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SIBOS day 1 – How an app challenge can improve the use of Instant Payments

Sibos 2017Banks, PSPs and tech providers can all compete to present the best app (or the prototypes) for Instant Payments on the 6th of February in 2018 in Frankfurt during the #TIPSapp Challenge. This challenge is going to be organized to stimulate the creation of apps so consumers can pay easily via Instant Payments with those apps. The underlying infrastructure and several stakeholders will be ready in the near future to process Instant Payments. The European Central Bank (ECB) has initiated this app challenge to stimulate the uptake of these new payments based on new apps for consumers.

That was one of the most interesting aspects during the presentation of the European Central Bank (ECB) on the first day of SIBOS in Toronto. The ECB also introduced TARGET Services, the new umbrella brand for all Eurosystem financial market infrastructures. In this session Marc Bayle de Jessé, Sylvain Debeaumont and Mehdi Manaa from the European Central Bank talked about the functional aspects of the new TARGET Services. The European Central Bank is reshaping its market infrastructure services to enable citizens and businesses to transfer money across Europe 24 hours per day for 365 days per year. The main objectives behind this reshaping are innovation, safety, efficiency and resilience. Read more

How IoT changes financial services and banks

Banking of ThingsInternet of Things is going to change the business models of banks and financial services offering, generating great opportunities, but also new challenges.

According to BI Intelligence, in fact, currently there are 7 billion of IoT devices, but this number will rapidly rise to 22.5 billion by 2021. There is no doubt that the technologies related to the Internet of Things will be everywhere: in any company, in any device, in any network and even on any individual.

This scenario will create the so-called “banks of things” that take advantage of the customer data collected from any device to offer them different services. Banks will be able (and somehow they already are) to gather data from any device, including personal data collected by smartphones and also by wearable technologies or even connected cars. This data can be used, for example, to provide to the customers innovative services, more tailored to their specific needs. Read more

Infographic: The way forward to making Instant Payments a success.

The way forward to making Instant Payments a success.

Have a look at our infographic: Read more

Investments for Instant Payments will make payments as convenient and easy as possible

Michael SteinbachThe introduction of instant payments, real-time payments, will lead to a huge upheaval. That is what I predicted in a recent article in the German newspaper Börsen-Zeitung. Instant Payments are a hot topic and there is a reason for that. The estimated investments are higher than the introduction of the euro, which I explained in this recent article for the German magazine In Return. These investments are necessary to make payments as convenient and easy as possible for the end user, I stated in this article for Der Treasurer. In this blog post I will summarize the developments of Instant Payments for the banks and their customers.

Digitization is speeding up the development of payment transactions. This changes customer behavior, but also implies changes of the tasks for payment service providers. Payments are becoming a commodity, a general good for which no one will pay anymore. The competition for the benefit of customers is exclusively taking place on the product and services side. The payment process is integrated into the value-added chain, where e.g. buying is the main focus instead of paying. The entire process is increasingly being digitized, improved and simplified under the motto ‘convenience’. The customer will no longer perceive the payment process in this awareness as today. Read more

The challenges of (and the potential solutions for) processing Instant Payments

instant payments iconLow latency, 24/7 availability, connectivity and scalability. When it comes to processing Instant Payments, these are the four main challenges for banks and processors. This new and faster way to make payments has a lot of market potential, but the underlying infrastructures and processes need to be upgraded to facilitate the Instant Payments. I wrote an article for the German magazine IT Finanzmagazin to explain the technical aspects of processing Instant Payments. What are the technical challenges that come with the processing of Instant Payments and what are the potential solutions?

As written before on this blog by our CEO Michael Steinbach, the implementation of Instant Payments will have a bigger impact than the introduction of the euro or even SEPA. Let us take a deeper look into four of the non-functional requirements of Instant Payments. Read more

Countries should work together to improve business continuity management at European level

Leon StrousBusiness continuity management is one of the essential  measures against cybercrime, because it increases the quality of internal processes and by doing so  it reduces the risk of and impact from cyberattacks. How is this business continuity managed on a European scale? Leon Strous, Senior policy advisor at De Nederlandsche Bank, explains why business continuity transcends national policy and why every country has to collaborate.

The European Union has now taken a step forward in  strengthening the defensive line against cybercrime with a new directive. This European Network and Information Security (NIS) directive imposes requirements on the security of processes and systems or infrastructures. The  directive should be implemented in national law by mid 2018 and applies to so-called providers of essential services. With this new directive, the companies in the EU are indirectly obliged to take steps to improve their business continuity processes: better internal processes reduce the impact of incidents due to cybercrime. Read more

Instant Payments will have a bigger impact than the introduction of the euro or even SEPA

instant payments iconRecently I had an interview with Finextra about Instant Payments, the impact of its implementation and the related challenges and solution options for banks. In this blog, I’d like to elaborate on these same topics. I also invite you to watch the video interview on Finextra.

The payments industry is currently an exciting place to be, with market changing regulation such as PSD2 and a big push for Instant Payments, all happening at the same time. This definitely impacts the choices banks make.  Both PSD2 and Instant Payments require banks to reconsider their current strategies, but in a different way. PSD2 raises fundamental questions on the business model and positioning of a bank, like ‘Which position will I take in the value chain?’ On the other hand, Instant Payments mainly create challenges in the Operations and IT infrastructure. The impact of Instant Payments on banks’ infrastructures and the related investments should not be underestimated. In fact, the implementation of Instant Payments will have a bigger impact than the introduction of the euro or even SEPA.  Read more

PSD2: bank as a platform will rise as a new model

BankThe global payments industry continues to grow at a rate of 5% and within the next 5 years it could reach about €2,400 billion in value. This business can therefore represent an important revenue component for banks. Nonetheless, according to PwC’s analysis, the margin of commissions linked to the cash and payment services still has a limited weight on the total margin of the commissions (~ 10/15%) for the Italian banking sector.

So far, the protagonists of this business were operators who mediate large volumes being able to leverage economies of scale to offer payment services at an increasingly low marginal cost, enriching their range of services with complex products such as cash pooling. The market for payments between private individuals or small operators is rather fragmented and manned by operators who hold the customer’s payment account and lend traditional banking services. Read more

Will PSD2 bring the financial industry into a new era?

alessandro baroniA lot has already been said and written about PSD2, Access to Accounts and the impact of this new regulation on the payments industry. Alessandro Baroni, CMO of equensWorldline, elaborates on this hot topic in an extensive Q&A session, giving his vision on some crucial aspects of PSD2. Finextra published a short video interview with him on the same subject, which you can also find below. Read more

Instant Settlement by the European Central Bank is the alternative for interoperability

PaymentsThe European Central Bank (ECB) officially announced on June 22nd that it will offer an Instant Settlement service, called TIPS (TARGET Instant Payment Settlement), starting from November 2018. The ECB aim is to ensure the demand for instant payments is met at European level and to further facilitate the integration of the euro area.

The ECB has already published its draft User Requirements Document, which shows the ECB aims for this new Instant Settlement service to be fully compliant with the European Payments Councils Instant Payments initiative, SCT Inst and will offer banks and Payment Service Providers (PSPs) the ability to settle instantly at the European Central Bank, effectively eliminating credit and liquidity risk. This is important, as this allows volumes and value to grow without increasing risk for the users of Instant Payments. Read more