New payment service providers and a rapidly changing technology landscape are changing the way banks approach innovation in paymentssays KPMG.
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Will banks give way to fintech?
Banks no longer dominate the sphere of payments. The new financial technologies and fintech startups They are taking over the market.
According to KPMG, banks and financial institutions financial services they held a monopoly on the payments ecosystem for many years.
However, in his report "The Future is Open: Reshaping the Banking Experience", the global consultancy says that more recently, the market has seen the rise of a host of new service providers. These innovators, like Apple Pay or Google Pay, bring a new model based on business networks driven by an online presence and partnerships with larger market players. Fintechs as Fazil, the neobank of young people in Spain adjusted to their times, offer banking services in a 100% digital.
KPMG says that as a result of this change, many banks have chosen to work closely with these new payments innovators to "create solutions and tools that respond to changing customer demand and keep the bank in the value chain." .
As a consequence, he says, new innovations and models are emerging.
According to KPMG, innovation is crucial in the payments space. Increasingly, banks will find that partnerships with third-party providers will help this innovation continue.
However, this creates a "third party risk". On this, KPMG says: “many of the best-integrated payment service providers are now so connected to their banking partner's businesses that there is often little difference between a bank's payment systems and employees and those of its providers. external payment.
Major financial services institutions are focusing on managing these relationships, KPMG explains, so that the providers become an extension of the bank's business.
Will payments that do not go through traditional banking be safe?
A central focus of payments innovation is security. KPMG explains that banking and payments executives need to focus on this, along with customer convenience, for any new innovation to succeed.
This is particularly challenging given the pace of change in technology and consumer attitudes: people who want to bank and manage their payments through phones or watches, For example.
As a result, banks need to ensure that, as part of any innovation program, they remain open to the latest customer trends; this must be done while maintaining dedication to the highest standards of security.
As for developing long-term strategies, KPMG recommends that banks and payment providers make "a more concerted effort to embed security into their products, services, and operating models."
This can be done, he says, by incorporating cybersecurity early in the program. Similarly, everyone involved in the organization and ecosystem must be actively involved in any cybersecurity initiative.
To deliver what customers want, he concludes, providers must see a step change in risk model controls and capabilities.
Without a doubt, from Fazil we are convinced that very powerful changes will come in the medium term in terms of new payment methods refers to and we will always look for our users to be the first to surf the waves that arrive, and the ones that from Fazil we will create 🤑. We encourage you to take a look at our post on how the pandemic will accelerate the fall in cash and reflect on all that it will entail…
And of course, if you are not yet paying your daily expenses with your mobile 🤳with the free Fazil VISA card, enter now fazilpay.com.
