FS Disruptor Forum: The future of global payments and digital finance
The financial services industry is in the middle of a digital revolution, changing how consumers well as B2B clients pay for goods and services. With hungry start-ups taking market share and incumbents investing heavily in technology, how can businesses securely and effectively use digitisation to their advantage?
Tackling a range of the burning questions keeping the financial services industry awake at night, the FS Disruptor Forum brings together leading industry change agents for exclusive interactive events, panel discussions and workshops. Conceptualised and powered by Apex Group, the FS Disruptor Forum aims to catalyse positive change in the industry.
At the Forum’s latest roundtable session, attendees gained valuable insight from disruptors on how financial organisations are facing considerable challenges as the digitisation of the industry continues apace, how it is transforming finance and the global payments industry, and the attractive opportunities it presents to meet customers’ demands for new and innovative payment options.
Change is happening
Roundtable participants all agreed that new initiatives are paving the way for innovation in the financial services industry, particularly global payments, as the drive towards greater digitisation takes off.
“One thing that has been a big change for the industry is the introduction of PSD2 and Open Banking,” said Lisa Scott, Chief Marketing Officer at global payments network Banked. “There are a huge number of FinTechs that have now appeared in Europe – in different areas – managing data and payments.
With speed and efficiency of payments already disrupted by emerging technology and businesses, Lisa identified cost as the next frontier, adding: “The cost of payments is a very open topic and becoming more apparent. The Amazon/Visa discussion made that quite visible, and we see more businesses look for alternatives to make payments.”
As with much disruption in the industry, it’s a global phenomenon, with Lisa explaining: “It’s not just happening in Europe. We’re seeing a lot of real-time payment networks emerge across India, Asia, South America, and the US.”
New technologies are also having a considerable impact on financial services – such as the emergence of decentralised finance (DeFi) – and are allowing firms to think differently about distribution and reach new demographic groups, says Georges Archibald, Chief Innovation Officer & Regional Head of North America at Apex Group.
“Our clients want to position themselves in the marketplace as a leading business,” he said. “They can have the investment returns, but they need to access an evolving demographic.
“We do see sponsors and the individuals that are running funds thinking about distribution differently, and DeFi is a critical component.”
Embracing opportunities, confronting challenges
Innovation is presenting a host of exciting new opportunities for FinTechs and established financial services businesses in areas such as digitised payment methods, ‘buy now, pay later’ functionalities, and link-based payments.
“We’ve seen the adoption of ‘buy now, pay later’ as an alternative to [traditional] credit for customers and the number of players are growing,” says Banked’s Lisa Scott. “There are lots of questions and challenges about how that evolves for consumers.”
However, there will be challenges to the digital transformation of financial services, particularly when it comes to new technologies such as cryptocurrencies and DeFi.
“A lot of enterprising institutional customers are also looking at cryptocurrencies and trying to understand whether they have a role in the settlement process,” said Muneeb Shah, Head of Market Development and Strategy at financial services-focused technology provider r3.
Muneeb notes that: “One of the big challenges we face in moving to a whole new way of working is the safekeeping and custody of cash. Who do you trust? Who don’t you trust? Is it crypto-backed or central bank? What are the regulations?”
He concludes: “They are all questions that need to be considered before we can take a leap of faith.”
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