Fighting the friction: Bridging the gap in innovation between B2C and B2B payment solutions

The elimination, or at least reduction of all forms of ‘friction’, perceived or obvious has been an enduring human obsession, and great excitement surrounds new discoveries. One can only imagine the furore that followed the first ancient Mesopotamian saying to his or her peers, “Hey guys, instead of dragging this heavy wooden box across the ground…why don’t we attach some round things that spin to the underside?”

Fast-forward 5,000 or so years, and though the types of friction we are seeking to reduce have become a little more nuanced, the excitement of a new discovery is just the same. It’s what makes FinTech such an exhilarating industry to be a part of, as such discoveries and innovations are increasingly prolific. ‘Friction’ in our industry usually refers to the time taken to make payments, and ‘frictionless payments’ are those transactions that can be completed in an instant.

Boost revenues and cut wasted marketing spends with enhanced insight into digital sales

Digital marketing and promotion is now commonplace in retail banks. And with the rise and popularity of online banking, how customers consume financial products has also been transformed. Sales, the crucial link between the two, is also making digital progress too. The top ten banks across the UK, US and Australia now offer digital applications for 6 in 10 personal banking products. The ever-growing power of the internet makes the need for this integration of digital – and the opportunity it presents – obvious.

While substantial progress has been made it also shows there is still room for improvement. And this is especially true when it comes to digital sales. For example, retail banks are behind when it comes to the sharp rise in smartphone use, and the potential for mobile as a sales channel. Despite the availability of online digital applications, only 9% of personal banking products in the UK can be applied for using a mobile device. With two-thirds of UK adults now owning a smartphone, there is every reason to forge ahead in this area.

Why it’s time to embrace the big opportunity of Open Banking

Earlier this month, the Competition and Markets Authority (CMA) published the final report on its retail banking market investigation. By requiring banks to implement Open Banking by early 2018, the report claims it is paving the way for a revolution. While debates rage on about the specifics of the report and how far (or not far enough) it goes, it accelerates and supports the UK’s move to a transformed banking landscape based upon a foundation of Open Banking.

Before I go on, let’s be clear – the CMA’s Open Banking programme is not a new concept. It is based on the HM Treasury initiative, powered by the Open Banking Working Group (OBWG), who are determining the open API standards for Open Banking. The timeline has already been set in the Open Banking Standard. Add to this the API mandate of the European Commission’s upcoming revised Payments Services Directive (PSD2), and it’s clear that a tour de force of regulation aimed at bursting open the banking industry is already on its way.

UK FinTech: Life after Brexit

Eight weeks ago I wrote Part 1 of this post called #Brexit good for UK #FinTech and got an overwhelming response - mostly abuse! I had to double check my post to make sure I hadn't inadvertently insulted somebody's prophet or, worse, suggested again that Bitcoin is just an over-hyped big waste of electricity! Turns out I simply held a controversial and, what I thought at the time to be, minority view.

Then something interesting happened. In my role I have the privilege of speaking at a lot of FinTech events around the world and for the past few months the conversation tended to turn to #Brexit. Publicly folks were quite vocal about their brexit concerns but privately (for Europeans) they were rather envious of the UK being given the opportunity to decide and mostly saw brexit as an opportunity for the UK if handled correctly.

When I pressed for why they weren't blogging/posting that view it was one of self-censorship. Folks working for big corporates and larger startups were understandably concerned about making public remarks for fear of being quoted and contradicting the (usually Remain) party line of their leaders. Secondly the brexit camp has been consistently badged as a bunch of bigoted loons so they didn't want to be tarred with that brush!

GFRC: Bringing critical functions together

Post-mortems of the financial crisis concluded that certain practices had infected banks with a near-fatal case of myopia. Each segment, or silo, within an organisation – whether a business or product line, geographic jurisdiction or category of risk – was the master of its own limited domain; no one was clearly and unambiguously responsible for assessing the big picture as far as risk and performance were concerned. A holistic approach to Governance, Finance, Risk and Compliance (GFRC), can help banks looking to combat antiquated organisational structures and technology, adapt to the new regulatory landscape.

Foremost among the responses to the financial crisis was Basel III, the governance guidelines proposed in 2010 by the Basel Committee on Banking Supervision, revised and expanded since then and in the process of being implemented worldwide. Beyond Basel III, institutions must contend with European Union initiatives, including the latest iteration of the Capital Requirements Directive (CRD IV); the Markets in Financial Instruments Directive (MiFID), for investment services; the European Market Infrastructure Regulation (EMIR), covering derivative instruments, etc. Firms are also implementing principles revised by the International Accounting Standards.

BCBS 239 compliance: A catalyst for effective change

It’s the end of May 2016 and as the BCBS 239 deadline is now five months overdue, banks are still asking what approach towards compliance will prove to be the most effective. Some banks have taken a methodical and timely ‘check-the-box’ approach whilst some have viewed the regulation as an opportunity to thoroughly strengthen their underlying governance, architecture and data quality.

To first understand the logic behind both strategies, it’s worth revisiting what the regulation is and how it came to be. Back in January 2013, the Basel Committee on Banking Supervision published the BCBS 239 principles for effective risk data aggregation and risk reporting, in response to the lessons learned during the 2007 global financial crisis.

UK retail banking in need of transformation

After a two-year investigation the Competition and Markets Authority (CMA) has published provisional recommendations to improve retail banking in the UK. It’s a sector that deserves attention but once again a golden opportunity to perform a radical overhaul of the existing market has been shunned in favour of a more modest set of anticipated outcomes. 

The Biometric Banking Revolution

You only have to look through the newspapers of late to see that the biometrics revolution is well and truly entering the mainstream. From voice recognition, to fingerprint and retina scanning, many industries are poised to, and in some cases, already benefiting from new authentication technologies. 

No sector is experiencing this new wave of identity-defined authentication quite like the finance and retail banking sectors. High-profile banks and financial organisations such as RBS, Nationwide MasterCard and HSBC have taken significant measures to put their customers’ identity firmly at the centre of new security policies. It’s this approach, matched with the latest in technological innovations, that will and should be implemented across a variety of sectors.

The 'Pay' model is strong but the banks are still in play

The big guns – Apple, Samsung and Google – are dominating the mobile payments news cycle now that their respective ‘Pay’ platforms threaten to disintermediate the world’s banks. 

They won’t have it all their own way, though; banks are responding with their own platforms. But is it too little, too late?

Life after Deutsche Bank split?

Deutsche Bank is pondering the future of its retail operations and this might have significant implications for its IT landscape. A number of proposals are currently under discussion, which would see Deutsche Bank selling off its subsidiary, Postbank, and possibly its own branded retail banking business. According to Reuters, Deutsche Bank’s management favours the sale of Postbank but would prefer to keep its own retail banking unit.

What does the future of the bank branch hold?

NCR video ATM ©NCR

Is the branch dead? On evidence of the RBR Branch Transformation event held in London, the answer is a resounding no. Banks from around Europe lined up to discuss how they are transforming their branch experience to meet the demands of the modern retail customer, and while the consensus is that branch networks are shrinking, the branch remains integral to customer acquisition and retention, as well as for generating product sales.