Focus needs to be replaced now by action

The financial industry is ripe for change and innovation. Some of these changes are being mandated by regulators. Other disruptions are coming from new technologies such as the rise of apps, mobile devices and social media which have an irreversible impact on customer demands and requirements. In the field of payments, it implies demands for new and innovative payment initiation methods, which are commonly called electronic Alternative Payments (e-APs). The growth of non-bank owned payment methods and innovative customer engagement strategies are propelling interbank organisations and member banks to reconsider the positioning of traditional ACH payments, cards and cash. The EBA has therefore taken up a role in promoting innovation and secure approaches to the design, implementation and use of (new) best-in-class electronic ACH and alternative payments, designed to help member banks keep up with change and stay competitive.

Also, as the number of online transactions is increasing, there is an accelerating demand of consumers and businesses for reliable and safe digital services. Solutions enabling the sharing of personal data in a private, controlled, secure and convenient way represent a large pocket of unlocked value. As a result of customer expectations, the demand for e-identity is growing exponentially driven by more users of digital transactions as well as the rise of transactions per user. The market is further fuelled by an array of security, privacy and KYC (know-your-customer) driven European regulation (PSD2, General Data Protection, SecuRe Pay, eIDAS, AML4).

In the traditional shopping experience, consumers are authenticated at the check-out point. Increasingly merchants are looking to position the authentication at the start of the shopping experience so that a better identification and understanding of the customer needs could be made at an earlier stage and hence merchants could enrich the customer shopping experience and improve their conversion rate. Controlling one’s digital identity services is the tool through which true customer centricity can be achieved. For consumers, the benefits are compelling too: faster service, lower prices, and products better suited to their needs, to name a few. In an increasingly digital society, personal data have become a new form of currency. The challenge is to establish the trust that keeps this information flowing. Traditionally, authentication is part of a payment transaction. Banks have an opportunity by unbundling the authentication/ authorisation services from the payments, and by opening up new e-identity opportunities. There are a number of good reasons why banks should move into the digital identity space. By leveraging on its existing assets, banks have the potential to deliver added value by enhancing both customer and merchant experience.

Lastly, consumers and merchants have a growing expectation for immediacy: immediate information and immediate payment or at least certainty of payment. New payment services will have to evolve towards immediate execution of payment orders followed by ‘quasi instant’ availability of funds for the payee. The panelists at EBAday 2015 will discuss these and many other topics in more depth. As an industry, having the best intentions is not good enough anymore. To remain credible, our vision needs to be accompanied by concrete actions.