Payments professionals from across Europe are gathering in Helsinki this week for EBAday, hosted by the Euro Banking Association and Finextra. We're liveblogging events here.
17.05 And that's a wrap for EBAday 2014! We'll be back for more next year as the European payments industry convenes once again in Amsterdam.
17.02 Lights down as the crowd is treated to a thumping video re-tread of the last two days. Hey, who's that bleary-eyed looking guy in the front row furiously tapping on his laptop? (Actually, I made that last bit up.)
17.00 Plaudits are handed out to the audience, the exhibitors and the Finnish banking federation for helping to make EBAday 2014 such a great event, and the biggest since its inception.
16.55 Bingo! Nymphius brings up the red trousers. "This EBAday was incredibly colourful...With great discussions on the sidelines and the exhibition floor. And it was historic, in that it marks the first time in our nine-year history that we have returned to a host city, here in Helsinki."
16.50 Westerhaus says events like EBAday are important forums where market participants can listen and learn lessons from their peers. The industry needs to ensure that the platforms which are being built today to operate in a post-Sepa world are efficient and better than what has gone before.
16.45 Poutiainen says banks have to learn to work better in the collarative space, do the standardisation, and work in partnerships. Alien concepts to most banks, but it will be necessary if the industry is to continue to prosper through to 2020 and beyond.
16.40 Addressing the knotty problem of silos in the banking industry, Lichter says silos are not created they just grow, eventually becoming a form of sclerosis within a company. However, silos will no longer be able to exist much beyond 2020 as payments standardisation and harmonisation take hold.
16.30 To sum up two days of intense debate and networking we turn to the moderator's roundtable, comprising Nordea's Erkki Poutiainen, EBA chair Hansjörg Nymphius, Christian Westerhaus from Deutsche Bank, and EBA Clearing chief Gilbert Lichter.
16.00 Here's an example of a collaborative initiative among a telco and two banks on innovative services that's breaking on Finextra today:
Telefonica, CaixaBank and Santander JV launches small biz customer loyalty service15.50 Banks need to co-operate with third parties, says Liscia, if they are to provide true interoperability. Manning says there's a fine line in co-operation versus competition. She refers to Swift's failure to get agreement among banks on EBAM. But along the payments chain, she believes there can be areas around AML, security, settlement and clearing, where banks can co-operate successfully without fear of disintermediation. Egner says there is no common understanding between the retail and wholesale sides of the bank. One of his biggest problems is getting products out to the market that are backed by one single opinion from the bank.
15.35 Thomas Egner says innovation entails introducing measures that enhance the customer experience. However, bank infrastructures have to be able to handle the enhancements. Sia's Polissi says the key infrastructural issue is interoperabilty. Mobile wallets, for instance, need to come with ready integration to card schemes and to e-commerce platforms like EBA Clearing's MYBank.
15.30 Vanessa Manning says banks can't have a superiority complex over the issue of innovation. She says most banks are having a very hard look at themselves to see if they really are 'fit for future'. Deployment of new solutions requires an organisational mindshift to enable self-build. Infrastructure and organisation around delivery needs to be agile and open to third party partnerships, she says.
15.25 Netcomm's Liscia sets the scene, running the down the well-worn scenario of payments as a commodity, unbundling of the value chain with new players delivering value added services in the form of loyalty vouchers and coupons over mobile devices.
15.15 For the day's final streamed session I'm checking out the enigmatically-entitled 'Innovative Solutions' panel, presided over by Netcomm's Roberto Liscia. Speakers include: Thomas Egner, Preta board member and chair of EBA Clearing's innovation committee; Vanessa Manning, RBS; Marco Polissi, SIA. Expect more 'red trousered' references.
15.00 Heading in to the home straight and lots of happy faces on the exhibition floor.
14.35 Interesting question: How can banks make their investments in Sepa profitable? For McNulty it depends on the type of banks and core strategy. Regional and global banks probably have an advantage in a Sepa environment to pick up new business, he says. It will be much more challenging for local banks. The standardisation around Sepa will enable banks to shift their thinking and build in new value added services, he says. The bigger issue may be internal, ensuring that staff maintain momentum and don't become 'Sepa weary".
