New regulations are forcing huge change within the payments industry. With consumers demanding faster, more digital solutions to enhance their experience, staying ahead of the competition is a significant challenge. Fintechs continue to disrupt and enhance innovation by using open banking and Payment Services Directive 2 (PSD2) to enhance and broaden their digital offerings. It is unclear whether the changing regulations and demands from regulators will help or hinder financial institutions.
With this in mind, the Center for Financial Professionals (CeFPro) conducted an extensive research project with financial institutions, fintechs and payment service providers to gain an insight into the key trends and challenges across the industry.
The research found that many participants still highlighted PSD2 and open banking as an important consideration, despite the first stage implementation date being January 2018. Many are unsure of the opportunities and challenges of open banking and sharing data. In the past larger financial institutions have monopolised the market. The event will aim to address questions such as ‘is this set to change with the apparent ‘levelling of the playing field’ that PSD2 and open banking can offer?’
The project also found that the more traditional players are primarily concerned with keeping customer loyalty. With new account options and product offerings from newer players, can institutions rely on reputation alone to maintain customer loyalty? Many non-banks or challenger banks have far more nimble infrastructures, allowing quicker innovation and time to market. Open banking also makes it easier to transfer accounts from one company to another with limited disruption.
Payments remain at the forefront of the technology advances in the financial services industry. Many institutions are investigating the uses of artificial intelligence (AI) to enhance efficiency and automate processes. However, such automation brings potential vulnerabilities - balancing these must be prioritised to ensure that customers receive an enhanced experience alongside security.
The 2nd Annual Payments Forum looks to address the above challenges and many more, as well as providing a platform for best practices and idea sharing to enhance collaboration and communication. The results of the research project will also be presented at the event, taking place in London on 12-13 February 2019.
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Sophie Bottazzi is a senior research executive at CeFPro
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