N26 prides itself on its smooth interface and user friendly features like saving by category and tracking expenditures by category. Will that be enough in the U.S. #market where other #mobile providers already offer similar features?
Financial Technology
N26 plans to build on its success in Europe to come to the U.S. — it will be one of the better funded challenger #banks to enter the American market.
Financial Technology
Data privacy regs in Europe provide standards for #banks and #FinTech to share data, with a customer’s consent, so they can offer tailored solutions.
Financial Technology
The EU’s Second Payment Services Directive (#PSD2)—and the #European Banking Authority’s related Regulatory Technical Standards (RTS) on Strong Customer Authentication (SCA) and Secure Open Standards of Communication—represent a turning point for existing business models in #payments in Europe. PSD2 and RTS open up #banks’ systems to third-party payments services providers (TPPs) for account information, payment initiation and confirmation of funds via an access interface such as application programming interfaces (#APIs).
The final RTS published on 13 March 2018 specifies only the technical framework conditions and not interface standards. To help fill this gap, the Berlin Group—consisting of almost 40 banks, associations and PSPs from across the EU—has defined a common API framework called “NextGenPSD2” (current version 1.1) for the use cases specified in PSD2.
Payment initiation opens up: For payment initiation, the NextGenPSD2 framework offers, amongst others, SEPA #Instant Payments (SCTInst) as a payment instrument. The combination of PSD2 and SCTInst has huge potential to disrupt existing business models, depending on the level of API standardization and penetration of SCTinst in the EU.
Impacts on the cards business: TPPs such as merchants, #technology giants and PSPs could use the PSD2 APIs to make instant payments directly from customer accounts to the TPP bank account, bypassing card schemes and fees.
Frictionless instant payments with PSD2: Customer experience is key in payments. Friction and slowness can reduce acceptance of the payment instrument on both the customer and merchant sides, leading to higher cancellation rates in eCommerce checkout processes and longer queues in the store.
But there are issues with SCA—PSD2 APIs require banks to perform SCA on every transaction. This could lead to friction in the user experience at the point of sale (POS) and in eCommerce. PSD2 provides a convenient way to solve the issue of SCA through inherence and biometrics-based SCA methods. As innovation in this area continues, there will be a huge push towards creating RTS-compliant biometrics authentication methods.
TPPs such as tech giants and fintechs are not the only ones that could profit from PSD2 and instant payments—banks could also play an important role. Access to accounts and instant payments become commodity services with low or almost no margin for banks. New revenue opportunities will be in the value-added services and the platform ecosystems around these commodity services. “Going beyond PSD2” will include opportunities to monetize additional data and services combined with instant payments.
Read my complete article at InstaPay for more insights and share your views.
The post Will PSD2 APIs and instant payments change the game in European payments? appeared first on Accenture Banking Blog.
#Banks seen as lagging in their digital transformation program saw a decrease of 11% in #future #value
When it comes to #creating future value for shareholders, banks are lagging badly behind GAFA (Google, Amazon, Facebook and Apple) companies, and they also trail financial #technology (#fintech) companies. Our analysis of Capital IQ data in 2017 indicated that future value represents 49% of the total value of GAFA companies and 40% of the total value of fintech companies, with “future value” defined as the premium investors are willing to pay beyond the value of current operations.
Future growth value of banks launching an aggressive digital transformation program was 20%, but banks seen as lagging in their digital transformation program saw a decrease of 11% in future value. Clearly, innovation is a key driver for creating future value in banking, but banks cannot simply snap their fingers and magically transform themselves into innovators.
Our experience shows that there are five key steps to creating future value through innovation:
Getting on board the digital transformation train is not easy, as the pace of change is accelerating. To capture trapped value, banks need a disciplined, systematic approach to change, acknowledging that change is a constant evolution rather than a single event. Speed is becoming the critical factor for both decision-making and transformation.
Banks need to transform their core businesses, determining what is required just to stay viable, and then what is needed to increase profits. But they should no longer be thinking in terms of moving from phase to phase. Rather, they should create an innovation architecture and work on getting the timing, scale and direction right, so that they can manage the investment process and the allocation of capital in both core and new businesses. The ultimate objective should be a circular path of growth and renewal.