14.25 Jan Paul van Pul from ABN Amro says the biggest concern comes from research conducted among corporates in which 42% of those polled say the handling of transactions in terms of dealing with returns and revocations is worse than in the pre-Sepa era. We have to fix that, he says. Looking at the stats on rejected payments, some 42% of returns could not specify a reason why the transaction failed. This is causing chaos, says van Pul, We must get this resolved immediately, he tells the audience. The EBA has started work on this through its
Smart working group, says van Pul, calling for all banks to come together and participate in the work.
14.20 Time for the corporate rep to take the stage. Jose-Carlos Cuevas of Alstom cites problems around implementation cost and XML, missing collections, and delayed payments. Some problems on the banking side and some from the corporate community, which may have not been fully ready. Looking ahead to Sepa 2.0 and pushing banks for improvements in straight through processing. This will be the next challenge for the coming years.
14.15 Did corporate get what was promised asks Jean Pic Berry. Yes, he says, in that they got plenty of blood, sweat and tears. Nonetheless he remains positive, in that the industry has successfully constructed a huge processing infrastructure with much promise for future innovation.
14.10McNulty: "Sepa is not finished, we're really only at the beginning." As a tech project it's been very successful but it has yet to provide corporates with real value in delivering truly standardised payments. Beyond that, the bigger picture will come from opening up Sepa beyond the euro zone to other countries, he says. Most banks have yet to assess where they should sit in this emerging environment, particularly from a correspondent banking standpoint
14.00 Lunch over, it's the time for the corporate community to take the stage with this afternoon's sessions devoted to topics with a treasury bent. I've checked in to the Sepa session, which asks if corporate customers got what was promised to them and looks at the remaining challenges post-migration. EBA chair Hansjörg Nymphius moderates and the panel comprises Stet CEO Jean Pic Berry, Jose-Carlos Cuevas of Alstom, Mark McNulty, Citi and Jan Paul van Pul from ABN Amro.
13.00 A quick response from Bold Rocket, as Tarver moves to wrong-foot the bankers again. Sub-text: Red was so last century:
13.00 Andrew Tarver's colourful attire at yesterday's
opening plenary has stirred as much debate as his lively demolition of the banking sector, with many reference to the 'red trouser question' and the 'red trouser man' peppering subsequent sessions. Mind you, I think this may be stretching the metaphor a little:
12.25 While lunch is served, some food for thought from iGTB's MindCloud display on the exhibition floor. Delegates have been polled on the likelihood of Sepa being achieved within the timeframes specified by the European Commission.
- 60% think that it will happen and this will be a good thing
- 22% think it won't happen and they are unhappy about this
- 9% think it will happen and this is a bad thing
- 9% think it won't happen and they would be glad about this
12.15 E-government has been very important as a catalyst for the development of a number of innovations, says Flatraaker, citing achievements around the use of e-invoicing and bank IDs. Government can be a great source of fuel for generating critical mass for innovation, he says. Nillson agrees, but would rather the government was more involved in pushing the digital agenda at the consumer end.
11.55 Flatraaker offers up a 2011 McKinsey snapshot on clusters of countries in terms of online innovation. All four Nordic countries appeared in the upper quartile for self-service Internet usage. He says mobile represent the new wave of innovation aligned with the use of digital identity services. Syvanne says the Nordic have a 'can do' attitude to innovation. Points to the development of a pan-European multilateral euro clearing platform and centralised clearing across the banking sector as an example of classic interbank innovation achieved through collaboration. For the future he would like to see the introduction of harmonised transAtlantic payments using XML formats. For Nillson, the corporate and consumer sectors are beginning to call for the creation of a pan-Nordic payments platform for e-commerce services. However, payments is just a small portion of the equation, additional layers are required around digital identity, security and logistics. SEB's Bergman says in e- and m-commerce it may be more important to get started with new services rather than waiting for full harmonisation. The days when banks could take their time to deliver a fully polished, highly stable platform are long gone.
