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  • @fintechna 12:18 am on June 12, 2018 Permalink | Reply
    Tags: 2013, , , , , Predictions, , , , ,   

    Your 2013 State of Banking Predictions for This Year Were Right on the Money 

    PREMIUM —In , Bank Innovation asked readers to predict the of innovations in for 2018. Data collected in the September 2013 Bank Innovation survey showed that our readers had excellent foresight into the current innovations and challenges of the industry. For instance, one respondent posted that “customers will interact with their [&;]
    Bank Innovation

  • @fintechna 3:36 pm on March 1, 2018 Permalink | Reply
    Tags: , , , , , , , Predictions, remainder,   

    Payments predictions for the remainder of 2018 

    As I step into my new role as Accenture’s global lead, it got me thinking about the constantly evolving industry landscape—and the themes that will play important roles in that evolution the of the year. I’ve divided my selections into three categories: Established Trends, Building Trends and New Trends, though some are applicable to more than one category. Take a look.

    Established Trends

    1. Contactless payments will continue to grow at 100%+ in Europe—expect more than 40bn transactions, all told.
    2. Cash will experience an accelerated decline across Europe. Expect fewer than 1.8bn ATM withdrawals in the UK (which peaked at 2.9 bn in 2012).
    3. Real-time payments will grow quickly where they have been established for many years. Faster Payments volumes in the UK will exceed 2bn transactions.
    4. Mobile wallet payments such as Apple Pay and Samsung will experience strong growth.

    Building Trends

    1. Propositions using PSD2-compliant APIs will appear gradually. Expect bank and applications such as account aggregation to appear in the first half, followed by retailer applications in the second half.
    2. Infrastructure renewal programmes will appear around the world, for real-time domestic payments and RTGS wholesale payments.
    3. Real-time payments adoption in Europe will be slow. While a large number of will implement the required and connect to new real-time central infrastructures, volumes will remain low until at least 2019.
    4. Some banks will start building cloud payment solutions as an alternative to on-premise technology.
    5. Request-to-pay as an invoicing and payment method will emerge as a proposition in several countries.
    6. Mobile wallets from China, already accepted by many retailers in Europe for Chinese nationals, will take advantage of PSD2 account access to launch services targeted at Europeans.
    7. Wearables for payments will start proliferating with new devices and fashion accessories.
    8. Although most banks will still shun , expect to see cash management products appear aimed at corporate treasurers using Bitcoin and Ethereum.
    9. Ethereum will grow rapidly in popularity; its market cap will exceed Bitcoin by year’s end.
    10. Ripple’s network for cross-border transactions will grow significantly, attracting more banks and corporates, which will lead to rising transaction volume.

    New Trends

    1. The consumer experience for payments will become a battleground for banks, especially around authentication for PSD2 on third-party applications.
    2. Challenger bank adoption will be much higher than in the past due to their superior customer experience for payments.
    3. Biometrics such as facial, voice and hand-movement recognition, now robust enough for mass use, will be adopted by banks and fintechs as a weapon in the consumer experience battle, and also for securing wallets.
    4. Retailer wallets for both ecommerce and in-store payments will start appearing in sectors such as supermarkets, fuel and quick-service restaurants, emulating the success of Starbucks and Walmart, and focused on a slick checkout process using biometrics.
    5. Retailers will start demanding new payment methods for recurring payments for subscription- and credit-based services.
    6. Fintechs and banks will see the importance of linking credit and payments. Expect to see this as an emerging theme in payments innovation.
    7. Voice-activated payments will start appearing as Google Home, Alexa, Cortina, Siri, etc. grow in popularity.
    8. Central banks around the world will warm to the idea of issuing their fiat currency on distributed ledger technology—and at least one will have concrete plans to implement the technology.
    9. As banks adopt real-time payments in economies such as Australia, Europe and the US, new capabilities will emerge to operate in real time, for example, corporate cash management solutions for real-time cross-border payments, virtual accounts and fraud innovation.

    I welcome your thoughts on these —and encourage you to share your own. Thanks for reading!

