Insights from EBAday 2017

It’s fair to say that Dublin in the June sunshine was out to impress the financial world attending the European Banking Association’s 12th annual congress.

Dublin, founded by the Vikings during the 8th and 9th centuries, retains its rich trading heritage with deeply held links into the European and global economies – something that Paul Ryan, the Director for International Finance at the Irish Department of Finance stressed during his keynote speech.

Key themes from sessions were:

• Banking’s place in society and the associated value chains which are rapidly evolving
• The current “normal” of ubiquitous Debit and Credit cards in one region, such as Europe, is already history for others
• Collaboration – the competitive landscape is changing rapidly and competitors are becoming both partners and threats
• The increasing importance of digital ecosystems and supporting technologies such as APIs will continue to drive the pace of change.
• Solving digital identity was a recurring theme throughout the conference, with the ability to resolve (as the Nordics and others are attempting) having wider implications such as simplifying KYC processes and enabling PSD2 open banking security controls to emerge.

The conference Challenge Speech posed the question “what is value, or of value?” The speaker posited that the level of disruption seen to date driven out of the West is nothing compared to what may be coming from the East in years to come. The question of whether “Cash”, “Tokens” or even “Data” has value in the coming years is an interesting philosophical point.

A changing landscape

In terms of being able to utilise goods and services as consumers we are already seeing some “free” services provided within existing platforms and ecosystems. This data which provides insights into consumer behaviours is often viewed as more valuable to the provider than the actual fees a consumer may be charged. If this is extrapolated with some exponential “what if” we can see that both regulation and culture will need to adapt rapidly. What happens if, in the future, a country the size of China moves their entire economy onto a digital currency? What are the challenges and opportunities let alone the cultural implications? Yet, how far away is this scenario from today?

EBAday’s panel of experts on PSD2 included perspectives about how banks and other providers will converge on “the” platform over time. Google Android and Apple IOS were cited as examples having seen Microsoft and others fall behind in mobile phones. How long will it be before a simple cross institutional banking SDK and open set of APIs emerges? The point the panel stressed in different ways was that PSD2 is not the destination; it’s merely the start of the journey with equal opportunities and threats, dead ends and new avenues.

Icon’s Head of Payments, Tom Hay, provided his insightful experience on Instant Payments and the related Infrastructure Implications.

For those that missed the perceptive Ovum Research report into “Instant payments and the Post PSD2 landscape” you can still obtain a copy from here. The report covers the impact of both PSD2 and instant payments on cards and helps to cement understanding with hard facts on the post PSD2 landscape.