My industry highlights from Fintech Connect Live 2017
Blog by Colin Swain, Global Head of Product and Operations, International Payments at Travelex
On the 6-7th December our team attended FinTech Connect Live in London and like many money conferences over the past few years all the talk centres on PSD2 and Open Banking. As an industry we can get very hooked on the regulation, the potential threats and the future opportunities. We make provocative statements such as ‘banks are now obsolete’ or that ‘tech platforms will take over financial services from now on’. We can often forget about where our customers are right now and what they are actually looking for in the future.
Like many consumers in the UK, the way I manage my finances has changed considerably in the last decade. Unlike 10 years ago; I do not consider having a primary bank account - I have four current accounts for different purposes, a multitude of credit cards (I’m a rewards-junky), my savings and mortgage are held by building societies and I have a number of e-wallet accounts for online payments and money transfer.
My behavior is not unlike the UK population as a whole. Travelex recently conducted research with 1000 UK consumers - accessible here. The research found that not only do we have far more accounts than 10 years ago but also our buying decisions have changed (particularly with under 36 year olds). Customer experience, mobile-first and speed outrank price and features for many when considering financial services.
So, obviously, we no longer have a bank for life - times have already changed and continue to change - with or without PSD2 and Open Banking.
So does this mean banks are now obsolete? Far from it in my mind. Our research indicates that we are reaching a tipping point where the number of products, services and FS businesses consumers interact with is actually becoming a burden. The sheer management of various accounts, user credentials and distributed services is a hassle. Therefore, unsurprising, a majority of consumers are looking for providers who can aggregate these products into a single marketplace and application.
So who do most UK consumers trust today to aggregate their financial products? The answer is of course banks - not tech companies and not startups.
When combining this consumer research with the market and regulatory changes under PSD2 and Open Banking, as well as the increasing speed of API and technology development - it feels like the next few years is the greatest opportunity for banks to regain their presence and leadership.
The business model will be different, banks will need to adopt a marketplace proposition to their customers, but in my mind PSD2 will be the savior of banks who embrace it and not a threat.
Let the Race to Re-bundle the Bank begin.