    The post Payments predictions for the remainder of 2018 appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • @fintechna 3:35 pm on September 11, 2017 Permalink | Reply
    Tags: , , , midyear, , Predictions, ,   

    2017 payments predictions: A mid-year update 

    Earlier this year I made a set of for , which is living up to expectations as a year with new developments and change occurring on all fronts. In this blog, I give an on how the payments landscape is shaping up and rotating towards a new world of digital payments.

    Contactless and Mobile Payments

    Prediction: Contactless card transactions in the UK will rise to between 6BN – 9BN transactions in 2017, (compared to my forecasts a year ago of 3BN transactions for the UK for 2016).

    • UK Finance figures show 2.5BN transactions in the first six months of 2017 compared to 1.1BN transactions in the first six months of 2016, a 130 percent increase pointing to at least 6BN transactions for the whole of 2017.
    • Contactless payments are an important indicator of rapidly changing consumer behavior, and the experience in the UK is a mirror of a global trend.

    Contactless transactions are growing at a huge rate, far faster than most realize, showing a profound change in the way we pay across the globe. They are also spilling over into mobile contactless payments (e.g. Apple Pay) which grew 336 percent in the UK in the first half of 2017 compared to the same period in 2016 according to Worldpay.


    Prediction: Voice payments solutions will start making a hit with the public—perhaps through Siri on iPhones, Alexa on Amazon and at POS.

    • According to Business Insider research (June 2017), 8 percent of US respondents to their 2017 BI Intelligence survey said they used voice commands to buy something, send money to a friend, or pay a bill.
    • Amazon, Apple, Google, and PayPal all have voice capabilities—with, for example, Barclaycard launching a voice payment service with Siri in August 2017.

    Voice payments and voice commerce are an emerging trend that is here to stay.

    Prediction: Alternative payment mechanisms (APMs) such as PayPal, iDEAL in the Netherlands and Klarna (Europe and US) will continue to grow strongly (20 percent – 30 percent) for e-commerce, driven both by convenience and by high fraud rates in card-not-present transactions.

    • PayPal grew payment volume by 23 percent in Q2 2017 over the same quarter last year, while Klarna reported a 37 percent transaction growth in Q1 2017.

    APMs are already more popular than cards in some countries for e-commerce, and this continuing trend shows cards dominance is under threat globally.

    Real-time Payments Interbank Infrastructure

    Prediction: The UK will continue to lead the world in instant payments. Plans will be developed for a new real-time payments infrastructure that leaps ahead of current implementations in terms of ambition and capability.

    • The Payment Strategy Forum published its consultation in July 2017, which outlines its blueprint for a New Payments Architecture in the UK and its ambition to deliver it in 2020/2021.

    Prediction: Faster Payments will process 1.65BN transactions, 15 percent higher than 2016 (1.4BN transactions).

    • Faster Payments processed 790M payments in H1 2017, 15 percent higher than H1 2016. The continuing growth of real-time payments in the UK demonstrates the sustained, and irreversible demand for real-time payments and the beginning of payments atomization—the growth of UK real-time payments in large part is due to more payments being made, rather than just simple substitution of other payment types.

    Instant or real-time payment infrastructures are appearing all around the world. Adoption is gradually gaining pace and we can expect years of ongoing renewal, such as in the UK, as they embed and evolve with the demands of the digital economy.

    Distributed Ledger Technology

    Prediction: transactions for 2017 will be 150M transactions (up from 83M in 2016), miners’ revenue $ 850M ($ 562M in 2016), the average hash rate will be 5.7gh/s (1.5gh/s average in 2016), $ 120BN will be transacted in Bitcoin ($ 56BN in 2016) and the average number of unique addresses used daily will average 600K (406K addresses daily in 2016).

    • In H1 2017, there were 52M Bitcoin transactions, a 36 percent increase implying just over 110M transactions for the full year; miners’ revenue was $ 567M, a 77 percent increase implying $ 1BN for year; the average hash rate was 3.8gh/s, a three-fold increase implying 4.6gh/s average for the full year; $ 77BN was transacted in Bitcoin, a three-fold-increase implying $ 175BN for the full year; and the average number of unique addresses used daily averaged 535K, a 37 percent increase implying 560K average addresses for the full year.

