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  • @fintechna 3:36 pm on October 6, 2018 Permalink | Reply
    Tags: , 7e00ff, , , , , , , , ,   

    The brave new world of Open Banking in APAC: Malaysia 

    Following the rollout of regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.

    The brave new world of Open Banking in APAC: Malaysia fintech
    Click/tap to view larger

    Regulatory Developments

    As in Singapore, ’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.

    Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new in financial services in the country. Accordingly, in mid-2017 it launched a Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.

    In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.

    Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.

    Key market initiatives, opportunities & risks

    The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.

    CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.

    Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.

    Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.

    The brave new world of Open Banking in APAC: Malaysia fintech
    Click/tap to view larger

    Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.

    The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.

    AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.

    Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.

    In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.

    This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.

     

    Accenture at Sibos

    We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.

     

    The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:36 pm on October 6, 2018 Permalink | Reply
    Tags: , 7e00ff, , , , , , , , ,   

    The brave new world of Open Banking in APAC: Malaysia 

    Following the rollout of regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.

    The brave new world of Open Banking in APAC: Malaysia fintech
    Click/tap to view larger

    Regulatory Developments

    As in Singapore, ’s approach to Open Banking, while less comprehensive than that of its city-state neighbour, has been to establish a non-mandatory framework and to support banking transformation with the creation of implementation teams. There are currently no timelines for implementation.

    Malaysia’s central bank and principal financial services regulator, Bank Negara Malaysia (BNM), established a Financial Technology Enabler Group (FTEG) in June 2016 to support innovations in the sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new in financial services in the country. Accordingly, in mid-2017 it launched a Regulatory Sandbox framework to allow the testing of applicable technology, including Open Banking.

    In its final quarterly bulletin of 2017 [PDF], BNM focused on open APIs and their potential impact on the country’s financial sector, promising to establish an Open API Implementation Group in early 2018. This was set up in March, with a remit to develop standards on open data, security, access rights and oversight arrangements for TPPs, and to review existing regulations covering controls on customer information.

    Also in March, the BNM set up an Interoperable Credit Transfer Framework (ICTF), which promotes collaborative competition for mobile payments.

    Key market initiatives, opportunities & risks

    The government is prioritising the impact of new technology on the banking sector, with insurers and government agencies a secondary focus. Banks have already seen the opportunities and risks, with some acting to anticipate and benefit from the impact of the country’s vibrant fintech scene, although in the main they lack the capabilities to launch and scale open APIs.

    CIMB, for instance, launched its fintech incubation programme as early as 2015, targeting and mentoring startups for their API platforms. The bank subsequently released a point-of-sale and payments platform. Standard Chartered in early 2017 launched a global developer sandbox with limited API capabilities. Later that year, Maybank also launched a developer portal equipped with 20 APIs, enabling 85 differing operations. Hong Leong Bank, meanwhile, runs a “LaunchPad” contest to develop innovations, which led to the successful launch of five applications in its first year.

    Another significant development that banks in Malaysia seized on was BNM’s granting in December 2017 of an e-money license to WeChat Pay, the payments platform run by Chinese tech giant Tencent. Hong Leong Bank, Maybank, Public Bank and CIMB subsequently partnered with WeChat Pay.

    Partnering with fintech innovators is one way banks in Malaysia are monetising Open Banking APIs; bank-specific POS systems have also been sold with payment-API connectivity. Predetermined pricing models—subscriptions, per-call and flat rate charges—have also been used. So far, successful open API use cases such as Maybank’s Treats Card app, on the Maybank2u platform, have been focused on retail customers.

    The brave new world of Open Banking in APAC: Malaysia fintech
    Click/tap to view larger

    Several global, regional and Malaysian banks have granted developers access to their APIs via publicly available developer portals and sandboxes. Maybank, OCBC and DBS have advertised various applications and partnerships that have arisen from the use of their developer platforms. Some other banks, such as CIMB and Hong Leong, have been more selective, privately choosing which fintechs can access their APIs.

    The use of developer portals and individual selection means that Malaysia has a number of siloed Open Banking use cases and products. The country’s Open Banking future will depend on how banks, fintechs and regulators develop a common framework and infrastructure that supports a cohesive ecosystem. The ASEAN Financial Innovation Network (AFIN), has been established to do exactly that.

