Community

Good article. Resonates with my definitions in Why Banks Will Never Catch Up With Fintechs. I've been involved in selling IT to BFSI for 30 years. I'd love to believe your claim that "digitalization and adoption of new technologies has impacted the full financial services industry". For decades, revenues from FinServ for many IT companies topped that from all other industries.

However, I totally disagree with your inference that "there is no line anymore between banks, Fintechs and traditional banking software vendors." For 30 years, and even before that, the line was extremely clear: Fincumbents knew their exact role, their fortunes were joined at the hips with the thriving and flourishing of traditional banks.

It's the flopshow of these new-fangled fintechs that's causing the line to blur. These fintechs required VC funding. Much of the venture capital opportunity in Internet has been in displacement, not creation. Fintechs had to chant the disruption mantra to attract capital. While they succeeded in raising capital at frothy valuations, they failed at their core mission to kill traditional banks. They'd sound silly repeating their 10 year old charter mission in public today. But they still need VC funding. So they can't stop claiming that they will kill banks in private. This put them in a bind. That has caused the blurring of the line. Not the impact of tech on finserv, which is well known for decades. 

This blurring in line serves fintechs, not banks. Banks don't attend the conferences of all their supplier communities. Likewise, they shouldn't attend fintech conferences. It's the job of these conferences to screen the fintechs. Once they've surfaced the best fintechs, banks should meet them in private to know more about their offerings, as they do with all their other suppliers.

Banks are not stupid to give preferential treatment to people who promised to kill them in public until recently and continue to do so in private.

I get sending fiat currency from one country to another but what does it mean to send large amounts of Bitcoin from Dubai to Russia? #SeriousQuestion

"Weekends, time spent with loved ones, and sleep didn’t need to be sacrificed to keep critical payments and ecommerce services running."

LOL. You must be very lucky if you've experienced this. 

In every payments op that I've been involved, this is a utopia even when we're not buffetted by a couple of Black Swan events at the same time.

I normally tend to wonder whether Retailers Want To Have Their Cake And Eat It Too? But, in this case, I'm on their side.

Also, SCA is not going to protect consumers' interest by any stretch of imagination. Lack of SCA may lead to fraud, which is a < 1% problem but, going by the 2FA experience in India for the last 10 years or so, SCA will lead to tremendous friction and failed payments, which will easily be a >10% problem. Net net consumers will stand to lose, not gain, due to SCA.

There's no doubt that frictionless payments reduce abandonment, improve conversion rates and increase revenues. But I'm a little confused by what you're shilling: "Though creating a payment platform in-house may seem to PSPs like the best way". Did you mean Merchants? Because the raison d'être of PSPs is to create a payment platform inhouse and I'm struggling to understand your pitch to PSPs to avoid doing that.

When I wrote When Will Fintechs Sell What Consumers Want To Buy? in 2018, I was alluding to Credit Card. Since then, there has been a trickle of credit card offerings from fintechs / nonbanks viz. Petal, Apple Card. Hope Railbank's Credit Card As A Service platform changes that to a wave.

While I'm personally gung-ho about the prospects of Railbank's CCaaS, I'm a little perplexed by its own role model "Fintech has changed the face of much of the banking industry". With less than 1% of bank accounts in the USA (Source: Cornerstone Advisors), fintech has done no such thing.

In fact, as I've often predicted in the past, credit card will be fintech's real chance to change anything about the banking industry. Not yet another bank account or payment app or PFM / MoMMA.

I never thought my joke will come true but it has. 

I read on Quora today that a certain electric company in Bombay, India, is offering loans for paying monthly electricity bills.

So, subscriptions are not going to challenge loans.

After reading this tweet, I'm not so sure if I want my bank to move to the cloud. Pay-per-Use paradigm of Cloud will most likely deliver inferior CX.

A2A payment apps (PayM, myBank), PFMs (Mint, Kublax) have been operating (and dead) for ages without requiring Open Banking. I don't see anything in this post - or anywhere else for that matter - that explains what more revenue profit opportunity exists for banks from Open Banking-based Payment and PFM providers?

And, as I pointed out in my comment on this Finextra article, I was terribly surprised that the PAYMENTS category is altogether missing from the Open Banking App Store.

Compared to Twitter, LinkedIn et al, who are quick to shut access to third party apps that gain too much traction basis customer info they get from them, banks have done a far better job of supporting Open Banking (I don't know why). 

According to an article I read recently, over 40 countries have Account-to-Account Real Time Payments now. The first three to implement it were: 

* 1973: Japan - Zengin

* 1987: Switzerland - SIC

* 1992: Turkey - TIC-RTGS

UK launched FPS in 2008. India launched IMPS in circa 2010 and followed it up with the mobile payment equivalent UPI in 2016.   

Keen to know what timescales you have in mind when you refer to TIPS and NPP as "early adopters".