The Innovator’s Dilemma hangs over financial firms #digital transformation strategies — they making money, so why change? #Forrester says they have to if they want to remain profitable.
Financial Technology
EXCLUSIVE – #Bank of #America had five million transactions via the digital payments service #Zelle in October alone, an amount 35% higher than the average 3.7 million transactions per month the bank reported in September 2017. Yesterday evening, the bank announced that it processed a total of $ 1.5 billion dollars through Zelle in the month of […]
Bank Innovation
EXCLUSIVE—#Banks need to start integrating with more #fintech services and building out more products through APIs, #FI.SPAN CEO Lisa Shields told Bank Innovation, #before regulations on open banking start to cramp what FIs can build. “What we are betting our business on, is that there is a massive opportunity for banks to innovate,” Shields said. […]
Bank Innovation
In “Paradise Lost”, 17th-century English poet John Milton describes two types of warriors: One group are “employed in sporting games and exercises” and “sing in the valleys”, while the other group “rend up both rocks and hills”, “make wild uproar” and “ride the air in whirlwind”.
Milton’s bifurcation also applies to the modern-day #payments industry. With fast-paced disruptive change sweeping the industry, are traditional payment players going through the motions trying to protect their traditional sources of profit or are they willing to be combative and create “wild uproar” by driving radical change?
Consider Accenture’s prediction that in the UK alone there will be between six billion and nine billion contactless card transactions in 2017. Alternative payment mechanisms such as PayPal and iDEAL will continue to grow at 20 to 30 percent a year for e-commerce transactions, driven by convenience and sky-rocketing fraud rates in card-not-present transactions. We estimate that up to 25 percent of banks’ traditional cross-border payments revenue streams are at risk from these innovations. These are just a few of the seemingly endless examples of disruptive change in the payments industry. Traditional payments players are at a crossroad: figure out how to ride this whirlwind to success, or be content to just keep playing the traditional games.
To help #banks make sense of this fast-changing landscape, Accenture has identified ten payments #mega #trends from our 2017 North America Consumer Payments Pulse Survey.
One key trend is banks’ new-found enthusiasm for collaborating with digital consumer-to-business and #fintech partners to both exploit the power of an exponentially growing network and deliver benefits to customers. Tapping into these networks allows payments players to multiply capabilities and extend their reach without building and investing from scratch. One example is Zelle®. This API-enabled network of more than 50 partners, including Ally, Wells Fargo, Bank of America and JPMorgan Chase, offers real-time, person-to-person payments and disbursements through one recognisable brand. According to Zelle, some 85 million consumers can now experience its services through the mobile banking apps of the Zelle Network® participant banks. The app quickly ramped up to $ 33.6 billion in network volumes and 100 million transactions in the first half of 2017. This scale gives participating banks the edge they need to compete effectively with challengers like Venmo from PayPal. Creating and capitalising on network effects require banks to participate in digital ecosystems beyond their own walls and be willing to subsume to some degree their own operating models, cultures and strategies. Just as the payments industry of 50 years ago was energised by the emergence of the credit card networks, we are now seeing a new set of digital networks emerge that also have the power to reshape payments.
Another critical trend driving the #future of payments is the democratisation of payments acceptance. Today, everyone can be a merchant and every device can accept payments, whether you are talking traditional point-of-sale, online or mobile. Enabled by new entrants like Stripe and Square, all it takes is connectivity, a portable card reader or a website to create the next-generation POS. This “payments everywhere” wave that enabled small merchants and peer-to-peer commerce has also created new growth opportunities for payments players; they can address such increasingly attractive markets as large merchant payment margins get more compressed. This democratisation of payments acceptance has also created new opportunities for analytics-based lending and data monetisation strategies, which also offer new and appealing revenue streams for payments players.
These are just two of the ten payments mega trends identified in our recent report, Driving the Future of Payments: 10 Mega Trends, and I encourage you to explore the other eight. Regardless of what type of payments warrior you are, we hope this report can help you ride the whirlwind to the future, as simply singing in the valley is unlikely to be a successful long-term strategy.
The post Ten mega trends that will drive the future of payments appeared first on Accenture Banking Blog.
#Morgan Stanley issued its inaugural #fintech #award to Brighterion, a Mastercard company that fights fraud with AI.
Financial Technology
EXCLUSIVE- Royal Bank of Scotland becomes the #first bank in the U.K. to go live with an #investment #robo-advisor under its #NatWest Bank brand, RBS said in a release today. Starting today, the digital service is available to NatWest Bank’s five million customers #through NatWest #Invests‘ platform online. Since the tool is geared towards “customers […]
Bank Innovation
UK challenger bank #Virgin #Money has plans to step into small business banking with an SME #account to be launched in #2018, according to the bank. The account will be launched in January of the new year, bank CEO Jayne-Anne Gadhia said yesterday, adding that the account will “enable us to start developing relationships with […]
Bank Innovation
Small business lender #Kabbage received $ 200 #million in revolving #credit #from Swiss financial institution, Credit #Suisse. The funds will used by the Atlanta-based Kabbage to scale and expand its lines of credit with longer terms to its existing customer base, as well as some of the larger small businesses. Kabbage now has a total debt […]
Bank Innovation
Payments company, #PayPal will sell its U.S. #consumer loan portfolio to #Synchrony #Financial. Yesterday, the San Jose, Calif-based PayPal said it agreed to sell $ 5.8 billion in consumer credit receivables to Stamford, Conn-based Synchrony Bank, a unit of Synchrony Financial. Synchrony Bank has been PayPal’s banking #partner since 2004. In addition to selling its credit […]
Bank Innovation
Personal finance management #startup #Nerdwallet laid off 53 people yesterday, after failure to meet its profitability goals. The 53 people represent about 11% of Nerdwallet’s #workforce, according to a report by TechCrunch, and is the first step of a restructuring effort by the company. That effort will fold Nerdwallet’s sales and partnership teams into its […]
Bank Innovation
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