    AFIN, which is supported by the Monetary Authority of Singapore (MAS) and the International Finance Corporation, aims to accelerate fintech innovation, digital transformation and build an Open Banking ecosystem across the region. This gives Malaysian fintechs and banks the opportunity to develop the infrastructure and capabilities with other geographies to support a regional Open Banking ecosystem.

    Like Singapore, there are risks in Malaysia’s approach: without enforced compliance, the standardisation and adoption of APIs across the country could prove difficult. There is also uncertainty around when the Malaysian authorities will impose regulation.

    In Malaysia as well, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.

    This article was written in collaboration with Ewa Wojcik, Sam Waldman and Hakan Eroglu. Many thanks for their input, research and analysis.

     

    Accenture at Sibos

    We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.

     

    The post The brave new world of Open Banking in APAC: Malaysia appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 am on October 5, 2018 Permalink | Reply
    Tags: 7e00ff, , , , , , ,   

    The need for change in trade finance 

    The role of the bank in the industry has historically been to satisfy four main areas:

    1. facilitation of secure payment execution
    2. provision of finance
    3. management of data and information
    4. mitigation of risk

    In today’s market all these services are available through non-bank service providers, posing a threat to the trade finance establishment.

    The over-reliance on paper and manual checks means that the current processing of transactions is fraught with inefficiencies and risk, which ultimately leads to higher costs. often seek to protect their margins in traditional trade finance by passing these costs on to the corporate client, driving such clients towards open account trade that is riskier but cheaper.

    This is a unique moment in our industry, when changing regulation, increased availability of emerging and changing expectations from corporate clients are pushing banks to their business models beyond the simple digitization of current processes.

    In a sector particularly vulnerable to fraud, letters of credit, standby-letters-of-credit and other trade finance instruments are used to ensure exporters are paid on time by importers. Meanwhile, banks guarantee that importers receive goods that match the terms of the letter of credit. Bank-intermediated trade provides confidence and fosters trade around the world while providing banks with a low-risk source of revenue that is capital efficient under Basel III.

    However, this business is undergoing deep changes:

    • Globalization of the economy has increased knowledge of international trade, helping corporates to better understand cultural and local market requirements in emerging markets. The ability of corporate clients to be self-sufficient in mitigating some of their transaction risk has fueled the shift to open account financing. Although this type of financing does not guarantee payment in the same way a letter of credit does, it is faster, cheaper and relatively frictionless in comparison to a LOC. The emergence of multiple solutions for clients is now calling for a client-centric approach.
    • Digitalization tends to change corporates’ expectations. Corporate treasurers are younger than ever before, and their experiences in shopping and conducting other personal business lead them to expect the same kind of experience in their professional endeavors. They are increasingly looking for an end-to-end digital experience, encompassing communication and documents, advanced reporting and tailored product and service offers. In parallel to client experience, digitalization is a great way to improve employee experience and strengthen the bank’s compliance and risk monitoring.
    • Particularly in emerging markets, there is a shortage of financing available for small to medium enterprises (SMEs); this is due to the retreat by global banks from these countries and a lack of liquidity and correspondent banking relationships for local banks. Over 60 percent of SMEs in emerging markets are rejected for financing and nearly 30 percent do not reapply according to the ICC. In the volatile and rapidly changing world of trade policy the to build shorter, more agile supply chains is even more pressing and the creation/participation in “marketplaces” becoming a real opportunity, in particular for SMEs.

    Out of this mix of social, technological and regulatory change, next-generation trade platforms and processes are emerging. Distributed business models, which no longer rely on banks being central to the financial supply chain, mean that those institutions are looking at ways to retain their relevance to corporate clients. Traditional competitors are collaborating through consortia of ecosystem players, working for the benefit of the entire industry instead of being self-serving in their approach.

    In the second part of this series, we will look at how and other technologies are helping banks rethink and redesign their approach to trade finance.

    Join me at Sibos 2018, as I moderate the “Delivering the trade environment of the future” roundtable. Register here.

    The post The need for change in trade finance appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 pm on September 30, 2018 Permalink | Reply
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    The brave new world of Open Banking in APAC: Singapore 

    Following the rollout of regulations in the UK and the launch this year of the EU’s Payment Services Directive 2 (PSD2), countries across the Asia-Pacific region are following suit to establish their own frameworks to enable to share select customer data with third-party providers (TPPs), and TPPs to run transactions on customer accounts.

    The brave new world of Open Banking in APAC: Singapore fintech
    Click/tap image to view larger

    Regulatory developments

    ’s approach has matured rapidly to make the city one of the leading jurisdictions for Open Banking in the region. The groundwork was done as early as 2014, under the government’s Smart Nation Singapore initiative to drive the adoption of new digital technologies, starting with open data and payments.