11.40 No Danes on the panel, but all four banks represented operate across the Nordics.
11.30 Fully recaffeinated, we're off to a stream on Nordic payments innovation, moderated by Nordea's Erkki Poutiainen. Speakers: Dag-Inge Flatraaker, DNB, Kirstine Nilsson, Swedbank, Petri Syvanne, Nordea, and Henrik Bergman, SEB.
11.05 While the rest of the crowd indulge in the great Finnish love for coffee, the Finextra TV crew remain hard at work in front of the cameras.
10.55 Sepa rears its head again. Newstead says cross-border faster payments is the next interesting question. The Fed has expressed interest in linking ACHs for cross-border payments. He says the European Central Bank has also started showing an interest in real-time faster payments for consumers across borders. The introduction of an instant Sepa Credit Transfer would represent the start of Sepa 3.0, he believes.
10.45 Faster payments is creating new competition and leading to new services, says Hartley, pointing to its uptake by payday loan companies, Paym and Zaap, among others.
10.35 Simon Newstead from RBS describes faster payments as an "unstoppable trend". Combined annually with growth stats for mobile phone usage and traffic, immediate payments have a critical role to play in enabling the digital infrastructure.
10.30 Wright refers to faster payments as a once-in-a-generation paradigm shift. To remain relevant in a mobile world banks need to offer near-instantaneous payments. Mark Hartley says different drivers for different countries and different groups of customers. For example Brazilian banks moved to immediate payments some time ago to cope with hyper-inflationary trends.
10.25 Seguing straight into the parallel streams, I've pitched up at 'The case for immediate payments', moderated by Banking Tech's David Bannister. In the panel we have Clear2Pay chief innovation officer Mark Hartley, Simon Newstead of RBS, James Wallace, IBM, and Joanna Wright from Fundtech.
10.15 Higgins has some interesting war stories on fraud and security. Refers back to a $10 million hack using pre-paid cards that hit the bank back in 2009. A similar incident occurred recently at a Middle Eastern bank. RBS spotted anomalous behaviour at its ATMs, alerted police and stopped the fraud in its tracks. Nonetheless, the fraudsters, operating worldwide, had looted millions within hours. More recently a new mobile app from the bank was attacked by fraudsters within days of its release, RBS was forced to pull the app and tighten security.
10.10 Kauppi says regulators are under political pressure to rein in the banks and that this can sometime lead to poor regulation. She says it us up to the banks to be more pro-active and to work together in concert with the watchdogs to avoid over-regulation.
10.00 Higgins says banks in discussions with regulators in relation to collateral obligations required to keep pace with faster, real-time payment systems. Predicting the collateral requirement can be complicated, particular when multiple holidays and weekends overlap and run together.
09.55 Lodge asks Higgins how much of the digital agenda is changing the operational environment. He talks of the banks' move into Faster Payments, and how important that has been in enabling the industry as a whole to keep pace with changing customer expectations in a digital world. Now putting billions though faster payments, but this has increased strain on back-end batch-based processing systems. At RBS, the bank has moved to release more apps and take on board social media to respond to customer demands. By next year, apps and faster payments will exceed cheques for the first time, says Higgins.
09.45 Introduced as a regulator reformed, Piia-Noora Kauppi now lobbies on behalf of Finnish banks to ensure that regulation enables rather than hinders the banking industry. Finland was the first country to reach Sepa compliance, being 100% compliant with Sepa Credit Transfers by 2011. This is put down to a concerted collaboration effort between the banks and their customers. This is continuing into the post-Sepa world, both with large corporates and SMEs also, says Kauppi.
09.20 Elsewhere on the floor, the EBA publishes its latest tranche of
research into supply chain finance. The second edition includes, among other new content, a comprehensive analysis of the Bank Payment Obligation (BPO) and an update on regulatory developments. For EBAday 2014, the EBA has published two opinion papers, one on the value of digital identity services to banks and a second one on user requirements for next generation alternative retail payments, both of which have been big talking points at the conference.
09.15 Day two begins with a strategic roundtable on 'breaking new ground in transaction banking and payments', moderated by Gareth Lodge of Celent and featuring William Higgins, director of payments, business services at RBS and Piia-Noora Kauppi of the Federation of Finnish Financial Services.