    This is a blizzard of statistics, but they show that the Bitcoin network continues to grow in terms of transactions and users (addresses), that significant sums are transacted over it, and that while miners are multiplying—in fact, tripling—the computing power (# rate) in the Bitcoin network, they are receiving significant rewards for doing so.

    The number of Bitcoin transactions is still very low for a payments network, and are constrained by the current network capacity limit (which is supposedly being resolved), indicating that the Bitcoin network is more a store of digital asset value than a payments network. However, while miners’ revenue is dependent for now mainly on block rewards, over time this will diminish increasing their need to compete for transaction fees, and if Bitcoin is to endure, the number of transactions will need to grow significantly.

    I suspect that this is part of Satoshi Nakatomo’s game plan for Bitcoin, and if it materializes, Bitcoin will become a mainstream force over the next 10 years as a store of value and as a payments network.

    Prediction: Ripple will be the one DLT player in payments that grows, with its moving on from use by for pilots, bilateral exchange and internal payment flows, to use as a new cross-border payments network with growing transaction volumes between networked banks.

    • Ripple launched the Ripplenet payments network this year to standardize participation and access to the Ripple network, has 90+ customers, 75+ commercial deployments in progress, and has a network running with 47 banks in Japan.

    Ripple goes from strength-to-strength. While there are some examples of banks experimenting with other DLT, such as R3 in Singapore, no other DLT player comes close to the penetration of Ripple in payments, particularly cross-border payments.

    The post 2017 payments predictions: A mid-year update appeared first on Accenture Banking Blog.

    Accenture Banking Blog

  • @fintechna 1:51 pm on April 3, 2017 Permalink | Reply
    Tags: , , , , , Predictions,   

    Payment predictions for 2017 

    The payments landscape is changing fast due to new disruptive technologies such as open APIs, distributed ledger , cloud, Apple/Samsung/&;Pay, and customers’ expectations are changing for seamless and faster payments. Despite this, I can see clear trends through our work with clients and observation of industry developments, and based on these, I have developed a set of for .

    Contactless and Mobile Payments

    • Contactless card transactions in the UK will rise to between 6bn &; 9bn txns in 2017, and 20bn &8211; 30bn txns across Europe (compared to my forecasts a year ago of 3bn txns for UK and 9bn txns for Europe for 2016).
    • Cash usage will see a clear reduction across Europe—as an example, ATM cash withdrawals in the UK, which peaked at 2.9bn withdrawals in 2012, will fall from 2.7bn withdrawals in 2016 to somewhere between 2 – 2.5bn withdrawals in 2017.
    • Use of Apple Pay, Samsung Pay etc. will become more widespread in 2017, for both POS and in-app payments—expect to see published figures for strong growth rates in specific markets, even if absolute transaction volume figures remain undisclosed.


    • Omni-channel retailing will drive development of cross-channel and cross-border gateway solutions.
    • As augmented reality becomes a big theme in retailing, expect to see new payment solutions to support augmented reality commerce.
    • Wearable payment mechanisms will remain a niche—but imaginative new wearables will emerge.
    • Payment solutions from China will gain traction in other markets, following Alipay’s entry to Europe in 2016, and will start focusing on acquiring local customers, as well as supporting Chinese consumers abroad.
    • The use of payments in the Internet-of-Things (IoT) will grow, in particular with connected cars and utility meters.
    • Voice payments solutions will start making a hit with the public—perhaps through Siri on iPhones, Alexa on Amazon and at POS.
    • Alternative payment mechanisms such as PayPal, iDEAL in the Netherlands and Klarna (Europe and US) will continue to grow strongly (20% – 30%) for e-commerce, driven both by convenience and by high fraud rates in card-not-present transactions.

    The post Payment predictions for 2017 appeared first on Accenture Banking Blog. Continue on Accenture Banking Blog

  • @fintechna 4:54 am on December 12, 2016 Permalink | Reply
    Tags: , , , , , macro, Predictions, , ,   

    2017 Fintech Predictions – the year of macro risks 

    It is this time of again where most of us willingly and willfully make fools out of ourselves trying to predict the future of our industry. The momentous electoral events we have witnessed and those coming up in remind me that, even more so for the next 12 months, will rule and influence the state of financial services and . I will limit myself to comments pertaining to the US and Europe.


