It seems to me that there is a growing appetite across a broad range of organisations to get much more involved in the FinTech sector – clearly demonstrated by the recent creation of the UK Government’s FinTech special envoy, along with investment in the sector by a number of traditional banks. There is a genuine desire, within these financial institutions, to extend their services to deliver better value for customers. It’s vital that everyone understands the broader benefits that can be delivered to the economy by allowing this sector to grow.
Traditional banks, in my opinion, will always be important to the economy and form a significant part of the financial industry, but they will have some tough competition over the coming years. More specialised FinTech providers are entering the market every day, each time taking away a small slice of the traditional banks’ cake. Within just a few years, I expect to see the banks gradually reduced to being utilities for the societies they serve with new market entrants picking up many of the functions that are secondary to the bank’s typical core – and handling them far better than the banks are able, in this new age of digital technology and instant results.
When it comes to back-office payments, a frustratingly small amount of innovation is currently taking place regarding the underlying processes and technology involved. In the longer term we might see infrastructure such as blockchain take a significant share of the market. However, in the short to medium term the traditional banking sector still holds the cards when it comes to owning the schemes and infrastructure, which means there is little room for innovation. And that’s where the FinTech industry has stepped in to make its mark.
In my experience, the new generation of non-bank providers are particularly successful because they identify a gap or a failing in the current offering and develop a solution that is carefully and expertly designed to meet that need, underpinned by a high quality service. Because they are so focused on their one specific niche, they are able to invest time, money and expertise fully in that one offering and do it exceptionally well. When creating the Saxo Payments Banking Marketplace, we looked at the infrastructure needed to enable businesses trading globally to make immediate transfers to bank accounts worldwide, without that process incurring prohibitive fees. In contrast to international banking processes, where more time and higher cost seems to be built in at every stage, we stripped both out. We have created a solution that addressed that existing pitfall.
By mitigating the prohibitively expensive traditional banking fees – often around 5% per transaction – and cutting out the unfathomable time usually incurred for cross-border transfers, we can offer a payment solution able to meet the needs of companies of any size trading internationally. The result is that members of our Banking Marketplace can perform cross-border transfers, often instantly, irrespective of the geographical location of the recipient. And we only charge around 1%, or often less.
It’s essential for the growth of the global economy that companies trading, or looking to trade, internationally have access to a payments solution that facilitates transfers via local IBAN accounts, no matter whether they are and in separate currencies. As well as a global account infrastructure, businesses need a system that is fully secure and compliant, and which can integrate with their existing systems. Solutions such as the Saxo Payments Banking Marketplace do just this by understanding the market and bringing to that market innovation that lies outside the traditional banking model.
About Anders la Cour
Anders la Cour is Chief Executive Officer of Saxo Payments, a subsidiary of Saxo Bank. The innovative new Saxo Payments Banking Marketplace enables immediate transfers to bank accounts worldwide, empowering businesses seeking to exploit the global digital sector.
About Saxo Payments
In 2013, Saxo Bank formed a new entity, Saxo Payments A/S, with the purpose of using Saxo Bank’s core capabilities within the non-cash payments market. Saxo Payments A/S is a specialist in forex and payments. Saxo Payments is registered as a payment institution in the EU. Saxo Payments specialises in providing global payment account transactions and foreign exchange services to payment providers, including acquirers, payment service providers, FX brokers, money transfer businesses, e-wallets, and alternative payment providers.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now