Payments professionals from across Europe are gathering in Helsinki this week for EBAday, hosted by the Euro Banking Association and Finextra. We're liveblogging events here.
17.15 And on that note, I'm off to the end-of-day drinks receptions. We'll be back with a full day of debate and discussion tomorrow.
17.10 Stockinger: Sepa has been about disruptive innovation forced by the regulators. Perhaps we need the regulators to step in again to ensure critical mass for customer innovation.
17.00 Van Dijk recounts the experience of one domestic corporate customer who fielded 30,000 calls on one day because payments were four hours late. What this says to me is that we need to move to real-time, she says. We need to start working on Saturdays. We need to open up all hours and provide full settlement. Because if we don't, customers will look elsewhere for their payment needs.
16.45 What is Sepa 2.0 asks Chaplin. It means less is more, says DB's Stockinger. More standardised and better services across the euro zone. Steinbach looks further ahead to Sepa 3.0 or 4.0 and disintermediation fears for banks. It's about fixing current issues and moving on to deal with competition. Van Dijk fears a fragmented market may develop as local solutions are developed,running contrary to the original Sepa vision. If we take another ten years to get to Sepa 3.0 we may already be too late to meet the competition, she says. BNP Paribas' Poletto takes the corporate perspective, saying clients are already asking for XML formats with full value-added remittance and reporting functionality. E-mandates are also on the table. alongside simplified and centralised collection of credits.
16.25 Sepa 1.0 is barely upon us and we're already looking ahead to Sepa 2.0 and ways to phase out legacy systems and niche schemes. In the chair is John Chaplin of the Global Payments Innovation Jury. He's joined by Luca Poletto from BNP Paribas, Equens CEO Michael Steinbach, Wolfgang Stockinger from Deutsche Bank, and Inge van Dijk of ING.
16.15 More innovation news from Finextra:
Amex partners with Uber.
Branson joins TransferWise funding round.
16.00 Congrats to Vincent Brennan for expertly chairing a panel that managed to pack in some interesting discussions in just 45 minutes. For those of you who missed it first time around, the Finextra TV team caught up with Vincent before the show. You can view the video
here.
15.50 Banks top priorities are system stability, security and regulation. There's not much room in there to handle innovation, suggests Brennan. Vanini believes banks should be more pro-active, pointing to regulations that, in general, are intended to encourage banks to be more customer-friendly. If consumer needs were already being met by banks, via innovation in some ways, the regulatory burden might ultimately become less onerous.
15.45 Should banks be looking to embrace non-traditional players that have stolen a march in payments, asks Brennan. Verbeek believes banks have no choice but to collaborate as payments becomes more invisible in the transaction. How payments are moved from my bank account is of no interest to me, he says. Travers-Clarke points to how the music industry has learned to work with new services such as Spotify and iTunes to create new opportunities for the industry. The banks can learn from these experiences.
15.35 If alternative payments are really an opportunity for banks, why is that newcomers seem to be making all the running asks Brennan. Travers-Clarke suggests that new entrants such as PayPal major on removing friction from the front-end consumer experience. Alfing notes how much re-engineering went into plastic cards to make them work online in terms of protocols like 3-D Secure. Believes this was a missed opportunity for banks to develop new solutions and new ideas.
15.20 Brennan introduces himself as one of many 'cavemen' bankers at EBAday, in a barbed reference back to this morning's challenge session from BoldRocket's Andrew Tarver. Asks the panel why is it that alternative players are leading the way. Fiserv's Travers-Clarke points out that new players are still actually using the banking industry's rails to provide alternatives. So there may be as much opportunity as risk to the banking industry. Paul Afling says banks can provide new services suvh as electronic ID, interoperable cross-border payments and mobile payments. Luca Vanini suggests that in 10 years most payments will be seen as alternative payments as more business shifts to the Internet. Banks risk missing out on this due to an obsession with interbank payments.
15.15 Coffee consumed and time to ask: Will alternative payments dominate e-commerce by 2020? In the company of Bank of Ireland's Vincent Brennan, Paul Alfing from Ecommerce Europe, Travers Clarke-Walker, Fiserv, Luca Vanini of Unicredit, and Eernst Verbeek of Trionis (the new name for the interbank processing network formerly known as Eufiserv).
