As we adjust to the new normal, in the world of payments, banking & FinTech, things have continued to move quickly, in part accelerated by the shift to digital in the wake of COVID-19.
As well as hosting webinars on how Payments businesses and Banks can develop their digital strategies, Banking Circle released its first white paper in a series of reports: ‘Ready for the re-build?’, which can be downloaded here.
Here are other important stories from the industry you may have missed this month.
Growth in UK FinTech industry
Now employing 76,500 people in the UK and generating revenues of £6.6bn per year, FinTech has become one of the world’s fastest-growing sectors. A new Government Trade and Industry report: UK FinTech State of the Nation sets the scene for how the FinTech industry is expected to grow in years to come.
Additionally, the Treasury is launching a full independent review into the FinTech sector to spot growth opportunities.
Financial Inclusion in the Post COVID-19 Era
Financial inclusion is something that Banking Circle has been working to improve for SMEs for a long time. The International Monetary Fund (IMF) has released a report ‘The Promise of Fintech: Financial Inclusion in the Post COVID-19 Era’, which explores how technology can accelerate and enhance financial inclusion, amid social distancing and containment measures.
‘Super apps’ in the financial sector
KPMG has predicted that ‘super apps’ could take over the financial services industry – and it’s already begun in Asian markets. Using WeChat as an example, the report explains that “it is not unusual for a WeChat user to set up a date with a friend via instant messaging, make dinner reservations, book movie tickets, order a taxi and pay for every transaction along the way, all using one single app”.
Find out what that means for the banking industry in a great top-level summary of the report from FinTech Magazine here.
BIS and BoE partner to host FinTech ‘Innovation Hub’
The Bank for International Settlements (BIS) announced that it is expanding its ‘Innovation Hub’ network by partnering with the Bank of England (BoE) to “create a global force for fintech innovation”.
The Innovation Hub network was established in 2019 to encourage central banks to work more closely together on FinTech-related topics. As well as the BoE, BIS is setting up four new centres in North America and Europe.
Find out more here.
Boosting B2B cross border payments
A study from Juniper Research revealed that B2B cross border payments are set to grow by 30% by 2022. This growth has been hindered by the COVID-19 pandemic, which is expected to have a long-lasting effect on the global economy, reaching USD 35 trillion in 2022 from a low of USD 27 trillion in 2020.
The G20 has announced it will be making cross border payments a priority, looking to make transactions faster, cheaper, more transparent and more inclusive to deliver widespread benefits for citizens and economies worldwide, supporting economic growth, international trade, global development and financial inclusion. The report by the Committee on Payments and Market Infrastructures (CPMI) has developed 19 ‘building blocks’ to address underlying pain points identified by the Financial Stability Board (FSB) in an earlier assessment.
Finally, in an article for The Financial Times (paywalled), Jon Cuncliffe, chair of the Committee on Payments and Market Infrastructures and deputy governor of the Bank of England, highlights that cross border payment systems have been neglected for too long, and calls for improving cost, speed and reliability to remove frictions for small businesses.
Commenting on the G20 initiative, Cuncliffe says: “Fixing the plumbing matters. Improving the cost, speed and reliability of payments would remove frictions that prevent many small businesses reaching out to customers beyond their borders. Six out of 10 cross-border business-to-business payments require some kind of manual intervention, each taking at least 15 to 20 minutes. Better systems would make a real difference to many of the poorest and most vulnerable who disproportionately bear the cost of the frictions and shortcomings of the current systems.”