Nowadays everyone talks about the increasing importance of a consumers primary mobile device as an opportunity to acquire products, services, access the whole IoT ecosystem. How are mobile payments changing consumers` behaviour?
Ease of use and convenience have made mobile devices, and especially mobile phones, part of most consumers’ everyday experiences. For mobile payments, we need to create a similar user-experience. Security, ease of use, convenience and immediacy all need to be part of the value proposition in future. Today mobile payments enable consumers to reduce the number of payment instruments they carry around; cards, cash can be replaced by their mobile device. Major value can be introduced, however, if the mobile phone can become an interactive device that complements the payment facility with related services like electronic receipts, instant payment notifications, loyalty points or the redemption of discount coupons. The dialogue at the recent Mobey Forum member meeting in Munich also considered how other products may also enter this dynamic in the future: Electric cars with integrated fuel/energy payment functionality, for example, or refrigerators integrated with an online store that could automatically trigger the home delivery of everyday essential groceries without the consumer being physically present.
In your opinion, what does disruption in the mobile payments space stand for?
Disruption was one of the major themes in the Mobey Forum member meeting. It is commonly accepted that the changes taking place are intensely impacting financial institutions and that there is an urgent need for them to respond. It is also agreed that disruption is coming from a number of different sources. Regulation is making the market more open, but at the same time it is adding new requirements for banks. Major tech giants are now offering financial services, including payments, and finally thousands and thousands of Fintech companies are introducing new services and business models that engage consumers directly. Many banks are already transforming their operations and offerings accordingly, often through collaboration. The speed and the breadth of the changes means that every bank now needs to be capable of continuously repositioning itself in the market.
What are some of the top hurdles thwarting digital bank innovation? Do you see those obstacles being eliminated anytime soon?
Innovation itself is not the challenge as banks are definitely the experts in their own line of business; most have already realized the need for innovation and collaboration with others.
Major hurdles are typically the organizational structure (heavy and multi-layered) and a lack of agile implementation. Having slow decision making processes and legacy core banking systems which are not sufficiently flexible to support quick deployments makes the introduction of innovative services difficult or at least slow.
In Part 2 you will discover whether the disruption and innovation caused by fintechs is really such a bad thing and how regulation is protecting consumers.
About Edgar Salib
Edgar Salib is Head of Financial Institutions Division for G&D Mobile Security at Giesecke & Devrient Systems. Prior to joining G&D, Mr. Salib moved progressively through senior positions, including Vice-President, Finance at Quebecor’s B.A. Banknote, where he played a key role facilitating the acquisition of the company by G&D and leading its smooth transition to a G&D global subsidiary, known as BA International. Mr. Salib holds an MSc. Economics from the University of Paris, and an undergraduate degree in Finance and a post-graduate degree in Accounting from the University of Quebec.
About Giesecke & Devrient
Giesecke & Devrient is an international technology provider. The company develops, produces, and markets products and solutions for payment, secure communication, and identity management. G&D maintains a competitive and technological position in these markets. The group’s clients most notably include central banks and commercial banks, wireless communications providers, businesses, governments, and public bodies.
About Mobey Forum
Mobey Forum is a global industry association empowering banks and other financial institutions to lead in the future of mobile financial services.
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