14.50 14.50: Coffee queen Paula is doing a brisk trade at the Nordea Business Garden. Paula first appeared in a drawing on Paulig's coffee jars in 1904, before giving way to a live representation in 1950. Here's the current incarnation (hint, she's the one wearing the dress in the background):
14.45 Here's an alternative take from the audience:
14.35 The Bank of Finland's Kemppainen notes that 90% of payments infrastructure is actually buried below the surface at the user end in corporations and merchant systems. Payments is no longer a technology problem, he suggests, but a user-experience issue. Ruttenberg accepts that in the past the regulators have focussed too much on network issues, rather than listening to the needs of end-users. Refers to the recently-established
Euro Retail Payments Board as an attempt to rectify this deficiency.
14.20 Worldline's Wolf Kunisch asks whether the banks who drive the payments industry need to forge technical alliances or a common set of rules. Sepa is almost there, but at the consumer end there are different ways of accessing payment channels in different countries, all of which have clear value to the consumers and merchants using them. This is the new frontier, he says, to develop common consumer-facing standards that work right across the euro-zone. .
14.15 Wiebe Ruttenberg of the ECB gives the central banker's perspective. Refers to the bank bashing session by Andrew Tarver this morning. New approach to interchange regulation could be a big kick-starter for innovation in banking, he believes, but there is still plenty to do in achieving Sepa migration deadlines and dismantling legacy payments infrastructures.
14.00 Time to settle in for the afternoon sessions. I'm in Stream 2 for a post-Sepa panel session, looking toward an integrated market for card, mobile and Internet payments. Taking the stage we have Professor Jurgen Bott of Kaiserslauten University, Karl Kemppainen from the Bank of Finland, Wolf Kunisch of Worldline, the European Central Bank's Wiebe Ruttenberg, and Salvatore Borgese from Istituto Centrale delle Branche Popolari Italiane.
13.30 The conversation continues on the exhibition floor.
12.30 Plenty of food for thought, but now it's time for the real thing. We'll be back after the lunch break.
12.20 With all this discussion about Facebook and Paypal, interesting news comes from Finextra on events beyond the conference centre as PayPal president David Marcus announces plans to step down at the end of the month to join....yes, you guessed it, Facebook.
12.10 Burwell: There is a huge trust advantage banks have. But how much does this influence people's buying power and behaviour? Tarver suggests that there may be a big generational gap, in that younger customers with less money are nto so hung up on trust. If they're prepared to trust Facebook with their personal histories and photos, they may also be prepared to trust the network with their cash. Burwell says there's a difference between making ten million one dollar payments and ten one million dollar payments. The younger generation may be happy with PayPal, but as they get older and move into the corporate world they go through a risk curve where other issues around trust and security hold sway.
11.55 What is the future for big financial organisations when they have to spend so much time dealing with regulations, asks Tarver. Sposito says the regulatory obligations are a licence to stay in business. But, still we have to wake up and smell the coffee, he says, because a lot is going on around us in terms of new technology and new competition. Burwell points to bitcoin and PayPal, both of which are dwarfed in terms of volumes by ACH and wire transfers. Non-banks providers are able to operate more freely in a particular space because of their smaller scale. But there will be a point where they trip the wire and excite the interests of the regulators.
11.45 Tarver is now joined on stage by Deutsche Bank's Dean Sposito, and Tod Burwell, president and chief executive officer of non-profit transaction banking advocacy outfit BAFT for a roundtable Q&A.
11.30 Are you ready for Singularity? asks Tarver. This is the point where AI overtakes human intelligence. At the moment, Google own all the data. They also have all the world's talent around natural language processing. Importantly they're also an open development platform. But it's not about one company, it's about the network, says Tarver. The challenge for banks is to pool their talents, their considerable intellectual capital and financial firepower to embrace the future, he concludes. Cue applause from a somewhat shell-shocked audience.
11.23 It's challenging, alright, but some people seem to be enjoying it:
11.15 Bankers need to think about the customer, and the customer experience, not how they can make more money or improve their margins, says Tarver. How are Facebook, Google Amazon and Apple going to change your world, Tarver challenges the audience. Think about the companies coming through and not the people on your left and right shoulder.