    In November 2016 the Monetary Authority of Singapore (MAS), in collaboration with the Association of Banks in Singapore (ABS), published a comprehensive roadmap—Finance-as-a-Service: API Playbook—which, in effect, set the gold standard for regulatory advice on the topic in Asia. The playbook set out a comprehensive framework that introduced governance, implementation, use cases and design principles for application programming interfaces (APIs), together with a list of over 400 recommended APIs and over 5,600 processes for their development.

    The brave new world of Open Banking in APAC: Singapore fintech
    Click/tap image to view larger

    In May 2017 MAS, the International Finance Corporation and the ASEAN Bankers Association launched the ASEAN Innovation Network. AFIN aims to accelerate financial sector development, boost access to finance, improve the customisability of products and reduce banking costs in the region. AFIN is scheduled to launch their Industry Sandbox, which will sit between banks and fintechs, in late 2018. This interoperable and scalable infrastructure will act as a method to standardise banking infrastructure and data while also allowing institutions to test applications.

    The launch in September 2017 of the Network for Electronic Transfers (NETS) nationwide payments service, including the NETSPay eWallet, was another major milestone. Also in late 2017, the government built an API Exchange (APEX) to serve as a centralised data-sharing platform, which allows government agencies across the city to share data securely through APIs. It has also established a Financial Industry API Register, updated semi-annually, which tracks APIs by functional category as they are launched.

    The approach of Singapore’s authorities to Open Banking has been characterised by a willingness to shape innovation with a comprehensive, non-mandatory regulation and governance framework; to lead by example by opening their own data for APIs, and to establish scalable data practices and a payments infrastructure that underpin innovation in the area. MAS officials have preferred not to force the issue and to approach the development of Open Banking services in an organic fashion, according to comments made in recent media interviews. There is no specific timeline mandated for compliance or adoption.

    Key initiatives, opportunities & risks

    The reason for the regulatory light touch is principally because banks in Singapore see the opportunities of the and are already keenly pursuing them, with competition driving innovation.

    DBS, for instance, launched an Innovation Plan in mid-2015 that had over 1,000 experiments in APIs, cloud computing, microservice architecture and Machine Learning. In May 2016, OCBC Bank launched the first open API developer platform in Asia, Connect2OCBC. CitiBank’s Global Developer Hub opened its first platform in Singapore in late 2016; Standard Chartered did so in early 2017, and DBS in November that year launched an API platform with more than 20 categories and 155 functions. More recently UOB announced plans to launch an open, digital-only bank.

    So far these efforts have been characterised by a focus on retail opportunities, with competition driving banks to move quickly and establish large API platforms while also releasing novel products that showcase Open Banking capabilities.

    Many banks in Singapore, unlike elsewhere in the region, have partnered with fintechs and developers to launch applications that use their publicly available APIs. One example is Standard Chartered’s The Good Life service, which provides its Singapore customers with an ecosystem of merchants that offer deals, alternative payment methods and reward-point options. UOB, by contrast, has been more selective: instead of launching a public developer platform, it has selected specific fintechs and launched applications that leverage their APIs.

    Banks in Singapore have monetised their APIs through a combination of private partnerships with third-party platforms, predetermined pricing models (including subscriptions, per-call and flat-rate charges) and also pricing models determined by sales functions.

    There are risks in Singapore’s approach: Without enforced compliance, API standardisation across the country is difficult. There is also uncertainty around when the MAS will impose regulation.

    Nevertheless, further opportunities will present themselves to drive retail and SME customer adoption with additional services and reduce the cost of servicing banks’ customer bases. Ecosystem platforms for real-time data sharing between banks and regulators will enable new use cases and shared revenue models—and, ultimately, enable banks to build their own TPP services using their competitors’ APIs.

     

    Accenture at Sibos

    We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.

     

    The post The brave new world of Open Banking in APAC: Singapore appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 am on September 29, 2018 Permalink | Reply
    Tags: 7e00ff, convergence, , , portals   

    eCommerce portals: The grand B2B convergence 

    For decades, business-to-business (B2B) commerce has relied on a broad array of organizations, such as trading partners and third-party payment and reconciliation facilitators, to complete any given purchase of goods and services. These organizations have been stitched loosely together by postal mail, telephones, computers and email, as depicted in Figure 1.

