Money 20/20 Europe: banking’s brave new world

Copenhagen was the venue of choice for the annual fintech event, Money 20/20 Europe, this year which was spread over three days last week. With more than 70 sessions across five tracks, industry leaders and senior figures from around the world came together to discuss the emerging trends in payments, artificial intelligence (AI), the rise of biometrics, fraud and more.

The banking revolution

How the banking industry will evolve over the next 5-10 years was a hot topic for discussion. With fintechs and challenger banks vigorously entering the payments space, there’s a new breed of digital entrepreneur inspired by the application programming interface (API)-driven world around them who are looking to transform consumer banking.

Twitter’s chief executive officer (CEO) Jack Dorsey – attending in his other capacity as founder and CEO of California mobile payments start-up Square, kicked off the conference with his opening keynote speech focusing on why creating seamless e-commerce experiences is essential. He suggested that executing ideas efficiently is the only way to get started in the industry: “You don’t have to be first, you just have to be the best.”

Speaking about Square, Dorsey focused on how digital banking will continue to transform the way in which consumers manage their finances, commenting: “I can’t wait for a time when plastic doesn’t exist.”

He was followed on the main keynote stage by Carlos Torres Vila, CEO of Spanish bank BBVA. “People don’t like banking,” he told his audience. “They don’t like to manage their finances. They don’t dedicate time to manage their finances. When asked, more than 70% of middle-class citizens stated they should have started saving earlier. More than a third of middle-class citizens don’t have the most basic financial habit – to save for an emergency.”

Next up was Ashok Vaswani, CEO of Barclays UK, who spoke about how open banking will transform the industry and revolutionise the payments landscape, but stressed that customer trust will be crucial to succeeding with the new regulation in place.

Emerging trends in payments

Murray Raisbeck, partner at KPMG, hosted a session in which he analysed the trends from KPMG’s recently-published Pulse of Fintech report. Analysing the report’s data, Raisbeck picked the three trends to look out for in Europe this year. This included the impact of Europe’s new Payment Services Directive (PSD2); challenger banks in the UK (where 26 have secured banking licences since 2013); and Ireland as a post-Brexit hub with the capital, Dublin, attracting business.

Another emerging trend from the conference was the application of blockchain and shared ledgers. Dr Won-Pyo Hong, president of Samsung Pay SDS (the information and communications technology (ICT) services and solutions arm of Samsung Group), spoke about how large-scale developments are starting to build on blockchain and move from proof of concept (PoC) to real world implementations.

He predicted that blockchain will become increasingly mainstream over the next year, as an incredibly important technology that adds value, simplifies process automation and creates business innovation.

Customer loyalty was also a key topic of discussion at the event. Philippe Vallee, CEO of Dutch digital security specialist Gemalto NV, analysed the payments ecosystem and discussed how to reduce friction in the customer journey, which he believes is vital for success.

Customer loyalty is changing, Vallee explained, citing consumer research that found 38% of individuals surveyed would leave their bank if another provider offered better services and 44% would also leave their bank in the event of a security breach. He stressed that the industry must work together to constantly enhance the user experience without compromising security.

Biometrics was high on the agenda with experts discussing how the technology is becoming increasingly diverse and crucial for the payments ecosystem. Biometrics tackle the on-going issues of trust in e-commerce and online payments and help create a frictionless experience for consumers by enabling simple verifications. With mobile devices and Internet of Things (IoT) technologies enabling fingerprint, face, voice and iris recognition, these methods are being used for online and in-person financial transaction authentication.

It is also predicted that no less than 30 billion devices will be connected to the internet by 2020 – nearly double the current total. Competition from new entrants will continue to drive innovation due to the advancements in technology.

Applications of AI

AI has become a main staple of financial services in recent years. The technology has been adopted for a multitude of applications. Not only has machine learning been a driving factor in fraud management, it also provides a transformative service that offers enhanced management of customer data, an improved customer experience and reduced incidence of false positive declines.

Google’s product management director – consumer payments, Gerardo Capiel, was interviewed about AI and machine learning technology by Dave Birch, a director of the secure electronic payments firm Consult Hyperion. Capiel explained how both technologies will be increasingly applied to Android Pay and are already used to help current users.

“As we get more and more into loyalty points and offers, we’ll use machine learning to recommend what loyalty programmes you may want to sign up for,” said Capiel who outlined how Google wants to tap loyalty points and transform the retail experience.

Towards a cashless society

China’s payment platform Alipay is leading the trend towards a cashless society for the country’s consumers and Rita Liu, its head for Europe, the Middle East and Africa (EMEA) at Alipay took the stage for her keynote presentation to speak about how Alipay and affiliate AntFinancial are driving the trend towards a cashless lifestyle for consumers in China.

Fintechs are looking to expand their borders and bring cashless trends to new geographies, Liu stressed. With over 450m users in China, Alipay has been leading the country’s development of alternative payment methods.

Consumers are exposed to a wider array of financial options than ever before and there are countless options and apps when it comes to digital banking. The ubiquity of mobile devices and tremendous growth in connectivity is fundamentally changing the way in which individuals bank and access other financial services.

Will Gaybrick, chief financial officer (CFO) of internet payments platform Stripe, took to the main stage to discuss how the company’s technology-focused approach is helping solve businesses’ complex financial challenges.

“By design, the internet is borderless,” he said. “Commerce on the internet is a story of international marketplaces and platforms.”

Day three of the event also had a heavy focus on the power of biometrics, which are becoming increasingly diverse with mobile devices and IoT technologies enabling the use of fingerprint, face, voice and iris recognition for online and in-person financial transaction authentication.


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