EBAday 2016, Europe’s leading transaction banking and payments exhibition and conference organized by the Euro Banking Association and Finextra Research between June 7-8th, in Milan, put in the spot light hot topics of the payments industry agenda under the umbrella: “A brave new world for payments – the future of European payments industry”.
More than 85 of the industry’s top executives from leading financial institutions debated in the two days sessions about: PSD2 and the potential for APIs, real-time payments, regulatory challenges, trade finance, Intraday liquidity management, E- and m-payments, blockchain and distributed ledger, cybersecurity, SEPA, disruption vs. revolution, trends in global payments or the impact of Fintech companies in the banking system.
PSD2 and APIs
Among the most debated subjects at EBAday 2016 was PSD2 – the impact on the industry, the transposition of the regulations and the opportunities for banks, and APIs. The speakers said that PSD1 was more of a compliance issue, while PSD2 appears to be an opportunity for banks to focus on the strategic business opportunities. The regulation is helping to steer the banks to new initiatives and innovation in services, if banks look up to this as a great opportunity to better service for their customer. Some of the participants consider the legislation will usher in new unconventional partnerships between banks and new entrants to address the issues at hand.
APIs could pave the way for open banking with Fintech and PSD2 pushing the envelope. Banks could also gain a competitive advantage by accessing other bank APIs to provide added value services. APIs have the potential to provide a pick and mix package of banking services for customers. From the customer perspective, the API will provide more relevant services. There were also voices who said that the utopian ideal of the single API has to be the way forward. The key is how to open it up while maintaining a degree of trust that underwrites the liability.
Instant Payments
As in the previous years, instant payments covered a lot of the speeches. Banks need to find their value in the new ecosystem. Faster, cheaper, simpler, flexible, 7/24/365, more open and secure are the keys for the future payments.
The cash is still king, 60% of payments transactions in EU are conducted with physical notes and coins. A lot of cash is still used because of merchant rebellion against high interchange fees. As business models change there is now a discrepancy between where fees are charged and where value is provided.
Customers want an easy experience and fast payments at minimal cost. Customers are willing to change behavior if they are moving to one single payment experience and easing the experience for them is the key.There were also affirmations that said there is too much complexity in cross-border payments and not enough transparency around costs.
Also, instant payments brought into discussion security challenges. Changing the system to aid convenience and speed cannot come at the cost of lax security. In some years, instant payment will show a gradually development, and it expects that in the future all the payments will be instant as we already leave in an instant world.
Disruption vs. revolution
It is a little bit of disruption and revolution with all the digital and technology concluded the speakers. Revolutionary advances in mobile and AI are pushing payments along an evolutionary path. No talk on disruption would be complete without the mention of blockchain technologies. All the banks are watching this technology very closely and some of the banks already invest with opportunities at the last mile of the payments chain and in the trade finance arena.
For the first time at EBAday, the organizers set up a special corner dedicated to Fintech. New customer centric startups are beginning to insert themselves into the value chain, providing services which big banks cannot match.
Allevo at EBAday
As members of the European Banking Association, we had the chance to take a front row seat at the EBA Annual General Meeting and catch-up with everything that happens in the financial industry across the globe with impact on the European area – from technology to business and from regulation to innovation.
Allevo was once again among the exhibitors at EBAday, joining a select club made up of the biggest European Banks and international software vendors, market infrastructures and consultancy companies. This represented a great opportunity for us to meet old partners, update each other on the latest evolutions and the latest hot topics in the fintech industry. It was also a chance to generate new contacts and promote our FinTP open source solution for processing financial transactions and the FINkers United community around it.
This year’s experience represents a major milestone for the evolution of Allevo’s international presence and a great opportunity for exchange through networking with other participants at the conference.