Why it is not wise to waste time with only a few months until PSD2 is the new reality for banks   

Open bankingWith only a few months left before the implementation, it seems that the general opinion about PSD2 can be divided in two sides. On the one hand, there are the banks and consumers who don’t trust companies with bank details. According to research by Accenture, a clear majority of Brits is unwilling to share their financial data with those companies. On the other hand, there are those who see the possibilities of the new open banking ecosystem, where the consumer is in control to share the data with selected partners he trusts. In this blog, I would like to focus on the possibilities of Open Banking and to explore the chances instead of the setting boundaries.

When PSD2 is being rolled out in January 2018, it will be an important step towards a fully interoperable digital market. Consumers will profit from better services by third-party suppliers based on their banking account information, but banks, in general, see an uncertain future. ‘Many bankers fear that PSD2 will cause them to lose control of the client interface and so remain unsure how to respond to the PSD2. As a result, they follow a defensive, wait-and-see stance that is risk averse’, according to recent research from PwC. Read more

SIBOS day 3 – How API’s can be the game changer for the financial industry

Sibos 2017The panel discussion on the third day of SIBOS revolved around open banking and API’s. It was titled as ‘Disruptive threat or innovative opportunity’. The panel was formed by Jonathan Davey (Executive General Manager, NAB Labs & NAB Ventures at National Australia Bank), Erik Zingmark (Co-Head of Transaction Banking at Nordea), Louise Beaumont (Strategic Advisor, Open Bank at Publicis.Sapient), Carolyn Burke (Enterprise Payments at RBC) and Michael Tang (Global Financial Services Digital Transformation Leader at Deloitte) moderated the session.

The panel session started with a question about the promise of open banking. Beaumont (Publicis.Sapient) kicked off by explaining the four drivers behind open banking: regulation, consumer behavior, technology and competition. In her eyes, open banking should be about the promise to the consumer: “In the future you should be able to use services based on what you are willing to share.” Burke (RBC) was convinced that, with all these new players and developments, everything is fine until something goes wrong. People then know where to find the banks. Read more

Sibos day 2- Although Blockchain is interesting, it is far from mature

Sibos 2017

Distributed Ledger Technology (DLT) should be a solution to address a particular problem and not a solution looking for a problem. That was one of the key messages during the session ‘Blockchain and payments: Lessons learnt and future prospects’ on the second day of SIBOS. The panel members discussed ‘the initiatives across the globe to further experiment with block chain technology in pursuit of the holy grail of a production ready Distributed Ledger Technology (DLT) payments solution’. This blog will summarize the session.

A big audience attended this session, which shows that Blockchain or DLT are important topics for the guests present at SIBOS. DLT was also mentioned as an important topic for the banks and other companies in the previous blog post on the instant international payments. In this session, the discussion between the panel members focused on the present initiatives and future role of Blockchain. Matthew Spoke (CEO at Nuco Inc) was the moderator, Shirish Wadivkar (Global Head, Correspondent Banking Products at Standard Chartered), Yuko Kawai (Deputy Director-General, Head of FinTech Center, Payment and Settlement System Department at Bank of Japan), Ivar Wiersma (Head of Innovation Wholesale Banking at ING), Manish Kohli (Managing Director, Global Head of Payments and Receivables at Citi) and Carolyn Wilkins (Senior Deputy Governor at Bank of Canada) formed the panel. Read more

SIBOS day 2 – A discussion about the role of payment infrastructures in the era of instant

Sibos 2017On the second day of SIBOS, equensWorldline’s CEO Michael Steinbach was present during the panel discussion. The topic of the discussion was ‘Complementary or competitive? The role of payments market infrastructure and correspondent banks in instant international payments’. This blog is a summary of the panel discussion.

The session was moderated by Lisa Lansdowne-Higgins (Vice President Business Deposits and Treasury Solutions at RBC). The panel members were Andrew Brown (Chief Risk Officer at Earthporth PLC), Michael Bellacosa (Global Head of Payments at BNY Mellon), Leila Fourie (CEO at Australian Payments Network) and Michael Steinbach (CEO at equensWorldline). Read more

SIBOS day 2 – Banks should learn the lessons of telco operators to fully exploit the potential of PSD2

Sibos 2017Retail banks should position themselves as the every day digital bank with strong customer relations and provide services throughout the lives of their clients, support key events such as student loans, providing mortgages and pension plans. If they choose otherwise and follow the example of the telephone companies they may end up as a pure utility. That was the key message of Thomas Feiler (Manager Product Management Global Payments at equensWorldline) during his presentation on PSD2 at the second day of SIBOS.

His presentation ‘Unlocking the potential of PSD2’ focused on PSD2 and why banks should see this as an opportunity rather than as a threat. One of the main reasons for PSD2 was to enhance innovation. But PSD2 is not the only regulation and development within the payments industry. The combination of regulation such as GDPR and eIDAS with trends like Open Banking and Blockchain cause further complexity in the payments industry. Feiler: “For any party it is of the essence to deal with this in a cost-effective way and come to simple solutions.” Read more

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