    I have already attempted to decipher a Trump presidency in a previous post, see here. Suffice it to say there will be winners and losers in the five sectors of the industry &; lending, capital markets, asset management, payments and insurance. Regtech may be impacted the most if the US experiences a wave of deregulation. Although I still ascribe to a secular and long term trend towards regulatory harmonization, we may see deviations at the margin, especially within sectors that are more domestic than international by the nature of their activity. I would not be surprised if US domestic lending regulation, compliance and enforcement be loosened while European consumer protection remain tight for example. Another area where one may see changes at the margin would be domestic payments. Still, when it comes to such sectors as capital markets, cross border payments, interbanking activities I do not expect much deviation from one jurisdiction to another and certainly no loosening up when it comes to clamping down on illegal activities, fraud. Hence cybersecurity, AML/KYC and reg/compliance thereof should be interested ecosystems with plenty of investment and operational activity. On another regulatory note ,2016 was the year of the FCA with it&;s sandbox. The FCA&8217;s initiative was so popular we ended with more than 8 regulators launching their copycat initiatives. I will make three in the sandbox space for 2017. First, regulatory sandboxes will be renamed &8211; sandbox is just a poor name everybody dislikes. Second, the US and the EU will see their own &;sandbox&; initiatives launched (where in the EU is a mystery) as hybrid collaborative efforts between regulators, technologists and incumbents. Third, there will be more collaboration at the &8220;sandbox&8221; level between regulators. Be that as it may I also expect the FCA to go from strength to strength given its clear leadership and first mover advantage (same for MAS, the Singapore regulator).

    I continue to worry about alt-lending or marketplace lending as rising interest rates will benefit first and while there is some room to increase the cost of lending, in a competitive market with regulatory oversight there is a limit to how high the cost of borrowing can go. On the other hand banks cost of capital will not rise as fast as those of alt-lenders. Therefore the next 12 months will prove delicate for this industry. I expect banks flexing their muscles and acquiring some platforms as well as mergers between alt lenders while the weakest competitors close shop. Whether this pattern will evolve in sync across the US and Europe I do not know. It depends on how US, UK and EU yield curves will behave. I certainly expect this pattern to occur in the US. On the other hand, infrastructure spending, if it is on a massive scale in the US, will have a positive impact on lending and fintech lending actors will benefit. One might even see fintech startups funded on the basis of infrastructure services for example.

    In the retail asset management sector we have witnessed a wave of consolidation in the US, notably with roboadvisors. Most incumbents have placed their bets and the few remaining independent startups have survived, so far. We have yet to see consolidation in Europe. Arguably, there are fewer roboadvisors in Europe than in the US and most are younger so we might not see full consolidation yet. I would not be surprised if a European incumbent or two makes an acquisition though. I remain interested in roboadvisor models, especially those that will make effective use of ETFs, micro investing or micro saving and build a social layer that enables high engagement. I think there is still space for these types of models. Additionally, there is still much to be done to modernize incumbents and to date few fintech startups with a b2b model have emerged in asset management. Some are due to pop up.

    In the payments sector I will go out on a limb and call for the rise of micro payments platforms in 2017, most probably powered by a distributed ledger . Most startups addressing micro payments have failed so far but it is only a matter of time before a startup or an incumbent hits the right note. Given the rise of m2m, p2m transactions with IoT and the continued growth of p2p as well as the explosive growth of other types of activities (esports, different models of media consumption from a la carte to subscription) it is only a matter of time before micro payments make it big. My bet is on both platform plays that provide backbone and infrastructure and front end models. Other than micro payments, I continue to be interested in b2b payments and services to SMEs. We have barely scratched the surface and financial services to SMEs are still antiquated. The prospects of a global trade war will not play well with trade finance and supply chain finance activity though.

    As for the ecosystem, 2016 was a fascinating year. We now have a pretty good picture of the landscape with up to 10 companies being the potential winners. Most of these winning companies have opted to open sourcing their code, collaborating with standards setting bodies, or working as a consortium with many incumbents. Other than a few financing rounds for some of these leaders, I do not expect much investment activity. Indeed I expect many casualties, acquihires or outright failures for the other weaker competitors. 2017 will be a year of consolidation in the DLT space while the winners go about their deployment business quietly. I expect further standardization efforts to bear their fruit &8211; &8220;yesterday and today&8221; in the capital markets arena, &8220;tomorrow&8221; in the insurance space. Finally I expect the start of the patent wars in the space. Most serious contenders have filed patents &8211; incumbents and startups alike &8211; and it is only a matter of time before some try to enforce these patents. Sooner rather than later is my bet.

