Traditional and innovative ways of approaching transaction banking “can coexist and drive each other”, according to Marion King, group director of payments at RBS and a panellist at the EBAday annual congress in Amsterdam.
The panel focused on the balance between regulatory compliance in the payments sector and the drive towards customer-focused innovation.
King pointed out that banks cannot yet remove slow payment processes such as payments by cheque, but by engaging with new processes as well, they could find ways to streamline and improve them.
Equally, new technologies and processes must focus around what exactly the end customers want—the client must have control.
King placed importance on addressing the need of the customer, rather than the specific payment problem, and on talking to the customer about their business model.
Sometimes the answer is to combine simple and old-fashioned solutions with complex ones. She said: “It could be something basic right in front of you.”
Another panellist, Marcus Treacher, global head of innovation in payments and cash management at HSBC, added that, as well as listening to what customers want, banks should also anticipate their needs. “It’s about looking at what is possible,” he said.
He suggested that banks should combine the solutions that they know clients want with those that “they don’t know exist yet”, and that in the ‘fail-and-fail-fast’ environment, they can bring a lot of idea to the market quickly.
“The beauty of where we are now is the technology that we have,” he said. “We can prototype.”
Addressing the idea that the drive for innovation is shifting, Karin Kersten, head of transaction banking at ABN AMRO, said: “It is not a shift from regulation to client centricity—they will both be there.”
She argued that when new regulations come in to effect, banks should approach them from a legal and compliance perspective, but should give equal importance to how to make them work as business opportunities.
King suggested that institutions should be “involving the regulator,” and that instead of a relationship where the regulator acts as a disciplinary ‘parent’ figure, the industry should be moving towards collaboration.
According to King, a “partnership approach” would also improve credibility and offer assurance to customers.
When looking to innovate, Treacher stated that, rather than reinventing the whole system, firms should concentrate on the small changes that can make a big difference. “Innovation is in the eye of the beholder,” he said.
Kersten added that firms should “look at what you don’t see.” Using the analogy of a lightbulb without electricity, she suggested that the next big inventions could already exist but needs the correct tools in order to shine.
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