    Figure 1.  Illustrative Elements of a Traditional Paper-Based Payments Transaction
    eCommerce portals: The grand B2B convergence fintech
    Source: Accenture Payments research. Click/tap image to view larger.

    Historically, innovations have automated selected components of the above transaction process, but not necessarily allowed for process . For example:

    • Distributed walking plastic purchasing cards automate step 3 for buyers and suppliers. However, the related transaction may still rely on completion of the other steps. As a time-saving feature, purchasing cards have been promoted as a way to avoid steps 2 and 4 above—by presenting a card for payment at the outset of step 2 when goods or services are received. Many buying organizations have, therefore, been reluctant to allow purchasing cards for transactions above a few thousand dollars (in other words, transaction limits).
    • ePayables solutions (also known as virtual cards) have progressed further than purchasing cards as providers have supported directly, or through implemented integrations, automation of steps 2 through 5 above. However, the purchasing process has often been decoupled from payments, resulting in what can be a very manual and intensive supplier enablement campaign process. Furthermore, while ePayables integration for buyers can often dramatically reduce process time and cost, ePayables often present a manual payment acceptance process for suppliers—due in part to the proliferation of disparate, non-compatible ePayables solutions.

    marketplace are widely available and have been used many years for business-to-consumer transactions. Consider holiday shopping, for instance. Traditionally, one would go to a local mall or the outlets to find items for gift-giving. In recent years, many consumers have opted instead to complete some or most of their holiday shopping on the web through an eCommerce portal with access to an array of categories of new or used merchandise.

    As with so many other aspects of commerce, the consumer experience is leading to greater adoption and efficiencies for buyers and suppliers conducting B2B commerce. Through various eCommerce portal alternatives, connectivity with the requisition process can be improved and all of steps 1 through 5 may be converged and automated. Critical aspects, such as trading terms and forms of payment, may be determined upfront and, thereby, automated for any given transaction. Recent announcements by various eCommerce portals have included features that facilitate buyer and supplier reporting and reconciliations.

    Over time, these portals appear to be well-positioned to serve a greater portion of B2B trading activities.

    Also published in the NAPCP TransAct! newsletter

    The post eCommerce portals: The grand B2B convergence appeared first on Accenture Banking Blog.

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  • @fintechna 3:35 am on September 23, 2018 Permalink | Reply
    Tags: , 7e00ff, , , , , frontiers, , , ,   

    New private banking frontiers: mobile apps, convenience & personalization 

    In the first blog in this series, we discussed how seeking to expand their presence in and wealth management should employ digital solutions to provide customers with the and they have come to expect from other companies with which they do business.

    are an essential part of such an integrated private banking strategy. Rather than an “add-on” feature, they should be a central element in providing exclusive services to people with premium needs. These services can range from personalized financial advice (delivered at the frequency the customer desires) to digital feeds of financial media tailored to customer needs.

    A first-class mobile app should be:

    Secure & private

    The app should have two-step authentication and may incorporate a biometric login such as voice, facial or thumbprint recognition, as well as data encryption and fraud protection.

    Innovative

    The app may connect the customer with the private bank via a chatbot or may enable voice-controlled, hands-free interaction. It may aggregate all the customer’s accounts with that institution or with other institutions.

    Robust

    It should provide the customer with a portfolio overview and interactive tools for portfolio analysis and personalization, using both human and -advisory capabilities. The app should support trading, brokerage and foreign exchange transactions as well.
    New private banking frontiers: mobile apps, convenience & personalization fintech

    Interactive

    Through the app, the customer should be able to interact with client services via live chat, through call-backs or through other apps such as WeChat or Whatsapp. The app should also enable direct contact with the financial advisor via direct messaging, direct dial or video conferencing.

    Personalized

    The app should notify the customer of product and service offerings, provide tailored market and economic research and offer educational content using interactive tools and gamification.

    Of course, the question now is not whether private banks should have a mobile app—but how to develop an attractive, value-added offering. Human interaction is still essential to private banking, but wealth managers using mobile apps in concert with other digital technologies will have more time and better insights with which to cultivate their customers.

     

    The post New private banking frontiers: mobile apps, convenience &038; personalization appeared first on Accenture Banking Blog.

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  • @fintechna 3:35 pm on September 21, 2018 Permalink | Reply
    Tags: , 7e00ff, , , ,   

    The art of Open Banking regulation 

    Taking Europe as a blueprint, other jurisdictions are now using as an accelerator to meet their own specific goals, which include increasing competition, reducing costs, fostering innovation and addressing consumer rights.

