Digitizing the lending process is still incomplete for #banks of all sizes. A recent #survey from the lending platform Lendtech, provides further evidence that banks and lending platforms must digitize the loan application and servicing process to capture today’s borrowers. LendTech, a member of the current cohort of this site&8217;s sister accelerator INV #Fintech, conducted a […]
Bank Innovation
It might seem like #blockchain has been all the rage among #banks and #fintech companies, but a recent Bank Innovation poll found that many of these companies don’t have any blockchain projects in the current pipeline of their innovation initiatives. When asked to describe their company’s involvement with blockchain #technology, 30% of the poll-takers said […]
Bank Innovation
Many large #banks describe themselves as equal parts #technology firms as they are financial services companies, but then shouldn’t they have relevant patents backing that notion? Well, they don’t. In fact, a new report showed that technology company IBM has five times more #fintech patents than the world’s 15 largest banks combined. The report, released […]
Bank Innovation
#Fintech M&A #deals have sustained volume and value this quarter. During 2Q18, fintech deals totaled $ 12.7 billion, up from $ 7 billion in 2Q17. This boost in transaction volume is mainly due to the consolidation of sectors, according to KPMG’s biannual “Pulse of Fintech” report. Major deals such as PayPal’s $ 2.2 billion acquisition of iZettle, also […]
Bank Innovation
Countries with centralized #FinTech #regulation can provide more support to innovative firms than the U.S. with its fragemented governance.
Financial Technology
It’s good news for fintechs in lending and payments that want a federal banking license, the Office of Comptroller of the Currency (OCC) has started accepting applications starting today. The #fintech #charter does not require deposit insurance from the FDIC, per a recommendation from the Treasury Department. The Treasury Department, which today endorsed the idea […]
Bank Innovation
#Fintech funding is already breaking records this year. For the first half of the year, there has been $ 41.7 billion invested in fintech globally, eclipsing the 39.4 billion total raised last year according to Fintech Global. As the world of fintech funding continues to gain momentum, there are some deals that stand out. Bank Innovation […]
Bank Innovation
You might not expect the nation’s leading mobile bank, with north of 31 million users, to be in a hurry to build a digital bank under a new brand, but that&8217;s just what #JPMorgan #Chase did last October with #Finn. Clayton Christensen&8217;s famous “innovator&8217;s dilemma” notes that it is difficult for incumbents to launch new […]
Bank Innovation
Ant #Financial has done it #again. In 2Q18, the Chinese #fintech raised the largest amount for fintech invest ever. According to CB Insights’ 2Q fintech report, Ant Financial&8217;s #fundraising accounted for 69% of total #global fintech funding. This is not the first time Ant Financial has done something like this. Back in 2016, Ant Financial took […]
Bank Innovation
Fueled by innovation, the US #banking market is undergoing tectonic shifts. Many players are looking to #payments as a crucial #battlefield for #change. Incumbents—#banks and established fintechs, such as networks and card processors—have transformed the transactions environment over decades for the benefit of end users. New generations of #fintech players, both partners and competitors, have used digital business models to enhance the customer experience and open the door to new segments and revenue sources. Now, with the growing influence of Amazon, Apple, Google, Facebook and other similar big #technology (bigtech) firms, along with increasing customer sophistication and ongoing overseas disruption, the fundamental aspects of revenue drivers and share are in question.
Accenture examined potential trajectories of current trends, which could present revenue challenges for US banks in payments. Our analysis indicates that incremental revenues are projected to accrue primarily to non-banks over the next few years. The beneficiaries include players already in the value chain (those less exposed to customer demands, such as rewards, and with more direct access to key platform levers, like processing) and new forms of fintech, bigtech and other third parties phasing into the market.
US disruption is anticipated to differ from that faced in Asia, Europe or other markets where the external impetus—competitive or regulatory—is accelerated and often direct. At least initially, established players may be situated to benefit financially; as evidenced by ApplePay, it can take years for new, disruptive platforms to scale. For those who are unprepared, gradual pricing pressure and value leakage may begin to erode many existing business models.
Of course, a wide range of scenarios are possible for the future of US payments with several factors much #broader than payments (including artificial intelligence, #blockchain, cross-border transactions, major geopolitical movements, Open Banking, privacy, regulation and security) at play. Recognizing the range of potential outcomes, US payments players have the ability to position themselves for success.
Incumbents have already begun moving to protect their revenue base by introducing innovative solutions, such as Zelle. Going forward, technology deployment needs to happen faster with more agile adoption and monetization of technologies, such as data analytics, blockchain, and AI/machine learning, that can rewrite the payments equation. These new technologies offer a pathway to optimize the go-to-market model, breaking down silos to improve revenue and efficiencies internally and value chain orchestration externally.
Banks and other payments players can increase relevance by focusing on the customer journey and use cases to add value. Amazon Go, a new kind of technology-based retail store from Amazon, is just one example of looking in and beyond the existing value chain to rethink the customer experience. If incumbents view the customer as the North Star and are open to all that is possible, then they, too, can be disruptors, instead of the disrupted.
Change can be challenging. However, payments players are in the fortunate position to be able to write their own story. Now is the time to do so.
I invite you to read our report, Driving the Future of Payments
Special thanks to Tom Skomba, who contributed to this blog.
The post Payments: The first key battlefield signaling broader change in US banking appeared #first on Accenture Banking Blog.
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