Trends in the payments market Challenging financial institutions - - PowerPoint PPT Presentation

Trends in the payments market

Challenging financial institutions

Helle Reiff Koggersbøl equensWorldline

Customers and business models are changing

►

Global exposure leading to fickle & demanding customers

►

Consumer experiences are transposed into the corporate space

►

Expect individualized services and expect that you know their needs

►

Have low attention span, require immediacy

►

Anywhere & anytime - mobile

►

Convenience & user friendliness

►

Business models change and are increasingly becoming event/subscription based

Friend or foe?

Fintech vs BigTech vs “new” banks

► Cherry picking, revenue migration

Digitally based/cloud native – agile, cost efficient…entry barriers Disintermediation vs cooperation Digital leadership and financial performance 12% 38% 50%

Accenture/Caterpillars. Butterflies and Unicorns/2019

Digital focused Digital active The rest

Outdated legacy systems – a concern

Biggest inhibitor of necessary payments transformations

5

2/3

• f leaders

agree that business

• pportunities are

not realized due to

• utdated core

systems

71%

agree that existing systems are the biggest inhibitor of necessary payments transformations

• 1. Source: Accenture, “Back-office, it’s time to meet the customers”
• 2. Source: Finextra, “Payments transformation: Modernising to stay relevant in the digital age.”

Quick look at last weeks news…from Finextra

Just being there

▪ Compliance/standardization –> commoditization -> price pressure ▪ PSD2 & open banking – foundation for a paradigm shift? ▪ Banks still fairly reluctant, sharing ▪ Instant payments & request for payment ▪ AML/KYC/Fraud

Source: Financial News, https://www.fnlondon.com/articles/banks-face-spiraling-costs-from-archaic-it-20170912

80%

• f IT

budget

spent on existing software that needs constant updates to meet regulatory requirements

Sounds like a challenge

Trends are both reinforcing each other and pulling in different directions One size doesn’t fit all - considerable differences Regional, target audience, level of digitization

Some of the impacts…

▪

Volume

▪

24/7 & instant

▪

Revenue decreasing + moving to new entrants

▪

Compliance and non-differentiating services

▪

Cost base, legacy & technology

▪

Individualism

▪

Agility

12 % 38 % 50 %

Accenture/Caterpillars. Butterflies and Unicorns/2019

Digital focused Digital active The rest

Stick to it and look outside..

▪

Strategy – utility-full service

▪

Front end or scale

▪

Balance digitization & new services & compliance

▪

Modular and micro-services

▪

Look outside – to bring the best services forward

▪

Let somebody else do the commodity “parts”

▪

Use data to personalize your services

▪

Don’t forget your IT department

"If you want to go quickly, go alone. If you want to go far, go together.“

African proverb

Thank you

Helle Reiff Koggersbøl Meet me at the equensWorldline stand W134