EXCLUSIVE – Young Americans are bad when it comes to setting aside money for #retirement. Those #savings numbers decline even further when considering the #Hispanic #population, according to a new study by IRA savings #platform, #Finhabits. The solution? Well, that’s exactly what New York-based #fintech startup is hoping to provide. Launched in February by former […]
Bank Innovation
Over the last several years, fleet payments have seen significant evolution with quickly expanding use of electronic payments, mobility management and other value-enhancing paradigms. And the journey has just begun. Driving fleet payments’ future forward are three key trends with significant industry implications: specialist transformation, fleet card globalization, and technology disruption.
Fleet payments have been an attractive market for specialists, particularly in the US where they have increasingly built scale and synergies with partnerships and acquisitions. The two largest providers have rapidly grown their businesses, and Accenture anticipates just three specialists – FleetCor, US Bank, and WEX – will generate US$ 3 billion or more in US purchase volume in 2017. While down from seven in 2012, these remaining providers’ portfolios have grown more sophisticated with enhanced functionality in serving fleet fuel, and increasingly non-fuel, spend needs.
With high large fleet (greater than 100 vehicles) penetration, small-to-medium-sized fleets are attracting greater industry focus. Accenture estimates these fleets (fewer than 100 vehicles) make up roughly 90 percent of the incremental North American vehicle opportunity. While continuing to build revenue per vehicle with existing fleets, fleet card specialists could position themselves for near-term penetration of this segment and long-term value through the expanded base.
But the small-to-medium segment is different. Like other small-to-medium businesses, these fleets prefer competitive pricing and fees, fast implementations, DIY configurations, and interoperability with other vehicular technology investments which can provide that “Uber-like” experience to which small-to-medium fleets are so close. This new experience requisites a reexamination of provider business models across many different drivers to fit customer and internal needs while aligning with relevant shifts observed from global interactions.
The recent price environment has left integrated oil companies in the US and globally looking for ways to streamline operations and release tied-up capital, particularly as they move towards major legacy technology decision points. Moreover, US and Canadian fleet card partnerships, in many cases, have proven beneficial to major oils and to their fleet customers, unlocking value for all involved. This could catalyze new waves of fleet card globalization.
Building on US and Canadian successes, FleetCor and WEX (the two largest global fleet card specialists) have penetrated similar markets (such as Australia and the United Kingdom), expanded value chain presences, and won major programmatic deals in Europe with Shell (FleetCor) and ExxonMobil (WEX).
Considering global commercial vehicle fleets, fuel demand and revenue yields that frame the fleet payments universe, Accenture analysis suggests potential for at least US$ 7 billion in revenue outside the US and Canada, with global fleet card specialists having reached just a fraction (roughly one-tenth) of that opportunity.
The key architectures to maximize cross-border efficiency are moving closer to readiness, and if executed effectively, several new avenues of growth may result. As examples, FleetCor is progressing its second-generation Open Loop solution; WEX and others are enhancing fleet management technologies; and providers of all sizes are experimenting with more open approaches inspired by liquid consumer expectations. But globalization will require much more.
Overseas markets are each distinct, with complex economic dynamics and entrenched local and regional market participants. Current participants weave a complicated web for new entrants; and while new entrants, including global fleet specialists, have started to gain share, they have a long way to go to create conditions closer to those in the US market.
To drive timely global fleet payment transformation, providers of all sizes will need to focus, message and execute effectively to receive the trust of potential customers and partners in the value chain while protecting against being disrupted themselves.
To keep pace with market expectations and remain competitive, providers are embracing disruptive technology. Digital and mobile are among many technologies helping companies better manage their fuel and vehicle-related expenses and have become increasingly popular in the past few years.
Mobile applications allowing fleet card drivers to find fuel locations have been around for several years; however, mobile functionality for fleet managers is relatively new. EFS (an affiliate of WEX) recently announced its CarrierControl Mobile app which allows fleet managers to load cash onto driver cards, view real-time card transaction details and activate/deactivate driver cards in real time. Others are investing in similar on-the-go fleet card management features, expecting that the vast capabilities available online (for example, setting daily transaction limits) will increasingly become available on a mobile phone.
Technological advancements beyond cards, such as telematics integration, are in progress and provide opportunity and threat to current providers. As technologies to integrate data from third-party systems (such as open APIs) progress into market, fleet card providers will have even more tools to offer end-user organizations.
In the US, innovative international players such as Radius are entering the market and start-ups are offering alternative forms of payments. New mileage reimbursement technologies, meanwhile, are being marketed as alternatives to traditional fuel cards. And new partners, such as hypermarkets and c-stores, while willing to partner with existing providers, expect a certain experience for their customers in line with the retail trends they experience globally today.
Providers across the value chain—payments specialists, fuel providers, and fleets—have the opportunity to embrace these trends in the context of their own prisms. To build future-oriented, agile business models that positively re-define value creation, each player must consider strategic and tactical actions:
With ever-growing market sophistication, those who embrace the thematic trends impacting fleet payments can proactively chart their journey with knowledge of how to read signposts along the way. I invite you to reach out to me to find out more.
The post Revving the fleet payments engine appeared first on Accenture Banking Blog.