    Some of the most prominent regulations globally include:

    • PSD2 in the European Union
    • CMA Open Banking in the UK
    • HKMA Open API in Hong Kong
    • Australia Treasury Open Banking
    • Other countries in Asia Pacific (e.g. Japan, Malaysia), North America (e.g. US, Canada) and Latin America (e.g. Brazil, Mexico) are currently investigating Open Banking regulations.

    In some cases, the regulations are moderate and favor the banking industry, while others more aggressively favor competition, which could potentially threaten ’ existing business models and revenues.

    To some degree this depends on which of the multiple levers regulators use to achieve their specific goals, including:

    • Target group: Are all banks regulated or a selected set of banks?
    • Product scope: What banking products are targeted? The more products are affected, the more banks will have to find strategies to defend their existing business or take a leader position by innovating themselves.
    • Use cases and access types: What type of use cases and access operations can be performed on the regulated products? Banks could lose their role as the trusted gatekeeper for customers, particularly where regulations require banks to open their networks to allow third parties to initiate transactions.
    • Cost of usage: What are the costs for third-party providers to use the APIs? Most regulations require banks to open up access for free: in such cases, banks need to find ways to monetize Open Banking.
    • Level of openness: Who has access to the APIs? In some cases, regulations allow TPPs to register with the authorities once and gain access to banks’ APIs without any contractual agreements or bank-specific registration processes.
    • Level of market involvement: Who is involved in designing the ? Are banks’ concerns and ambitions taken into account?
    • API standards and infrastructure: Who is designing API and security standards and building the central infrastructure for the market? This is vital: multiple standardization initiatives could lead to fragmentation of standards and directory services.

    How should banks act now?

    As Open Banking rolls out worldwide, regulators are watching developments closely to learn best practices and implement a regime that will best meet their goals. However, too much regulation could threaten banks’ revenues and jeopardize their financial stability—which is not in regulators’ interests.

    The art of Open Banking regulation is in finding the right balance between regulation and market dynamics. Banks in both regulated and unregulated markets should join forces now to take the lead in self-regulating rather being forced to act.

    Read my complete article at Finextra for more insights and share your views.

     

    Accenture at Sibos

    We’ll be discussing Open Banking and other topics at Sibos. Come see us at our booth and join us in the conversation around enabling the digital economy. Keep up to date on all the latest from us around Sibos right here on the blog.

     

    The post The art of Open Banking regulation appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 am on September 20, 2018 Permalink | Reply
    Tags: , , 7e00ff, , crucial, , , , shifts,   

    Retail payments: 5 crucial market shifts 

    I always like to start from the beginning. So, let me begin my blog by introducing myself. I recently joined Accenture to lead our North America practice. After more than 30 years in financial services—much of it working with companies across the and commercial payments value chains—I am no stranger to change.

    But in today’s era of digital payments, it is not just velocity of change but the scale that brings with it both opportunity and peril. It is exhilarating, but can be overwhelming. My focus is helping payments players make sense of it all, so they can harness the potential of digital payments to drive their businesses forward.


    Retail payments is in the thick of digital disruption. That should be no surprise. Digital is reinventing daily life fast—how we watch, listen, talk, shop, travel, ride and connect. It is a powerful and profound force of change. One that is ubiquitous for everyone. The combination of consumer demand, evolving technologies and retail dynamics is creating a new future for retail payments with digital payments at the core.

    These are the five market to watch:

    1. Mobile jumps on the S-curve

      Remember when you joined Facebook or made your first online banking transaction? I bet you did it from a desktop computer. I also bet that today, you check social media and bank from your smartphone. This is the trajectory of digital adoption. All roads lead to mobile. While US consumers haven’t embraced mobile payments with the gusto we expected considering their smartphone obsession, a tipping point is near. Accenture research shows that 64 percent of North American consumers plan to use a mobile wallet in 2020—a 39 percent rise in the user base in three years.1

      This is a pivotal moment for payments players. Should they double down on the inevitability of mobile as THE consumer access point or move more deliberatively? History offers a cautionary tale. From Blockbuster and Napster to Borders and Polaroid, there’s a graveyard of companies that took a wait-and-see approach to digital disruption. Digital economies tend to scale toward natural monopolies with most markets consolidating into a handful of winners—Amazon owns nearly half of the US e-commerce market.2 I expect this consolidation to occur in mobile payments too. That’s why payments players should act now to create mobile payments experiences that capture consumer’s hearts—and wallets.

