The final sessions in Copenhagen were held against a backdrop of some confusion, following the global ransomware incident that had hit the headlines 24 hours earlier. Google had also been in the news and we learned that Facebook is one fifth of the planet’s favourite application. The world had already been disrupted.
So how are banks reacting to the emerging new paradigm? In a panel that looked at some of the new developments in transaction banking, there was no clear direction.
Joy McKnight of The Banker hosted the panel, opening with the now well-acknowledged challenge facing transaction banks: shrinking margins, regulatory costs and the rise of fintechs. The audience saw B2B cross-border payments and APIs as the catalysts for disruption in the coming years.
While the banks talked about the “journey” they need to make, there was little clarity around the shape of that journey. That said, there was recognition that banks are starting to realise their world is changing and that the top transaction banks will have an important role to play.
If cross-border payments do represent the big battle ground of the future, then it might be because they account for 20% of all activity. But they also carry greater risks. There is an urgent need to get to know customers better and to harness artificial intelligence to make better decisions in a more timely fashion.
Cross-border payments and Know Your Customer processes may benefit from distributed ledger technology (DLT) in the future. Indeed, in a session on DLT, the audience felt that both areas represented the biggest opportunities for this technology.
Overall, Money20/20 Europe had a distinctly collaborative atmosphere about it this year. There is broad acceptance that banks and fintechs are keen to work together. They are, however, still trying to find a happy and smooth co-existence. But they’re getting there and in 2018, in Amsterdam, I am sure we will see even more examples of banks and fintechs coming together to create new, dynamic solutions.