Payments professionals from across Europe are gathering in Berlin this week for EBAday, hosted by the Euro Banking Association and Finextra. We're liveblogging events here.
That's it for another year but we'll be back for EBAday 2014, this time in Helsinki.16:30:
Brennan says nobody would be here if they had all the answers, people are looking for information and opinions. There's been a strong desire to learn and to collaborate on a wide range of subjects.
Nymphius concurs, says especially true that opinion are evolving and being formulated in new areas such as mobile.
Westerhaus thinks banks need more integrated thinking, more thought leadership in order to have a stronger voice on things like regulation.16:22:
After a fancy video summary of the last two days, Santamaría reflects on Dixon's opening keynote and the theme he articulated and resonated through the entire conference: how banks have to react to a world changing radically and quickly.
Big changes needed to achieve a borderless payments world; we need to deal with the fragmentation between corporate and consumer and the IT and the business guys.15:58:
We're in the home stretch, wrapping up with a moderators panel with EBA Chairman Hansjörg Nymphius, Bank of Ireland's Vincent Brennan, the EPC's Javier Santamaría, and Deutsche Bank's Christian Westerhaus.15:40:
Meanwhile, my colleague Liz has been tweeting from the liquidity panel:
She's also sent me this summary:"Monie Lindsay, Managing Director, TSI: We did a some research on the size of the global payments & liquidity industry. We estimate that it is worth US$1.8 trillion. Banks handle around 10/15% of that. Banks need to grow that.
Russ Waterhouse, Executive Vice President, The Clearing House: There is no visible regulatory push in the US for ISO 20022. But the Fed, Nacha and X9 are looking at it. There are unintended consequences of intra-day liquidity. It can slow down payments, which isn't what we are trying to do
The liquidity panel discussed started off by saying that the treasury function at corporates have become more strategically important, recently. The panel also discussed the un-intended consequences of regulations. Regulators sometimes don't realise how complicated payments are. The panel also debated the use of ISO 20022 and wondered by we weren't matching the data fields in the 'cloud.' "Why are we doing this the old fashioned way" Russ Waterhouse"15:37:
Great rant from Oakes: My son doesn't differentiate between a Facebook Credit and what he uses to buy on Amazon. He has no idea what an ATM card is for, would never go into a bank branch, asked what the hell is a cheque.
Why do we give kids a chequebook when they open an account, why not give them a QR code with all their details on it? Son pays for lunch at school by scanning fingerprint so why do banks want to make him carry a physical card and remember a number? Banks make things too complicated, lag behind other industries.15:30:
So who's right?
Why is there more innovation in the developing world? Chaplin says regulation holds us back in Europe. Also, in Africa there's a bigger incentive - go with mobile so you don't need to build branch networks.
He also shares Oakes' scepticism about many new alternatives in the West, thinks lots are just "solutions looking for problems".
Norton: It's actually in the boring backend stuff that real innovation is possible and that's where banks rule. It's about letting people move money 24/7 quickly.15:14:
There are hundreds of options out there, from MyBank to PayPal to UKash to bitcoin, all offering very different things. In short the market is incredibly fragmented so where do we see things going.
Chaplin asks what is an 'alternative' payment option. It's different for a card scheme than an ACH. Alternative should be defined by the user. The mountain bike
wasn't invented by a company but by bikers.
Norton is being very unfashionable and sticking up for banks. Says the view that banks don't get payments and that's why new players will come to dominate is rubbish. There's a reason banks still dominate and most alternatives (except PayPal) fall by the wayside.
Bechis brings up BNP Paribas' new mobile Hello! Bank. One of its selling points is how easy it will be to access and carry out transactions. Payments should be as simple to use as possible. The champions of innovation will be those that have good usability, a wide reach and trust. This puts banks and telcos in a strong position.
Oakes says that the regs and risks involved means she only sees alternative payments in retail terms. She thinks banks we're slow to catch onto the Web's potential. They are catching up now, eg. MyBank, iDeal. Thinks that non-banks, especially those targeting merchants might find it difficult to bring in revenues.14:50:
It's time for 'electronic alternative payments - who is
driving change?' On the panel we have Ugo Bechis from UBI Banca-Banche Popolari Unite Group, John Chaplin from Global Payments Innovation Jury, Jerry Norton from CGI, and Liz Oakes from KPMG. Bank of Ireland's Vincent Brennan moderates.14:36:
Marcus Sehr from Deutsche Bank and RBS's Kevin Brown spoke to Finextra earlier about the future of payments and what keeps them both awake at night.14:30:
Santamaría asks audience which of three scenarios we will see in Feb. Not one person thinks everything will go perfectly, a few think there will be a disaster and the majority think it will be somewhere inbetween.14:22:
Stockinger says that the clients who are most advanced in preparations are those that are preparing for Sepa as part of a bigger IT overhaul project so budget isn't an issue.
Santamaría says ECB research shows that corporates need a dedicated team headed up by a full time Sepa project manager.
Q from the floor: what are banks going to do if customers simply don't migrate, what will they do with these payments? Santamaría points out that this is not optional, there is no plan b. PSPs will be obliged to refuse processing. That doesn't really answer the question, of course...Stockinger says banks have been banging on about Sepa to clients for months now so everyone should know its coming.14:04:
Alstom's Cuevas gives us the corporate perspective: Alstom operates in 25 countries, 12 in the eurozone so it requires central coordination but also local work.