    2. The great vanishing act

      Consumers want payment transactions to disappear. Uber, Amazon and countless online subscription companies have shown that making a payment can be seamless and convenient. So much so that the payment becomes invisible. Consumer interest in frictionless payments is palpable driving recency, frequency and monetary value to digital payment savvy retailers. Consider that visits to US restaurants where payment is by mobile app jumped by more than 50 percent over the last year.3 I expect this interest across all retail categories to gain momentum fast.

      But the payments industry has work to do to meet consumers’ expectations. Today, the payment transaction is often the speed bump—actually, the rush-hour traffic jam—in the retail experience. Research reveals that consumers loathe complex checkouts. In fact, they will not stand for them. Eighty-seven percent of online shoppers abandon their carts due to complex checkout. And over half (55 percent) would not just leave their carts, they would never come back to that retailer’s site.4 The time has come for payments players to make invisible payments a visible priority.

    3. RIP, channels

      Traditionally, companies were built in a linear fashion with stores, call centers, online and mobile—a maze of departments, functional areas and channels. These silos reflect organizational structures and internal complexities, not consumer mindsets and behaviors. Put simply, channels are about companies, not consumers.

      When consumers interact with payments companies and merchants, they want to learn about a product, buy a product, or service a product. They want to do this on their own terms. And in the digital era, they have countless options to do so. For payments players to be truly customer-centric, they have to stop being product- and channel-centric. They must kill channels as we know them, driving integration and absorbing complexity to provide simple, streamlined experiences to consumers. Integration must be so seamless that channels stop existing. Rest in peace.

    4. Recognize. Remember. Recommend. Reward.

      The three Rs of education are reading, writing, and arithmetic. The four Rs of the customer-centric business model: recognize me regardless of my entry point and device, remember my history of interactions, recommend relevant products and services, and reward me for my loyalty. There’s been a wake-up call for payments providers in recent years related to these four Rs. The old days of focusing purely on payments transactions are no more. After all, the digital economy is an experience economy. More and more, the customer (and merchant) experience is becoming a critical differentiator in retail payments.

      As payments players develop customer experiences beyond the transaction—such as providing advisory or expense management services, offering a single view of account information, or curating real-time rewards and deals through partner networks—they should look to digital powerhouses that excel in customer experience. Amazon is a leader. The company recognizes and remembers consumers every time, recommends products they will love, and rewards them. The benefits are mutual. Amazon Prime members spend about $ 1,300 more each year than non-members.5

    5. Security&8217;s silver lining

      There is not a more serious or consequential issue for payments players than security. Without it, nothing else matters. A day does not seem to go by that there isn’t news of a breach. As cutting-edge as their technologies are, even digital-born companies like Facebook and Google are not immune.

      There is a silver lining in this storm for traditional financial institutions. Security is never absolute, and criminals are always getting better at being bad. Protecting data is central to the industry. It always has been. Compare this to the fact that digital competitors have built their business models on packaging and selling data, not on protecting it. The clarion call for payments players is to double down on security, to keep innovating to protect data while it is stored, and while it is in flight. Tokenization is the gold standard now. Expect biometrics and continued migration to multi-factor authentication to be the next wave.

    In future blogs, I will explore these market shifts in detail and how new players are taking advantage of them. In the meantime, I hope to see you at Money 20/20 where Accenture will share more insights on what’s next in digital payments.

     

    1 Accenture, “Driving the Future of Payments: 10 Mega Trends” 2017
    2 Ingrid Lunden, “Amazon’s Share of the US E-Commerce Market is now 49%, or 5% of all Retail Spend” 7/13/2018
    3 NPD Group, “In a Slow Market, US Restaurant Operators Step it Up by Offering Consumers Digitally-Enabled Convenience” 3/13/2018
    4 James Melton, “Getting the Online Checkout Process Wrong Can Be Costly, Research Shows” 8/13/2018
    5 Beth Braverman, “Amazon Prime Members Spend More on the Site— a Lot More” 7/7/2017

    The post Retail payments: 5 crucial market shifts appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 pm on September 18, 2018 Permalink | Reply
    Tags: , 7e00ff, , , , , , , ,   

    How will data shape the future of banking? 

    Guest blogger Tara Brady discusses how -driven value creation can help their .

