North America banks face difficulties in keeping up with evolutionary speed in payments.
Technological innovation transforms commercial payments throughout North America, which greatly affects the main financial institutions in the United States and Canada. Celent, a Fintech research and advice company and part of Globaldata Data Analysis, participated in a report on this topic in SIBOS on Tuesday, with some unexpected conclusions.
The survey, which was conducted during the summer with the majority of the 20 largest banks in the United States and Canada, revealed that there is no single bank that excels in all areas of payments. Moreover, the definition of “the best” varies depending on the customer and context. What appeared more important than trying to do “everything” in payments was the focus on what matters to customers.
The pace and the expansion of the change in the area of payments is so severe that some banks described themselves as “drowning in change.” However, this environment also provides great opportunities. As the author of the report confirms, what matters most is not the size of the bank, but its position. Smaller banks, in particular, often outperform their larger counterparts because they are simply because they are more willing to embrace change.
Each bank has informed the survey about a unique approach for payments, as differentiation has become a major competitive factor. Many respondents have indicated that only the largest banks have resources – both human and financial – to innovate on a large scale. However, even deep pockets do not guarantee success.
Cement analysts argue that banks must distinguish between payment or risk offers that are irreversibly backward. The desire to change exceeds the available budgets – the excitement stems from the mentality more than money. The unified goal that focuses on the customer should pay all the decisions in the field of payments.
In practice, this led some institutions to move from building products first and market them later, to start customer and industry research and then design solutions to meet these needs. This represents a major transformation in product management, and the customer places in the center of the innovation process. The goal is not only to become a service provider, but a partner and a consultant – delivers the best for the customer, not only for the bank.
Looking forward, while major changes are expected in areas such as CBDCS, Stablecoins, ACH and payment infrastructure, definition scanning and risk management as a maximum priority for 43 % of banks included in the survey. Followed by 29 % focuses on improving processes and transforming the processing infrastructure. In addition, about 50 % of banks expect the full system to be replaced in areas such as payment centers, border payments, payment, and financial crime prevention.
