24 January 2018
Andy Hunter

Andy Hunter

Andy Hunter - Perficiam Ltd

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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

The innovative world of UK payments

01 March 2011  |  5498 views  |  1

UK politicians often accuse the banks of failure to innovate in payments. The UK Payments Council was at least partly created and empowered to change this position but has so far failed to make its presence felt. So what's gone wrong?


Firstly, the basic premise is deeply flawed. The UK payments industry is very innovative. Over the last twenty years there has been a broadscale adoption of new payment standards such that UK cardholders can now obtain cash and pay for services in almost any location worldwide. The banking  system has been enabled for online access, transaction reporting via mobile is widely available, Faster Payments means funds move instantaneously 24x7, and new media schemes like PayPal have transformed online trading. If these successes aren't universally acknowledged, the industry needs a new PR agency.


But that's not to say there isn't room for more. I've previously commented on the banks' failure to capitalise on their Faster Payments investment by creating a homogeneous customer facing scheme. More critically, however, mobile payments is a huge opportunity to create a revenue earning service before others like the mobile telcos steal it away. Why is it taking so long?


As with Faster Payments, the problem lies with the marketing teams in the major banks. A successful scheme requires broadscale interoperability which means a critical mass of banks need to adopt a single underpinning scheme.  Getting that agreement takes vision, technical knowledge and a great deal of determination. Every bank will want a different feature, a different timetable and a different tariff structure. Few people have the drive, knowledge and energy to bring all of this together, but they do exist and banks need to find them fast.


Barely a day goes by without a card scheme, telco or specialist business announcing another mobile payments development. The banks need to make their play soon or risk ceding the market forever.



TagsPaymentsRetail banking

Comments: (1)

A Finextra member
A Finextra member | 04 March, 2011, 15:42

"The basic premise is deeply flawed..."  is it?

The broad scale adoption of new payment standards is laudable but is not innovative.

Enabling for online access is again to be appreciated but I had online access to my mobile phone bill long before I had access to my UK bank account. 

Faster payments... wasn't this merely the UK banks playing catchup to what Sweden had achieved five years earlier?

Paypal.  How is this bank led innovation?

I think there has been some genuine UK payments innovation or early adoption of an innovation... TFL's Oyster Card for example but again not bank led. 

So I think the premise is correct... there has been a lack of payments innovation from the (UK) Banks.

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I have worked in Financial Services for almost 40 years with NatWest, Royal Bank of Scotland and VocaLink. For the last 20 years I have specialised in payments and e-commerce. I now run my own consult...

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