Banks caught in power struggle

Facing tough challenges both from small fintech startups and from global digital giants, incumbent transaction-banking leaders must improve customer journeys, maximise security, minimise complexity, and add value beyond pure payments if they hope to survive and thrive.
This is according to a new report by The Boston Consulting Group (BCG). The report, Global Payments 2016: Competing in Open Seas, is being released today. The report, BCG’s fourteenth annual study of the global payments business, offers a comprehensive overview of the industry, including detailed looks at revenue trends, retail payments by region, and shifting dynamics in wholesale transaction banking. In conjunction with the report, BCG is launching the third edition of its Global Payments Model Interactive, available on bcgperspectives.com, which explores how regions and segments of the payments market will shift from year-end 2015 through 2025. This feature provides interactive charts on the volume and value of noncash transactions worldwide.

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EBA Consultation On The Guidelines On The Criteria On How To Stipulate The Minimum Monetary Amount Of The Professional Indemnity Insurance Under PSD2 (EBA-CP-2016-12)

The European Banking Authority (EBA) launched today a consultation on its draft Guidelines on the criteria Competent Authorities should consider when stipulating the minimum monetary amount of the professional indemnity insurance (PII) or comparable guarantee for payment initiation and account information service providers under the revised Payment Service Directive (PSD2).

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Banks should start preparing for Payment Services Directive 2

Less than 18 months to go before Payment Services Directive 2, one of the most disruptive regulations in the financial industry, kicks in. Stefan Dierckx, CEO of Projective, reflects on the regulation’s impact.  Payment Services Directive 2 (PSD2) is a European regulation that forces banks to open up their account (so called Access to Accounts) and payment infrastructure to third party payment service provides (TPP’s). For banks, opening up their systems, granting access to competitor banks and other commercial players on the market, and potentially losing hard-earned touch points with their end clients is not an attractive scenario. To my surprise, a large number of European banks seem to consider this new regulation as just another rule with which they need to comply. “We still have 18 months to go, the technical standards are not 100% complete yet, so what’s the rush?” is a common reaction on the forthcoming introduction of PSD2.

Banks that have spent some time working out the potential consequences and fully understand the impact of PSD2 on their banking model are actively working on their future offerings under the motto “Offense is the best defence.

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When the ground is moving, banks need to shift to a smarter platform » Banking Technology

The tectonic plates of the banking sector are shifting faster than ever. High street banks are under stress from the massive competitive threats generated by their leaner, technology-driven fintech rivals and challenger banks. These fintech companies are finding success simply by being more efficient or by taking advantage of emerging and highly effective technologies such as blockchain which have immense, if as yet uncertain, potential. The challenge presented by these emerging companies is very real, as they are growing at an exponential rate

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PSD2: 5,000 banks, 15 months and lots of work to do » Banking Technology

In a mere 15 months, approximately 5,000 financial institutions across Europe will be required to provide open access to customer, transaction and payment information via APIs.

“This is a massive amount of work,” said James Whittle, director of industry policy for Payments UK, the representative body for the country’s payments industry, speaking at the EBAday conference held in Milan in June.

In conversations with dozens of EBAday attendees, I reached the same conclusion as Whittle and found different levels of understanding and preparedness for PSD2 – the European Commission’s upcoming policy aiming to open up banking data and payments capabilities to new kinds of service providers.

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PSD2: Another painful compliance exercise or an opportunity?

The European Commission’s revised Payment Services Directive (PSD2) will bring about one of the biggest changes that the banking sector has ever faced. However, as the Commission has indicated this is not a change being dictated by banks; it is a reaction to the ongoing disruption of payments in the digital age.In the words of the Commission, PSD2 “seeks to improve competition by opening up payment markets to new entrants, thus fostering greater efficiency and cost-reduction”. In fact, the payment market has been opening up to new entrants for quite some time – companies such as Xoom and Trustly, who provide payment services that occupy the space between the customer and their bank, are well established.

It has long been recognised that fintechs’ innovative technology and customer service models have the ability to add value to the market, but in order to get the most out of many of their innovations, these firms need wider access to data about a customer and their transactions – more than they hold themselves. PSD2 makes this sharing of customer information possible.

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PSD2 and instant payments: are they a threat to cards?

Autonomous Research recently held a forum to update their customers from the investment and asset management community on recent developments and trends in payments. I was invited to speak, and shared the podium with representatives of high street and challenger banks, Fintech start-ups and payment service providers. 

The audience were considering where to place funds over the next few years, so the questions revolved around who the winners and losers in the emerging payments landscape might be. The main question was whether PSD2 and instant payments are a threat to cards. 

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How transaction banks can leverage the IoT, PSD2 and Open APIs for strategic advantage

Many of the key change drivers in banking, including regulation such as PSD2 and innovations such as open APIs and the Internet of Things (IoT), are pushing banks to embrace and find their place in an integrated digital ecosystem. So what are the challenges – and opportunities – for transaction banks in this connected world? How can cloud and digital strategies converge to enable transformation?

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The future of finance: Banking as a platform

Technology has lent itself well to changing and revolutionizing the world around us. Over time, technology has changed the way we communicate with each other, travel from place to place, conduct business, and how we maintain and organize our lives. As more technology has developed over the years and more industries are tapping into ways they can make new technology work for them, it will soon become a requirement to work with new technology and adapt for the changing world around us.

While there are many industries of which have taken to new technology with open arms, soon every industry will need to do the same in order to survive and thrive.

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Preparing for PSD2 and Open Banking – openPR

The EU’s Directive on Payment Services 2 (PSD2) will accelerate the fragmentation of Europe’s retail banking industry following the global financial crisis. The opportunities brought about by PSD2 will energize banks with strong brand awareness and advanced digital offerings into pushing the boundaries of open banking. Increased competition from card issuers and non-bank third-party providers will prompt steady mid-cap players to fundamentally evaluate their strategies. Banks that are competing on price may see a future in collaborating with third parties, but in doing so will relinquish control over their customer relationships. Whichever path is chosen, the opportunity to offer, create, or co-create new products and services much more quickly is a positive change for the industry.

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