    The digital revolution and mobile have transformed the way people interact with their bank. This trend is set to continue, with new figures revealing that mobile transactions are set to rise by around 121 percent between 2017 and 2022, and average branch visits are set to drop from seven to four per year by 2022.

    Traditional providers have also been faced with the emergence of challenger banks (such as Monzo and Starling), which are striving to capture the attention of millennials with their agile, digital offerings. The territory of the high street stalwarts is being encroached on by the likes of PayPal and Apple Pay, which have disrupted the payments market, traditionally an area that banks have dominated.

    Customers or fans?

    New entrants have energised their customer base to something often more akin to a fan club, often incorporating gamification principles to encourage customers to use their digital platform, with the ultimate aim of improving their customer retention and online customer experience.

    Driving this is the principle of personalisation, and the ability to customise, which promotes a sense of ownership in the game through self-expression. Having experiences that deliver delight, preferably packaged into social media-friendly personalised snapshots, is what drives many consumers.

    As brand loyalty diversifies and consumers want more personalised experiences, these techniques become a great way to attract and retain customers. Personalisation allows businesses to understand why their customers do what they do, and that they share their values.

    Data is king

    However, what is underlying this ability to personalise and drive delight is data. Data has quickly become king. The value of the UK data market is set to hit £1.1 billion ($ 1.58 billion) in 2018, making it the second-largest data market in the world and the biggest in Europe. No longer just a by-product of transactions and interactions, customer data itself has become a valuable commodity that can be used to give insights into customers’ tastes and habits. Learning how to interpret and influence those tastes and habits is one of the keys to unlocking the power, and the value, of data. Being able to offer customised products based on the trends, demographics and insights derived from the data, as well as providing the platform to bring all these services together, is where providers like Atom and Monzo have raced ahead of the field, finding unique ways to gamify the data they collect.

    Whilst data is king, not all data is created equal. The key is deciphering how best to use it to play to your strengths.

    But it is not just these challenger banks that can harness the value of data—retail banking as a sector is uniquely placed to ride this wave of value creation. Purely in terms of reach, whilst 78 percent of UK adults use Facebook, a full 97 percent have some kind of banking product. So the opportunity is there.

    The evolving banking ecosystem

    As a result, the retail banking industry is beginning to broaden in unprecedented ways. This is partly due to multitudinous new and evolving technologies generating, among other things, completely different access to data. All this is spurring increasingly serious conversations around how the future of banking will be shaped. The key to long-term success will be a move away from the monolithic banking model, towards an evolving ecosystem that encourages competition but also supports success for all. And data represents a major monetisation opportunity in this changing environment.

    It&;s critical though that banks play to their strengths rather than forcing themselves into models within which they don’t truly fit. Established banks do not need to emulate the personalisation and game-logic of the challengers to make a success of this new marketplace. That said, without banks taking a different path and creating different offerings, the ecosystem won’t be able to function. Banks need to understand their natural fit within the future banking ecosystem to give themselves the greatest chance for success and ensure the strongest foundation upon which to build a data monetisation strategy. The potential benefits of a successful approach are ample, but starting from a shaky foundation could bring this tumbling down early on.

    What kind of bank do you want to be?

    Our new point of view, which discusses this topic and asks &;What kind of bank are you?&; and &8220;What bank do you want to be?&8221; provokes an inward look at your place within the future retail banking ecosystem. To read the report in full, please email peter.scoffham@accenture.com.

     

    How will data shape the future of banking? fintechTara Brady
    Senior Managing Director
    Financial Services, UK & Ireland

    How will data shape the future of banking? fintechHow will data shape the future of banking? fintech

     

     

     

    The post How will data shape the future of banking? appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
  • @fintechna 3:35 am on September 8, 2018 Permalink | Reply
    Tags: , , 7e00ff, , , , ,   

    Q2 2018: US credit card issuer snapshot 

    Each quarter, Paul Sammer, Manager in the Issuing offering, compiles key metrics on US consumer cards, tracking spend, receivables, loss rates and returns reported by the largest US .

    US consumers are showing an increased preference for credit cards.  Banks reported robust growth in purchase volume over the past quarter, along with solid growth in receivables and benign loss rates. Read more about the key themes and notable happenings below.

