Trends in global payments innovation
- Moderator: Sabrina Small, Managing Consultant, Lipis Advisors
- Jon Levine, Co-Head of Institutional Banking, Banking Circle
- Adrian Smyth, Head of Payment Innovation, NatWest
- Michel Vaja, Head of Payments Consulting, Icon Solutions
- Christian Schäfer, Head of Global Payments, Corporate Cash Management, Deutsche Bank
On 30th June, this panel session took a dive into what the experts expect to be the most important innovations in global payments. Moderator, Sabrina Hall, kicked off by gathering the panel’s opinions on the most interesting innovation in the past five years. Overall, the experts agreed that Open Banking and PSD2 have been game changers for the industry’s ability to innovate and deliver new solutions to benefit their customers. Michel Vaja pointed out that whilst there is still a long way to go as the current regulation is far from perfect, it has pushed banks to re-think their definition of value, and the solutions they deliver to their customers.
Banking Circle’s Jon Levine added that his number one recent innovation is instant payments for low value clearing. He explained that although it is not 100% adopted everywhere, it holds huge potential to bring about a seismic shift across the payment landscape and treasury management. The efficiency gains will change the world.
The role of regulation
Adrian Smyth described how he feels regulation has played an important role in promoting innovation, bringing the necessary transparency and enabling banks to introduce benefits for customers that go beyond ticking the regulation box. Open Banking has opened up extra opportunities for innovation, allowing financial institutions to deliver better services.
On the subject of tackling fraud, Christian Schäfer called for the industry to get its act together and build joint solutions. In collaboration, he feels the industry can find the right balance to fight fraud effectively.
Jon Levine added that most banks don’t wait for regulation to tell them to combat fraud: they are on the front foot, running a proactive campaign to root it out and educate customers. Regulation does add a baseline, or a minimum standard, but nothing is stopping banks going further to increase protection for their own institutions and for their customers. Jon also pointed out that fraud will never be solved. Fraudsters continually find new ways to cause trouble so watchfulness will remain the name of the game, indefinitely.
The question of data
Michel Vaja shared the results of recent Icon Solutions research, revealing that banks are prioritising the monetisation of their data, and that this is a strategy rather than a product. He pointed out, though, that before thinking of bringing data to the next level, it must be centralised and clean, and data quality must be ensured to allow it to be accessible and consumable across the business.
The future of innovation
A question from the audience brought the panel around to looking ahead to approaching innovations. The question focused on confirmation of payees, currently only available domestically, and when this is expected to be expanded to cross border payments.
Christian Schäfer believes it depends on client demand. He also confirmed it is something that is being worked on within the industry, but the changing geopolitical environment across jurisdictions, and the varying mindsets do create challenges. Adrian Smyth added that payee confirmation does exist in a number of countries, so the first step is to connect those, followed by utilising the vast amounts of data held by large payment firms.
The panel also discussed how digitalisation is impacting resource requirements, reducing the need for manual data processing and operations teams but opening opportunities for larger teams of engineers, business analysts, product personnel, compliance personnel and more. If you registered for EBAday but missed the session, you can login to watch on demand.