Several themes from 2015 will continue trending this year. Mobile payments will keep being one of them. Large players like Apple and Samsung have expanded their geographical presence with their wallet products, as have Visa and MasterCard with their digitization services. Now it is easier than ever to either roll out your own, or join a branded mobile payment wallet – explains Maris Ozolins, Head of Card Suite, Tieto, Financial services
Another trend that we will see throughout the year is the growth in interest for Instant Payments
solutions in several continents. In the EU, for example, the regulators are driving the adoption of account based payments, there are already several countries which have implemented them on a national level. More countries will follow, as instant movement and availability of funds has several benefits:
- costs reduction associated with clearing
- promotion of digital commerce
- with initiatives like PSD2,opening up new business opportunities.
Tieto has recently completed an instant payments project in Africa in one of the most developed and progressive country, and sees similar interest from number of other countries in different regions. This shows, that Instant Payments is a global trend. Blockchain will still be on peoples’ minds this year, however it will finally see the first signs of real life commercial applications of the technology. The discussion will move from theoretical capabilities to more practical use-cases, based on the first successful examples.
Then there is the push for digitization, particularly on the customer interface. To focus on the end-user is not only to provide the most convenient and modern interaction channel, but also to provide additional value that comes from intimately knowing your customer. Gathering and being able to interpret “big data” is becoming increasingly more important.
Finally, there will start to be more collaboration between banks and FinTechs, and that will have many shapes. So called “unbundling” of banks – dismantling key banking services and being able to offer them stand-alone and often cheaper solutions – delivered by FinTech partnerships or acquisitions. This will force many financial institutions to re-evaluate and re-invent their existing channel strategies, product strategies and market segments.
With Wallets really beginning to gain traction what advice can you give to issuers surrounding HCE and contactless?
The choice of mobile payments options for issuers now is better than ever. There are vendor solutions, like Tieto Cloud Based Payments, then there are digitization services schemes and mobile wallet products from large digital giants like Apple, Samsung or Google. It can also be confusing to choose the right business model and technology.
Unfortunately there is no “silver bullet” strategy here that would fit all issuers. It’s a complex combination of factors like acquiring infrastructure readiness, consumer habits and preferences, mobile device models and penetration levels, availability of ApplePay, SamsungPay and others in your region. All elements need to be considered.
If you decide to create your own mobile payment solution, however, it is worth mentioning one other very important aspect to consider. Do not make it about the payment functionality. Payment is just a commodity, today it adds little value, it has to be there, it has to be secure, it has to be convenient, and it has to work all the time. That is expected, and that is probably already available from most of your competitors.
Instead you have to build the product around your end customer; he has to be the star. Think hard about where and how your customers will use it. Model different everyday scenarios- where does the user go, what does he do, where does he eat, how does he travel, whom does he meet? Your customer does not think about it, but you must clearly identify how many times and where the payment action occurs in his life. If you give him this new payment instrument – will he be able to use it there? Is there a motivation for him to use this new payments instrument? Can you provide additional value in that process – like loyalty discounts, instant credit, relevant advertising?
How can banks manage to maintain existing platforms while rolling out Omni-Channel strategies?
Omni-Channel has become a very strong buzzword first mentioned in the US. Eventually, Omni-Channel will become pervasive. Why? Because, first of all, end-users prefer an easy and fast approach – the shortest approach to solve their problems. And nowadays, the most convenient, trendy and fastest way, is to use the mobile phone. Secondly, it is very expensive for banks to maintain and to support several channels.
Omni-Channel strategy banking can be defined as customers utilizing all banking channels simultaneously, with bankers utilizing an Omni-Channel approach to track customers across all channels, like bank branches, bank’s web page, mobile applications, social network channels etc.
At the moment, banks are operating using a cross-channel approach, which is first step to Omni-Channel. The final step to achieve that is to agglomerate all data in a manner that all cross-channels are synchronized and accessed through no matter which channel at any time – either it’s a mobile application or face-to-face meeting at the bank’s branch.
Digitisation for banks is a key area of concern right now. Where do you see the pain points for them and how can they be avoided?
Digitisation is inevitable. Large banks are already acquiring FinTech companies that are developing additional systems for them. It is a good symbiosis, rather than competition, between those entities. FinTechs, as newcomers with less experience in payments, are high-tech-developed and very flexible for all the changes, but getting the experience from banks. Meanwhile banks as stable and extremely experienced organizations
The post What are the key trends in payments for 2016: Tieto Interview appeared first on Payments Cards & Mobile.