On the risks, he highlights the importance of banks making sure that they available for testing. Another issue is working out which parts of the business foots the bill.13:50:
Stockinger says that corporates that are not ready for Sepa yet need to call their bank - they'll get a lot of stuff for free. But, if firms have left it this late, they need to 'de-scope': stick to SCT and open invoice and stick to one bank.
Kam is confident that we'll get there on SCT but SDD is far trickier. They key difficulty for corporates is that the Sepa scheme is so different to the national ones. Post Feb 2014 is now more interesting to Kam. He thinks Sepa will improve reconciliation, letting corporates centralise accounts receivables. Kam is more optimistic than some earlier speakers about Sepa and innovation: it will improve usability. 13:34:
Back from lunch and it's time for the 'fast track to Sepa readiness' panel. José-Carlos Cuevas from Alstom, Tino Kam from RBS, Gian Bruno Mazzi from SIA, and Wolfgang Stockinger from Deutsche Bank join moderator Javier Santamaría, chairman, of the European Payments Council.12:18:
If NFC is problematic, what about the alternative of in-store m-commerce?
The concept will work but that doesn't mean NFC is dead. What matters ultimately is what the customer cares about and that's user experience and price.12:04:
The next question is: does the rise of mobile spell the end for the card?
Nordlund says that one reason NFC hasn't taken off is the chip, which is an 80s technology. The secure element factor hurts interoperability. But we're now seeing security via software, which will change the game, removing barriers.
I think Jonathan's tweet sums up the mood:11:51:
Apologies for radio silence (I know you love to hear about our WiFi woes...)
Anyway, we're onto the buzzy world of mobile payments and 'staying tuned to shifting demands'. Here's what's happened so far:
On the panel is Davide Girompini, payments and transaction services global leader, IBM, Sirpa Nordlund, executive director, Mobey Forum, Marco Polissi, head of product development, financial institutions, SIA, and Hubertus von Poser, partner, PPI. Peter Jones, MD, PSE Consulting is moderating.
Is m-payments just a niche product in the near-term with a lot of hype?
Nordlund asks would you say the same if we were just talking about payments? Of course not. Mobile payments will grow as payments grow. There is a generation growing up with mobiles. They will definitely want to manage their finances through their handsets. But maybe not with a bank.
Von Poser accepts that mobile payments will be a big deal eventually but it's mainly hype at the moment. He agrees with Dixon's point yesterday that payments is just means to an end. It's the mobile lifestyle which is important.
Girompini takes up the theme of the mobile life - it incorporates transport, shopping etc and will require different options (NFC, SMS etc).
Polissi agrees that m-payments is more hype than substance at the moment and blames the fragmentation of the market. Too many players from too many industries trying to compete. We're back to the theme of collaboration.
In response to audience q, Girompini makes the point that 'mobile' is not the device, it's the freedom. You can't link your payment service to the handset.10:50:
Dowson asks about innovation and collaboration in getting rid of cheques. Furthmayr says that he was hearing about the death of cheques when he was at business school 'centuries' ago. Egner notes that although volumes are falling, value is still rising.
Germans love cash so what's the point of bringing in a cashless alternative? It's a risk to test. So maybe let non-banks take lead and then partner at a later stage if successful.10:42:
We're talking about the issues that came with the Commerzbank - Dresdner merger. Even though it was a fairly smooth process, a downside was that it cost two years in Sepa prep. Also, Dresdner outsourced payments, Commerzbank did not so that was a big post-merger project. It can be tempting to outsource these things but you have to remember you have retail customers to keep happy.
On a 'faster payments' system for Europe - not any great demand in Germany yet but see it coming. 10:30:
Egner is now speaking about standards, which are, of course, vital in creating the 'borderless' world which is the event's theme. Sepa is not just about the product, you have to see it as a standard as well. We as banks need to understand standards - we haven't done it so well in past.
On collaboration and sourcing - we need to move beyond interbanking to 'intereconomical' partnerships. Banks may be dinosaurs in the brave new world but have an advantage of having the clearing infrastructure so should use this to work with non-banks.
On innovation, Egner agrees with yesterday's consensus that its difficult to define but banks aren't great at it. It used to be easier to get things done. Now you have to jump through hoops.
Remember discussion with SAP about Sepa being just one of many projects competing for resources - in some banks it lost the battle.10:18:
Furthmayr begins by making the case for correspondent banking (his bit of the business), which was effectively declared dead by some speakers yesterday. Need to change/adapt though.
His bank's core market is still Europe but not much growth at moment. Once Sepa established have to find way of making up for the loss of revenue it brings. Latin America big potential.
Payments are the oil (grease) which makes the global economy work but banks face challenges from new players and the declining trust that people have in them. So banks need to collaborate to reestablish this.
He also asks the age-old question: Why do we support cheque business when it costs so much (KYC etc.)? We need to completely rethink how we do it.09:50:
We're back for another packed day. First up are Ashley Dowson from the Sepa Consultancy and Thomas Egner and Reinhard Furthmayr from Commerzbank discussing 'payments and transaction banking: seizing new opportunities'.
You can catch up on yesterday's events here.