“The greatest fear of any financial services firm is not to be able to offer the payment options that are contemporary and evolving”, according to Nigel Dobson, banking services portfolio lead at Australia and New Zealand Banking Group.
Dobson made the comments during a Sibos panel debating whether payment ubiquity is no longer an option in the financial industry.
Dobson added: “Speaking broadly, most financial services firms have an ambition to serve as many customers as they can, and sensibly. We spend a lot of our time thinking: ‘what’s next? And what are the payment choices and the technology that is going to drive payment experiences for all of our customers in the future?’”
Aser Blanco, head of Americas, at Google Cloud Financial Services surmised: “Payments optionality is about leveraging the data and many question why are we not using that all the time and why [the industry] is not always able to complete payments in milliseconds. Adding to Nigel’s point, the industry still questions how they can bring their platforms to the market for payments in a very short amount of time.”
Shelley Swanback, president of product and platform at Western Union, discussed: “One of the challenges of all financial services is being able to offer any option soon enough so that you provide your customers with good experience with that optionality when they’re ready for it, but it’s also about understanding that not every option is wanted in the same regard or same scale in different parts of the world.”
Moderator Jeroen Hölscher, head of global payments and cards practice at Capgemini, then asked the panel whether the need for speed in providing different and immediate options in payments is driven by customer needs for more immediate money transfers, or whether it is more the case of a fintech or a bank having to make the choices or predict a customer’s needs. “To what extent do customers control how your payment choices are made?”, he asked
Dobson answered: “A big part of that is questioning: ‘is the method safe and is it secure, and does it meet with regulation?’ That’s the regulated world in which we operate. We like to live in that world where we can offer that security and responsibility for our customers.”
He added: “There are a lot of leading technologies right now, but unless they are operating in a properly regulated world, where we are meeting our obligations in terms of overall screening, and monitoring as well as delivering that trust and security to our customers, we’ll hold back and wait, or perhaps work with regulators to think more carefully about some of those emerging technologies that I think will be revolutionary.”
With this in mind — the need for speed and collaborating with fintechs — Hölscher asked the panellists if this influenced their views about partnering with other banks to help them better understand the regulation of emerging fintechs. “Can you do it alone, do you need to partner up? What’s your view there?”, he asked.
Swanback said: “Partnerships can play a big role, especially considering how fast technologies have changed, look at application programming interface (APIs) for example, architectures and the like. You’re not alone, you don’t have to do the whole thing yourself.”
To this, Hölscher affirmed: “Sibos is all about community building, right? So is there a role for communities here around standardisation? Is there something the community can do?”
Dobson said: “The most important thing communities can do together, be it locally or globally, is to create standards in governance that allows technology to thrive — you need that setting when it comes to payments. A lot of validation and testing is required. I can’t overstate how important the emergence of global standards is, be that with existing technology or establishing technologies, and that’s a community role.”
Hölscher concluded the panel by asking the panellists what the next five years looks like for the payment sector. “What kind of business models might be enabled by then?”, he said.
Swanback voiced: “The pace of change in payments accelerated during the height of the COVID-19 pandemic. Firms are now learning more about how to be good at changing at a pace, so we can adapt five years from now.”
“There are so many banking solutions and payment solutions available to so many people, but there are a lot of people in the world that are still underserved, so certainly one of our focuses is around that and how we accelerate the idea of financial inclusion and what that looks like, but we won’t be able to do that all on our own — partnerships will play a role in that for us.”
Swanback added: “As well as offering new services we value connecting our clients with responsible partners to products and services that will be relevant for them. I’m hopeful and focused on seeing a big change in that space over the next five years.”
Dobson concluded: “There will be a slow but considered change in financial services operation models. Financial infrastructure will point more decisively toward digital assets and tokenisation — they’ll be key themes to drive financial services. But I don’t think the overall model will change much, we’ll still have buyers and sellers, and borrowers and sellers.”
He added: “Fundamental marketplace principles are still going to be present as they exist in our markets today. But the financial market infrastructure is going to change to make 24/7 real-time payments the norm and more immediately accessible, which will create a parallel world of faster, cheaper and more effective offerings that will drive more business models on top of that — it’ll change the world, just like the internet did 25 years ago.”
Image: Kalim 