Finextra attended the Citi Digital Money Symposium, which brought together experts from all over the industry to discuss innovation and emerging trends across the online payments sector in 2023. The conference looked at the challenges that could arise as the payments ecosystem becomes increasingly digital.
Can the payments systems of today meet customer needs?
In a conversation with global head of treasury and trade solutions at Citi, Shahmir Khaliq during a session titled ’Are Payment Systems Fit for the Digital Economy’, COO of Citi Catherine Martin questioned him on emerging digital payments models in the industry.
Khaliq observed how the Covid-19 pandemic acted as a great accelerator for change in the payments industry, and now customers demand more of their payments systems, which in turn, banks are looking to deliver in the most efficient manner.
He touched on how e-commerce systems are allowing large financial institutions to help customers in a variety of ways. He gave an example of how Citi is working to help their US users with their healthcare insurance, and are looking for new ways to facilitate the process, but it is becoming more than just payments industry focused issue:
“There is a significant push by governments to make these changes. Think about instant payment networks and the changes that are happening; it's not just banks or Citi trying to make the switch. It's also governments trying to project change through the regulatory interest and infrastructure changes to allow for instant payments to happen, to allow for later cutoff times for liquidity to be held so that high volume, low value transaction flow can happen across the industry. Looking to get that seamless global connectivity is what is on everyone’s mind.”
How can traditional finance be reinvented?
In the fireside chat, ‘Reinventing Finance’, industry leaders Antony Jenkins, CEO and founder at 10xBanking and Jonathan Larsen, chief innovation officer, chairman, and CEO at Ping An Group/Ping An Global Voyager Fund explored how finance has evolved in recent years.
Jenkins and Larsen, both Citi alumni, did not hold back on their perception of how fintech and technology firms are developing with the revolutionary technology that they wish that they had while working at incumbents.
Larsen commented that overvalued fintechs that have direct connections to the consumer often have a low profit model, that is inevitably unsuccessful due to lack of profit. To build a scalable business, big banks need to make significant infrastructure changes. However, as legacy vendors operate on-premise solutions, they have little incentive to reinvent themselves and become digital natives.
“There is just too much status quo interest in leaving it exactly as it is for them to be innovators. I’m sure there will be an opportunity to innovate, but I always think that it is not as a fintech but as a technology company,” Larsen said.
Commenting on the differences of working in a major bank compared to at a fintech, Jenkins stated: “The one thing that we learn during this work is that doing something radically different always takes longer, is hard work and cost more money than you think it's going to. Yet, you have to be prepared to push through because once you get to the other side of it, then you've basically reinvented the future. It is a radical step, acquired by the industry to push them to get to the point where you get real benefits and that's exactly where we are now.”
On next steps for incumbents, Jenkins highlighted that the business model needs to be drastically transformed. Data needs to be prioritised and handled more efficiently, and modern technology needs to be embraced to solve real business problems such as lowering costs and enhancingconsumer experience.
What is next in payments innovation?
In the panel, ‘Payment Innovations & e-Commerce for the Next Decade’ e-commerce experts Samina Hussain-Letch, UK head of Square, and Lynne Lagan, head of consumer card products at Clearpay discussed how online payments are revolutionising the space.
Hussain-Letch and Lagan expanded on the collaboration between Clearpay and Square to provide an easily accessible online platform for customers to access retail products.
On what the future of digital payments looks like, Hussain-Letch stated that the consumers will be at the heart of the experience and businesses will be providing more and more tools to make e-commerce more accessible. On a closing note, she added on data: “We are seeing this continued innovation around data, the decentralisation of data, and the consumers being in control of that. I think we are only at the beginning of even imagining what the next generation of retail experiences is going to look like.
Lagan talked about enhancing the shopping experience for consumers, and creating a mode for people to budget and cater to their needs by bringing various financial tools together and integrating multiple platforms so that consumers get the best of what they want.
“It’s important to us for merchants to provide that frictionless experience to their customers, because, if you have a bad experience when you're buying something, you think about it from a merchant perspective, generally more than how you paid for it. It's important that those brands serve each other and to get the best outcome for everyone in there for their business and their growth, and for the customer to get what they want out of it. When you do both of those things, you drive engagement with the ecosystem and the platform on both sides."