11.05 Banks think in a linear way and they need to start thinking exponentially. "Banks don't give a shit about their customers," says Tarver. They don't understand or listen to what customers want. Customers don't want multiple channels, he says, they want one simple channel that adapts to their needs as and when. Every device should reduce the complexity of my life, complains Tarver, but when I deal with most banks their products make it harder.
11.00 Andrew Tarver takes to the stage in a fetching pair of red chinos and open-necked shirt. He's tagged as the 'challenge speaker' and he's taking the job seriously. Banks are lagging innovation by approximately 20 years, he says. Furthermore, corporate exploitation is no longer acceptable. Banks are the cavemen and women of the digital revolution, he continues, drawing a laugh from the suits in the hall.
10.55 Banks need to find ways to innovate and invest in a multitude of solutions if they are to remain relevant in a changing world. We can't do this alone, says Manner. We will need to join forces with other banks, clearing companies and IT providers. Collaboration is key, alongside sensible regulation
rather than the current vogue for over-regulation.
10.45 Simplification is a key component of great customer services, says Manner. He points to Apple and Google as great simplifiers. To emulate this, Nordea plans to reduce the number of products by 80% and create a seamless multi-channel experience for customers. As a result, the bank is now contemplating a core banking replacement strategy to help it achieve its aims for cross-platform access to real-time customer data.
10.40 Nordea's Topi Manner asks how do we create customer value in an evolving market? The value chain starts with the client and ends with the client he says. At Nordea, the Internet bank is the single biggest channel, but mobile is skyrocketing in terms of growth and is expected to overtake the Web channel in the next couple of years.
10.00: The main event kicks off at 10.15 with the traditional welcome from EBA chairman Hansjörg Nymphius. He'll be followed onstage at 11am by our keynote speaker Topi Manner, head of banking, Finland, Nordea Bank. The 11.30am 'Challenge Speaker' slot has this year been allocated to Andrew Tarver, founder of BoldRocket and Capco CEO.
09.40: Meanwhile the Finextra TV crew polish their microphones in anticipation of a hectic two days under the lighting rig in our purpose-built TV studio cum sauna (It's going to get hot in there!).
09.36: Breakfast is served, and the main hall is a buzz of excitement as the first delegates begin to stream in. There are lots of mouths to feed, with 850 payments professionals from across Europe pre-registered, and more expected on the door.
09.20 Finn facts:
- Helsinki has the highest cellphone-to-resident ratios in the world
- Finns consume an average of 12 kilograms of coffee per capita yearly, which is over twice the amount of most other Europeans
- In Helsinki, the population of women is greater than that of men, with men constituting around 46.6 per cent of the population and women making up around 53.4 percent
- This coming Thursday, Helsinki residents will let down their hair to celebrate the founding of the city in 1643 at the annual Helsinki Day revelry
09.18: In the lead up to the main event, Finextra and the EBA have hosted EBAday Business Forums across Europe with some of our partners. You can catch video highlights from our stopovers in Milan, Frankfurt, London and Brussels on the
EBAday TV channel. While you're there, check out the thoughts of Andrew Tarver, founder of Capco spin-off Boldrocket, who will join Topi Manner, Head of banking in Finland for Nordea Bank, on the podium to deliver the opening keynotes.
09.15Here's another perspective.
09.10: We'll be spending the next two days debating the future of European payments from the frankly fantastic
Finlandia Hall in central Helsinki. For a modernist geek like me this is a real treat. Designed by the celebrated Finnish architect Alvar Aalto, the building has played host to a glittering array of world leaders, including Presidents Ford, Reagan and Bush snr, Brezhnev and Gorbachev, Pope John Paul II and the Dalai Lama.
09.05 This just in: EBA Clearing has opened the doors to registrations for its MyBank Mandate service, with Intesa Sanpaolo and UniCredit the first banks to sign on. Full story
here.
09.00 EET: Good morning! This year's EBAday is on the theme 'A new era of transformation and convergence for banks'. We'll bring you news from a packed agenda of keynotes, panel discussions and debates covering global regulation, e- and m- payments, supply chain finance, liquidity management, treasury payments and, of course, Sepa.