Greater operational efficiency and risk management of payment systems has become a rising priority for banks in the current depressed business climate, according to research conducted by KPMG.
KPMG interviewed 25 senior representatives of industry regulators, major banks, and financial technology companies for the research, which also notes that payments remains a revenue-generating business for banks as volumes continue to grow worldwide.
Mitch Siegel, director of payment advisory services in KPMG's financial services practice, comments: "Cost pressures due to the current economic environment are causing banks to focus investment on projects that will improve efficiency and reduce costs -- while concurrently addressing risk management issues -- in the short- to medium-term at the expense of long-term product innovation and infrastructure standardisation."
With systemic risk issues paramount, executives interviewed by KPMG say that investment in security services such as common identity management and two-factor authentication will increase.
Siegel notes that products such as mobile payments and international remittances require investment in infrastructure and in many countries these projects may have a slow payback and thus will proceed at a slower pace.
"But for banks with a presence in emerging and high-growth markets where mobile phones outnumber fixed lines and the penetration of banking services is low, both of these products are strategically important and banks from these regions may seek to export their knowledge and systems to more developed markets," he adds.
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