Women in Payments debate the impact of the NPA

29 January 2019

Last week I attended a Women in Payments event entitled, ‘New Payments Architecture – What can we expect and how will we get there?’ The event was hosted by AmazonPay in London and was held to discuss the impact the NPA will have on the UK market, both from a service providers point of view as well as the end users. The event was moderated by Sarah Hollinshead, Editor of Global Banker, who was joined by panellists Christine Ashton, Independent Non-Executive Director and Chair of NPA at Pay.UK, Kate Frankish, IT Director, Retail Payments, CIO – CPII, Retail Segments and Open Banking at Barclays and Gordon McKenzie, Director, Consulting at Deloitte.

Peeling the onion

There was a great turn out at the event, and we got straight into business, kicking off by discussing that the aim of Pay.uk is to create a New Payments Architecture that will combine Faster Payments and BACS to create a more resilient, safer and faster payments architecture. Alongside this change CHAPS and RTGS will also move to the ISO20022 standard aligning the UK payments infrastructure to other new payment systems around the world. Christine from Pay.UK compared the NPA to an onion, strange analogy I know, but a clever comparison nonetheless. The ‘onion layer’ approach to architecture allowed for the outer layer to be the customer interaction and engagement with the deeper layers, the tighter the control gets in terms of restrictions. Only some organisations can access all layers of the architecture, which prompts the question of ‘how can we create an API like culture for these deeper layers?’ – which is something Pay.UK is working on answering.

The future of payments

The panel moved on to talk about the commoditisation of payments – they are part of everyday life and integral to the way we live. In recent years an inclusivity has developed that wasn’t as apparent before – everyone has access to payments now, and to money. The wider society is included and supported by banks, companies and peers in every day payment processes. However, due to more people than ever before having this access, there is now a need for payments to carry more information in order to make these payments more secure. Christine voiced that Pay.UK are committed to increasing the resiliency, security and safety of payments. Pay.UK also intend on leveraging the latest tech in order to make the NPA more evergreen going forward, which will mean a project of this size shouldn’t be required until another major revolution happens in the payments industry.

The value of overlay services

Kate, IT Director at Barclays, touched on the overlay services that are becoming available with the advancements in technology and those that will be developed on top of the NPA. Kate mentioned security and discussed overlay services such as ‘Confirmation of Payee’ and ‘Request to Pay.’ These overlay services demand for more checks to be done in the background by the bank in order to give customers more certainty and security when making and receiving payments. This led on to a discussion around the Strong Customer Authentication that is coming in with PSD2 and how it is important for banks to work out a balance to ensure the best journey possible for their customers.

‘Customer is King’

There was a lively discussion on the attitude of millennials and how things have changed in the banking sector (and beyond) as the years have gone by. In the past, individuals didn’t move thier bank accounts, they stuck with the same bank for years and there was a sense of loyalty between bank and customer. Now, millennials will get up and move without a second thought if they feel their bank isn’t serving their needs. So how do banks instil this sense of loyalty in the younger generations to keep their customers in this intensely competitive market? Kate believed that it was down to meeting the needs of her customers and ensuring that they were at the heart of every decision.

Facing the disruptors

With the sheer number of new market entrants and the growing competition in the financial services industry, of course we discussed disruptors and fintechs and whether open APIs are a concern for banks. The panel were also asked if they see these new age fintechs as a threat to the traditional, incumbent banks, especially with the fact that millennials have more trust in amazon than they do in their bank! Kate (Barclays) said she didn’t see these new disruptors as a threat as such, however, did admit that traditional banks may have to review what they do for their customers going forward in order to stay competitive. She said that banks will need to be aware of competition and adapt to meet the needs of their customers.

The panel discussed the future for banks, Christine, Independent Non-Executive Director and Chair of NPA at Pay.UK, suggested that we will invent uses for payments that we have never thought of before and we will wonder how we ever did without those new uses. For example, using your bank to tell you when there’s no milk in the fridge or paying for your car insurance a day at a time – only when you need it. We may see the scope of banks start to broaden.

The impact on skills

The changing needs of the banking industry, the changes in APIs, Open Banking and exposing data externally is not only changing the way we do payments, but it is creating a shift in the types of skills banks need – skills that banks haven’t needed so much in the past. In this sense, the changing payments landscape will create an even wider variety of jobs that we may not even be able to anticipate now. With eight big payment schemes coming into play or changing in the coming few years (that we know of so far) – the possibilities in the world of payments are endless. BACS could become real-time and we could be paid daily instead of monthly – who knows? The rails will be switching in 2021/22, so I guess we will have to wait and see.


Kate Nelson