt it. While those cultural differences may foster more innovation in Europe, much of what starts over there eventually does make its way to the United States.

Banks that know what’s happening in Europe have a competitive advantage. Card controls, for example, which allow consumers to turn on and off a card that has gone missing, have just recently become commonplace in the United States. But European banks have been offering that service for years. Americans that knew how successfully card controls had spread in Europe could have been among the first to offer it here, rather than playing catch up later.

Here are four European banking trends on our radar now:

1. Digital document capture

European banks have been able to streamline the process of online account openings, so that consumers no longer have to enter a branch to start doing business with a new bank. In order to verify their identity with the bank, European customers can upload a photo of their ID card or passport and a video of themselves, via the remote application process, says Chris Ward, lead analyst at Informa Financial Intelligence in the U.K.

2. A revolution in virtual cards
While only a handful of players are innovating in this area, the innovations are potentially huge. British neo bank Revolut, for example, offers both new and existing customers digital cards, and it gives premium users disposable, one-time use virtual cards as a security measure for shopping online. “This kind of use of virtual cards is likely to become common in the United States,” Ward says.

3. Customer authentication
European banks are not only using digital photos and videos to authenticate new customers, but they’re also using such processes to quickly and seamlessly authenticate existing customers. Customers using the neo-bank Starling, for example, can press an in-app button and record a video of themselves saying their name and a code that appears on screen, automatically authenticating and unlocking the account after a lost password. The ability to do the entire process in-app, without having to close out to check email or text messages makes it more efficient and straightforward for customers.

4. Geo-fencing card controls

European banks are taking card controls a step further than what’s commonly offered now, focusing on geo-fencing and location-based security, Ward says. A consumer might be able to set a card to automatically turn off, for example, if it’s used in a location different than the phone.

As financial services continue to adjust to digital disruption, the institutions with cutting-edge technology that can provide both convenience and security will continue to gain market share from those that lag behind. Knowing about innovation happening globally allows banks to future-proof their business, developing a roadmap of the products and offerings that they must have in order to compete in the years to come.


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