EXCLUSIVE – #American Express is the latest card provider to get rid of #signatures as a form of authentication for point-of-sale transactions. This will go into effect in April of next year and applies to all American Express-accepting merchants across the world, the company announced. The move comes as no surprise with more and more card […]
Bank Innovation
EXCLUSIVE- Point-of-sale #lender #Affirm raised $ 200 #million in a new funding round, bringing its total equity funding to $ 450 million. The Series E round was led by Singapore’s sovereign wealth fund GIC. Other investors included Khosla Ventures, Lightspeed Venture Partners, Founders Fund, Spark Capital, Caffeinated Capital, Ribbit Capital and others. This new round in funding increases the […]
Bank Innovation
Holiday shopping is an attractive season for online #fraud, but sophisticated software can allow merchants to accept most transactions.
Financial Technology
#Stephane #Wyper, who runs Mastercard’s #partnerships related to the #Internet of #Things, as well as new commerce, has joined the Bank Innovation #2018 speaker faculty. He will present on the challenge of creating a global #fintech operation, whether you&8217;re a startup or an established corporation. Mastercard is experienced at these sorts of deals — witness […]
Bank Innovation
One of the key things I have learnt since recently moving to Dublin is that a little information goes a long way.
For instance, I have already learnt that Guinness tastes infinitely better here than it does anywhere else in the world. Another vital piece of information I learnt the hard way, is that you should never, NEVER, go anywhere without an umbrella. Even if it is a sparkling clear day when you step out in the morning, by the time you reach the end of the road you could easily be under attack #from a sideways-driven sheet of rain…it is not the emerald isle for nothing!
Information is the cornerstone of most of our decisions, and #banks should be no different in making use of the vast quantities of #data that they have in order to determine their next steps or provide new hereto underestimated potential revenue streams.
A slew of regulations about to be implemented, including Open Banking and GDPR, could be seen as an inconvenient obligation—or worse—a threat to the incumbency of the traditional bank. Allowing as they do, greater access to third parties, to the valuable relationship between bank and customer, and greater control to customers over their own data. Banks might take comfort from the fact that customers are currently nervous of sharing their data with anyone other than their bank—85 percent cited the potential for fraud as a key reason they would be reluctant to allow third parties to access their data—in one of our recent surveys. Yet this will only last until a critical mass of a customer’s peers start to recommend an alternative service (think Uberization), and suddenly the returns outweigh the risks.
But fortunately, banks are coming around to the idea that these regulations regarding data management and access are a beneficial catalyst to embracing the next generation of banking services. And that using the huge amount of data they possess to break down revenue siloes centred around a particular product or service, and gain greater insight into their customers, will place banks squarely in the zone to be the innovators of the future.
Banks are still in a position of trust: Most customers would prefer their data be used by the bank, rather than a third party, to provide better services. Although it would be prudent for banks to start adapting the type of service they have now, rather than waiting until they have fixed all their legacy issues, as some appear to favour.
Adopting a data-driven platform model in which a bank is the custodian of this valuable data commodity, and can channel consumers towards products and services offered by others, could create a new revenue channel for banks. They would be able to still offer their own products, but for those they cannot help—perhaps due to risk appetite or a product/service they do not offer themselves—they could conceivably charge other providers a fee for product recommendations to customers.
Providing a secure way for products to be offered and availed of by customers is also within the influence of banks. They have huge amounts of security experience, which incoming financial services providers may lack, and which a bank may also be able to monetise, based on what they know about customers’ needs and spending habits through their data.
Timing is everything though, and waiting to fix all your legacy issues before moving forward could be very costly. Digitally decoupling and adopting a two-speed development strategy to leapfrog over some of these issues, should be more than just a “would like to have” strategy—creating an environment where data can drive forward new products and services, and create multiple new revenue channels concurrently. Developing, deploying, and scaling at speed is within reach of banks, so long as they adopt and adapt to the new narrative of the industry.
As one of Ireland’s favourite sons once said, “Consistency is the last refuge of the unimaginative”, and while the quality of service offered must always be of a high standard, the way in which it is offered or charged for, based on new and innovative ways of interpreting data, is ripe for reimagining.
The post Artificial intelligence: Unlocking value from data appeared first on Accenture Banking Blog.
EXCLUSIVE- #SunTrust #Banks Inc has joined the #network of #institutions using the #Zelle realtime payments network. The service is now accessible via SunTrust’s suite of mobile apps. The Zelle network is owned by Early Warning, a provider of payments and security solutions. In October 2017, EW announced Q3 payments of $ 17.5 billion, involving more than […]
Bank Innovation
PwC expects a lot of movement to #blockchain in #finance during 2018, but industrial companies are ahead of finance in using blockchain for supply chain and other operations.
Financial Technology
#Dubai Financial Services Authority (DFSA) has signed two new agreements with #Hong #Kong’s regulators to collaborate on #fintech #innovation. According to reports, DFSA signed bilateral agreements with Hong Kong’s Insurance Authority (IA) and the Hong Kong Monetary Authority (HKMA), to share information sharing and referrals of fintech innovation. Ian Johnston, chief executive of the DFSA, […]
Bank Innovation
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