The #developing #world has many innovative #mobile money apps but most operate on a closed loop, limiting their value. The #Gates #Foundation has launched a #platform to facilitate connections for mobile money users to #banks, other mobile platforms and retail. It is avaialbe free through BitHub.
Financial Technology
Dutch #bank ING has created its own #fintech venture #fund, ING #Ventures, which the bank will use solely to invest in fintech companies. The €300 million ($ 347.5 million) fund will be part of the bank’s innovation office, heralded by ING’s head of fintech, Benoit Legrand. The fund will expand ING’s focus on partnerships, according to […]
Bank Innovation
#Open #banking—where #banks expose their data, functions and services to an ecosystem of customers, employees, third-party developers and vendors—has been hotly anticipated in Europe. We know almost US$ 1 billion was invested in PSD2-enabled services in 2016, up 200 percent from the year before¹.
Of course, some of this investment came from banks. But much of it originated from the group of voracious digital competitors circling banks’ traditional territory. That’s no surprise. The drive towards open banking gives them a direct line into a potentially lucrative market. And, crucially, it’s a market where they’re well placed to deliver the flexible, personalized experiences consumers demand.
Now, with PSD2 implementation across Europe just a few months away, new research from Accenture points to a major #opportunity for UK banks: We’ve found that more than two-thirds (69 percent) of UK consumers say they won’t share their personal financial data with third-party providers.
Based on this survey of over 2,000 consumers, it’s clear that online retailers, tech firms and social-media players face an uphill battle to convince consumers to allow them access to their financial data. Especially since over half of them say they’ll never change their banking habits and adopt open banking.
So why not? It all comes down to a lack of trust. Trust in online platforms and social-media companies as providers of payments services is low. We found most consumers would be unwilling to initiate a payment through an online platform (58 percent) or a social-media company (82 percent).
Fear of fraud is the primary factor. An overwhelming majority (85 percent) of consumers point to the risk of fraud as the biggest barrier to sharing bank account information with third-party providers. Data protection risks and increased potential for cyberattacks also feature highly.
By contrast, more than half of British consumers said they would trust only their own bank with their account information when seeking services like a better mortgage rate or savings account. This should be music to the ears of UK bank executives. Having won the trust of their customers over a period of many years, now is the time to build on that heritage to secure crucial early advantage in open banking.
The overriding priority? Be open to being open. That starts with the culture. Banks have to encourage a cultural shift from the outset. Everyone from the c-suite downwards needs to be involved in the conversation about open banking. They need to see clearly how it can help the bank achieve its core objectives: gains in revenue growth, cost reduction and talent management. The bottom line? Open banking has the potential to be a key initiative within every bank’s digital transformation program. As such it should be high on the agenda. Take a closer look.
But there’s a caveat: While we found banks can and should move fast to up their digital game and capitalize on the advantage they have in open banking, there’s a new generation of consumers coming through—and they feel very differently. Younger consumers (aged 37 or under) are more willing to trust non-traditional service providers.
One-third of Gen Z’ers say they’ll be likely to use open banking instead of usual payment methods. That’s in stark contrast to the only six percent of baby boomers who feel the same way. The same generational split is obvious in another area: Forty-two percent of millennials and 52 percent of Gen Z’ers say they’ll give online retailers permission to initiate payments directly from their bank accounts using apps/websites.
While this shows clearly where retailers need to focus their efforts in creating new payment experiences, in-store and online, banks themselves need to take notice if they’re to attract and retain business from younger consumers. That means no let-up in investments in social media, wearables and secure but frictionless customer authentication.
Let us know what you think. Thanks for reading.
The post The open banking opportunity appeared first on Accenture Banking Blog.
U.K.-based bank #HSBC experienced a #glitch earlier this morning that locked some #customers in the region out of their accounts, with customers then taking to #Twitter and other social media to complain. Detected early this morning, the glitch left the bank’s customers unable to get into their online or mobile bank accounts, with attempts to […]
Bank Innovation
#Banks should find some appropriate, low-risk project and deploy #blockchain, perhaps in parallel with existing operations, say IBM and CLS. They can’d continue proofs of concept indefinitely if they want the benefits blockchain offers.
Financial Technology
The #Australian Securities and Investments Commission (ASIC) and #Swiss Financial Markets Authority (FINMA) have partnered to #promote cross-border #fintech #innovation. The two #regulators are working to support fintechs to meet regulatory requirements in each other’s countries. Switzerland is Australia’s tenth-largest source of foreign investment. The two regulators signed the agreement last week in Madrid. In […]
Bank Innovation
EXCLUSIVE— Is #Google looking to become a #fintech power? The company, which reported strong results for its third quarter yesterday, seems to be expanding its focus on finance, specifically on platforms that integrate or otherwise support payments and #mobile technologies in its many markets. For instance, while Google did not release numbers for its mobile […]
Bank Innovation
In #part one of my blog on atomizing #payments, I explained how payments volumes are likely to expand 25 times or more in the future, resulting in trillions of new payments. In part two, I explain a precedent for this #atomization and its implications, and how the payments industry needs to prepare.
Atomization of communication is a precedent. Nowadays, communication is dominated by e-mail, texts and social media posts in volumes that dwarf those of the past using paper. Individuals typically send and receive hundreds of texts and e-mails each week, compared to a few letters in the past. It has taken about 20 years to reach this state, and volumes are still growing.
If atomization of communications is replicated in the payments industry, trillions of payments can become a realistic prospect. The implications are far-reaching.
Kevin Hanley at RBS recently gave a great Finextra interview in which he talked about the divergence between technology changing exponentially and industries, organizations and individuals thinking linearly. Payments is an industry changing exponentially, however, much of it remains in a linear mode, underestimating the impact of this change. For example, earlier this year, at a conference I was rebuked for forecasting UK contactless card volumes would rise from three billion in 2016 to six to nine billion transactions this year. A member of the ATM industry, passionate about cash, described my forecast as irresponsible. However, UK Finance figures already show the country is clearly on track to exceed six billion contactless transactions in 2017.
My point at the time was that no one is predicting these volumes, or planning for them, yet they are happening. The payments industry is sleepwalking towards its future. The industry needs to think and act exponentially, and it needs a vision. A 25-times increase in volumes over 30 years is only an 11 percent per year compound growth rate—a rate that the world-leading UK Faster Payments system has exceeded consistently for many years.
We are already in an exponential payments world. The good news is that innovation and change in payments will be sustained for many years and the responsible action to take is to embrace it now.
My thanks to Nick Caplan, Chairman of Faster Payments Scheme Ltd for the inspiration behind this blog.
The post The atomization of payments: Part two appeared first on Accenture Banking Blog.
#Lloyds bank #prepares for the #future with SAP #core #banking to add sophisticated features like real-time positions and virtualized accounts.
Financial Technology
EXCLUSIVE- With two products and a recently announced partnership with tax preparation software provider #Intuit, #Marcus by #Goldman Sachs is keen on growing its brand through more new #partnerships and products in 2018. “The future of finance is not #technology,” Harit Talwar, head of Marcus by Goldman Sachs, said at Money 20/20 in Las Vegas. “The […]
Bank Innovation
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