    In the insurance industry, I expect more of the same, both in terms of level of activity and types of insurtech startups. I also expect emphasis on cyber risk coverage and on climate change given both are top of mind and material risks going forward. Cyber risk coverage is particularly interesting to me, given the rise of IoT and the security risks associated with both hardware and software in the space.

    On a more general level, I expect five themes to pick up steam in 2017. First, all the business models we have seen created and funded in fintech over the past 8 years will be revisited with an AI component &8211; be it machine learning, deep learning or other. This is bound to happen as AI is sweeping the business world. If mobile is eating the world, AI is the chef that is orchestrating the menu. Whether in lending, asset management or any other sector, I expect to see much activity in this domain and this includes new fintech startups getting funding, especially in b2b. An inevitable trend towards the cognitive financial services firm. Second, the convergence of software robotics, AI and automation will be applied at scale in what is called robotics process automation for banks and insurance companies alike. This is a pure b2b play for sure and I expect this sector to be a fertile ground investment wise. Third, platforms and ecosystems will continue to take shape as various banks further build their API strategies, their marketplace strategies, or even their bank as a service strategies. Whereas 2016 was the year industry thought leaders spoke about platforms, 2017 will be the creative phase for these types of business models. Some startups are already picking up funding. Expect more over the coming 12 months. One should note that platform business models require standards and interoperability. As such, I expect the beginning of standardization and open source in the field of bank as a platform or bank as a service, in a similar vein to the movement we have seen in the DLT/blockchain space. Fourth, the messaging platforms wars will be in full swing as Facebook, Apple, Google, Microsoft vie for dominance and expand their respective ecosystems. I expect more financial services incumbents to jump on the bandwagon and more startups to build their own apps. The lure of reaching millions of users &8211; customers and potential customers &8211; is strong. To me AI powered chatbots fall in this fourth category as few will be successful on their own and most will want to align with at least one messaging platform. In as much as PFM startups were not particularly successful and neither were account aggregation models, the messaging platform wars with their myriads of skills or applets or bots (voice or text or voice+text) present both an opportunity and a threat to the financial services industry. The threat is well known and lies with being further disintermediated and removed from the end customer. The opportunity is less obvious. Indeed, most fintech startups focused on retail use cases have failed to make any significant traction because either the service did not generate excitement and engagement (simple aggregation of data or accounts), or was too obtuse (too complex) or was too superficial (giving you options to consider) whereas what works usually hits on at least one of three dimensions: enhance an experience, accelerate a process, simplify a process. You can bet that the bots within the messaging platforms that will win the day will enhance, accelerate and simplify. It is up to fintech startups and incumbents to emulate best of breed as they will coexist within the same ecosystems. Else, fintech AI chatbots will  fail to impress much like PFM models did before. I should add that the messaging platform wars will be a wedge for GAFA to further encroach in the payments sector. Fifth, 2017 will be the year of digital identities. By that I mean most of the investment activity will be focused on identity business models. Some may consider this field not part of fintech. They will be wrong. there is no identity without trust and vice versa. Further identity and trust impact and influence payment methods and enable or disable currencies. I view digital identities as the corner stone of the future of financial services industry. I expect the investment pace to pick up in the identity space.

    A few random thoughts in closing. Should a Trump presidency usher an era of instability and trade wars, we will undoubtedly encounter currency wars. Should the EU further weaken in 2017, currency turbulences will be exacerbated. Should the renminbi further weaken, capital flows leaving China will accelerate. Thusly, it is not inconceivable that cryptocurrencies will benefit, notably , along with its ecosystem. In this macro case figure, and assuming legal and regulatory house sorted out with the SEC, I expect much activity with Initial Coin Offerings in 2017 (ICO).

    Finally, I expect subdued venture investment activity in Europe and the US in aggregate, especially in the first year of a new US administration which is still an unknown for many.


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