It has been a relatively quiet week in terms of announcements coming out of SIBOS 2019, an event held in London and ended yesterday. Movement towards the cloud, security, APIs, cross border, sustainability, etc. were all in play and certainly seem more incremental progress around themes of the past several years versus breakthroughs.
In this referenced piece, published through IBS Intelligence, the focus is on APIs and how they are working their way into the commercial banking space. This makes sense for a range of reasons, which we have discussed in various research releases, most recently in February 2019. Digital delivery is critical to FI success, and, as far as we are concerned, is more a market force now than regulatory pressure (PSD2 and so forth).
‘Commercial and retail banks are seeing a growing convergence as businesses are demanding the same technologies they see as private consumers, according to Volante Technologies….In an interview with IBS Intelligence at Sibos 2019, Volante’s Vinay Prabhakar, VP product marketing, said the growing interest in “cool” APIs is a growing trend across banks and ecosystems….He said banks talk to Volante about commercial payments but often end up asking about a number of aspects related to retail payments. “Open banking ultimately applies to all participants, it applies to consumers, SMEs, corporations, and they are all going to be using many of the same APIs.” ‘
One of the more obvious drivers behind this impending, growing wave is that millennials are now in their 30s, with Gen Z (an even more impatient bunch) snapping at their heals, and these folks want things done the way they want things done, which means get moving towards digital or die on the vine. Surely FIs have gotten this message, and, to date, it is more recognition than execution, which needs to flip very soon.
‘He said banks talk to Volante about commercial payments but often end up asking about a number of aspects related to retail payments. “Open banking ultimately applies to all participants, it applies to consumers, SMEs, corporations, and they are all going to be using many of the same APIs.”….. Peter McKenna, global marketing director at Volante, noted that another factor is that in a business-to-consumer world, a lot of people work ordinary jobs, outside of finance….the shift in demographics, and that the new generations, millennials and near-millennials in particular, want payments to be done in a different way. “And that’s good for all of us……This is pushing all the way through,” McKenna said. “You got this bleeding from the B2C world into the B2B world. They say ‘I want this cool stuff. I know we have a business relationship, it’s about payroll, it’s about import/export bills in Japan, but I need it to be really cool. I expect to see you serve me like I’m served by some really cool retail outlet’.”
The ‘cool’ factor mentioned in this piece is going to be the primary factor in 5+ years, which we’ll continue to track.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