It is worth keeping in mind that banks cannot succeed at digital transformation without a) identifying, training and retaining the right people and b) helping their people understand and adapt to the #challenges of the digital era. The order of magnitude of the hiring, training and adapting involved is far beyond anything banks have experienced so far. Banks, as well, have a social responsibility to deal fairly with their employees. I will discuss these and other “people” factors in my next blog.
The post European banks face challenges in creating future value appeared first on Accenture Banking Blog.
This post marks the beginning of my career as an Accenture blogger. I’m looking forward to communicating with you in 2018 and beyond and to commenting on developments in the #banking industry in Europe. I joined Accenture late last year as head of the banking practice in Europe. I am an industry veteran with extensive experience both as a consultant and as a banker.
This is an enormously exciting time to be working in the banking industry, particularly in Europe. There is #massive change taking place on many fronts:
As Accenture has noted, most banks in Europe have been vertically integrated, covering all aspects of the value chain from origination to servicing. The universal bank concept is well-established, with the retail sector more stable in recent years than the commercial and investment banking side. Within Europe, there has been more regulation, but regulatory barriers to entry have enabled intra-industry competition. While regulation has deterred cross-industry threats from retailers, telecoms and consumer tech giants, it has also fostered a wide variety of institutions, including private, mutual and cooperative banks.
This is all about to change. The combination of competitive disruption and regulatory actions like PSD2 in Europe and the Open Banking initiative in the UK is forcing banks to open up faster than other industries while maintaining the security that is part of their DNA. Before too long, bank customers will be able to share access to their financial data with non-bank third parties, and third parties will be able to integrate their services with those of a bank to create a better banking experience while keeping client data secure.
#European banks are facing many other challenges, including continuing low levels of profitability and the need to formulate and execute digital strategies. Digital strategies, in turn, call for a new look at how people are selected, trained and motivated as banks shift from product-driven to customer- and people-driven organizations.
I will be writing about these and other topics in the months to come, particularly as they pertain to Accenture’s own vision and its view of banking strategy, #technology and operations. I welcome your comments and questions, and look forward to a lively exchange of ideas.
The post Confronting massive changes in European banking appeared first on Accenture Banking Blog.
This post marks the beginning of my career as an Accenture blogger. I’m looking forward to communicating with you in 2018 and beyond and to commenting on developments in the #banking industry in Europe. I joined Accenture late last year as head of the banking practice in Europe. I am an industry veteran with extensive experience both as a consultant and as a banker.
This is an enormously exciting time to be working in the banking industry, particularly in Europe. There is #massive change taking place on many fronts:
As Accenture has noted, most banks in Europe have been vertically integrated, covering all aspects of the value chain from origination to servicing. The universal bank concept is well-established, with the retail sector more stable in recent years than the commercial and investment banking side. Within Europe, there has been more regulation, but regulatory barriers to entry have enabled intra-industry competition. While regulation has deterred cross-industry threats from retailers, telecoms and consumer tech giants, it has also fostered a wide variety of institutions, including private, mutual and cooperative banks.
This is all about to change. The combination of competitive disruption and regulatory actions like PSD2 in Europe and the Open Banking initiative in the UK is forcing banks to open up faster than other industries while maintaining the security that is part of their DNA. Before too long, bank customers will be able to share access to their financial data with non-bank third parties, and third parties will be able to integrate their services with those of a bank to create a better banking experience while keeping client data secure.
#European banks are facing many other challenges, including continuing low levels of profitability and the need to formulate and execute digital strategies. Digital strategies, in turn, call for a new look at how people are selected, trained and motivated as banks shift from product-driven to customer- and people-driven organizations.
I will be writing about these and other topics in the months to come, particularly as they pertain to Accenture’s own vision and its view of banking strategy, #technology and operations. I welcome your comments and questions, and look forward to a lively exchange of ideas.
The post Confronting massive changes in European banking appeared first on Accenture Banking Blog.
EXCLUSIVE – A new set of financial regulations in the form of #MiFID II has arrived in Europe today, and not everyone is #prepared. MiFID II (or Markets in Financial Instruments Directive 2) is a massive set of regulations (7,000 pages) geared towards asset managers and brokers as well as traders of stocks, ETFs and […]
Bank Innovation
A #consortium of seven #European #banks will use #blockchain #technology to provide trade finance for #SMEs.
Financial Technology
A #consortium of seven #European #banks will use #blockchain #technology to provide trade finance for #SMEs.
Financial Technology
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