    Key themes

    • Banks reported favorable credit trends in the past quarter as purchase volume and receivables continued to grow, and loss rates remained benign.
    • Credit card purchase volume increased at a significant pace over the past year, led by Capital One, American Express and Chase.
    • Receivables also grew at a healthy rate, most notably at American Express, Capital One and Discover.
    • New products and product refreshes were prevalent in Q2. Many of these new products are offering high-value incentives to open/activate.
    • Investments in digital capabilities are evident across the industry with new all-digital products (e.g., Chase’s Finn), and full-service functionality in digital channels.
    • Bank of America and Chase reported notable declines in card originations in the past quarter (nearly 10 percent YoY).
    • Issuers pointed to rewards (and associated cost) as a basis of differentiation, but there was a general theme of rational competition in most respects.

    Notable happenings

    Transactions

    Citibank completed $ 1.5B acquisition of L.L. Bean credit card portfolio from Barclays; Synchrony and PayPal finalized transfer of $ 7.6B in receivables; Signet Jewelers closed last phase of credit outsourcing, selling its non-prime portfolio to CarVal Investors and Castlelake.

    New Partnerships

    Alliance Data and IKEA introduced new co-brand offering 5 percent rewards on IKEA purchases; American Express announced new partnership with Amazon to offer a small business co-brand credit card; Wells Fargo launched no-fee Wells Fargo Propel American Express card.

    Partnership Developments

    In July, Walmart announced its intent to partner with Capital One and end its Synchrony relationship; Citibank renewed its card partnership with Sears, paying $ 425 million up front in a highly customized structure; Alliance Data and Victoria’s Secret renewed their PLCC partnership.

    New Products/Features

    American Express launched its no-fee, 1.5 percent cash back Cash Magnet card; Citi and American Airlines introduced new no-fee AAdvantage MileUp card, offering 2 miles per dollar; Chase and Hyatt introduced $ 95 annual fee World of Hyatt Card; Chase and Marriott introduced $ 95 fee Marriott Rewards Premier Plus card; Chase and Southwest Airlines introduced $ 149 annual fee Southwest Airlines Priority Card; Synchrony and Belk will introduce a co-brand credit card.

    Mobile & Tech

    Chase announces a partnership with Tock, a high-end dining program.

    Stay tuned for next quarter’s report on US consumer credit card trends.

    Industry trends (based on non-retail card issuers in scorecard section)

    Q2 2018: US credit card issuer snapshot fintech

    1 Total receivables for non-retail issuers at end of 2Q18. 2 Total purchase volume of non-retail issuers in 2Q18. 3 After-tax ROA excludes Wells Fargo, Chase, Bank of America and US Bank, which do not report credit-specific income. 4 YoY = Year-over-year change versus 2Q17. 5 QoQ = Quarter-over-quarter change versus 1Q18. Note: Purchase Volume is reported volume for the quarter (it is not annualized or TTM)

    Scorecard—Q2 ($ in Billions)

    Q2 2018: US credit card issuer snapshot fintech

    1 Chase no longer discloses an ROA measure directly attributable to Card Services. 2 Citigroup: Purchase volume includes cash advances. Citigroup data includes Citi-Branded Cards and Citi Retail Services. 3 Capital One: US card business, small business, installment loans only. Purchase volume excludes cash advances. 4 Bank of America: Receivables, purchase volume and net loss rates are for US consumer cards. 5 Discover: includes US domestic receivables and purchase volumes only. Restated: ROA reflective of Direct Banking segment (credit card represents ~80% of loans) and implied US Cards tax rate of ~22%. ROA denominator estimated from total loans ended figures. 6 American Express: Changed reporting method as of 2Q18. All figures except ROA are for US Consumer segment; Amex has stopped reporting net income attributable to US consumer segment. ROA is estimated based on US receivables comprising 88% of Global Consumer segment and 22% US effective tax rate. 7 US Bank: Net Income attributable to Payments Services totaled $ 361M as of 2Q18, compared to $ 282M in 2Q17; Payments Services includes revenue from consumer credit cards, as well as commercial revenue and other sources. 8 A/R and PV for Retail Card unit only. 9 Loss rates and ROA include all of SYF’s business lines (i.e., Retail Card, Payment Solutions, and CareCredit). Retail Card accounts for about 70% of total receivables. 10 Average Receivables.

     

    Q2 2018: US credit card issuer snapshot fintech Paul Sammer, Manager, Payments

    Q2 2018: US credit card issuer snapshot fintechQ2 2018: US credit card issuer snapshot fintech

     

     

     

    The post Q2 2018: US credit card issuer snapshot appeared first on Accenture Banking Blog.

    Accenture Banking Blog

     
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