Senior executives from challengers and incumbents gathered together to debate market access, customer requirements, PSD2 implications, technology issues and collaboration opportunities in front of a packed crowd at Finextra's NextGen Banking conference at Level39.
Opening keynote Gwyneth Nurse, director of the Financial Services Group at HM Treasury, set the tone for the day’s discussions, noting that the sheer volume of Government-led activity to support increased competition in the UK financial services sector is in itself telling. Nurse also emphasised the continued importance of the sector, with its strong established players complemented by new entrants and a vibrant fintech scene, to the UK economy as a whole. David Yates, CEO, VocaLink then addressed the capacity audience on progress with a critical element of bringing down the barriers in the UK market – the opening up of access to payment systems.
Payments market access was the theme of the first panel of the day, which brought together Craig Tillotson, CEO, Faster Payments; Chris Dunne, director of market development, VocaLink; John Box, head of strategic partnerships, Raphaels Bank; and Andrea Dunlop, CEO card solutions & acquiring Europe, Paysafe for a discussion moderated by Jerry Norton, VP, financial services, CGI. Each panelist brought the audience up to date on progress with opening up access from the perspective of their firm. Panellists agreed that great strides had been made in the past 12 months, and, though a number of challenges remain, there was also consensus that market participants were “pushing on an open door” and that with a range of models now available access is becoming more achievable for a broader range of players.
The NextGen agenda then shifted its focus to the customer, with panels exploring first what businesses want from their banks going forward and then what consumers want from next generation banking. Moderated by Stephen Grainger, head of market infrastructures, Swift, and featuring Sharon Argov, CEO and co-founder, Fundbird; Will Beeson, head of operations & innovation, CivilisedBank; Christophe Rieche, CEO and founder, iwoca; and Patrick Mang, lead for innovation strategy, HSBC, the panel on business banking concluded that SMEs have been under-served and that this has created opportunities for new entrants – particularly with new lending models to support the working capital requirements of small businesses, but also with new service models to better meet the ongoing relationship needs of SMEs. That said, established banks are also looking at new ways to improve their offerings for SMEs, with value-added services and data, it emerged.
The retail customer should also be the beneficiary of innovation on the consumer banking side, driven by challengers but also by more established players focusing more strongly on customer needs and how to meet them in terms of product, service and channel. While mobile and technology generally are enablers for nextgen retail banking, a dogged determination to deliver what customers want throughout their financial lives is a key differentiator, concluded the panelists – Sophie Guibaud, vice president European expansion, Fidor; Jonathan Kernkraut, retail and business proposition director, Metro Bank; Alex Letts, founder & chief executive, Ffrees; Sigga Sigurdardottir, chief customer and innovation officer UK, Santander UK; and David Webber, managing director, Intelligent Environments.
Following a lively networking lunch, a revitalised audience reconvened to hear an update on pertinent regulation from Graeme Mclean, head of banking, lending & distribution, strategy and competition division, FCA. Then came an in-depth panel session on one key element of regulation particularly relevant in the context of new entrants to the banking business – PSD2. The question debated was, ‘PSD2 arrives in 2018: Are you ready?’ The conclusion of the panelists - Paul Anning, partner, Osborne Clarke; Anne Boden, CEO, Starling Bank; Ian Clark, head of API management solutions, CA Technologies EMEA; Nilixa Devlukia, technical specialist for payments, strategy and competition, FCA; and Nick Middleton, head of payments strategy and Architecture, Nationwide – was that no, the industry is not ready yet. There is a great deal of work to do, and some areas in which more clarity is required – but overall, notwithstanding the significant challenges it creates, PSD2 represents more of an opportunity than a threat for institutions which embrace its potential and start to take it seriously now.
The last panel of the day pitched challenger bank against established bank for a discussion on the future landscape moderated by Keith Saxton, chair financial services programme, techUK and also featured Alex Kwiatkowski, senior strategies, banking & digital channels, Misys. On the topic of technology, opinions unsurprisingly differed between the challengers, Jonas Huckestein, co-founder, CTO, Mondo and Ricky Knox, co-founder, Tandem Bank, and the established banks, Chris Popple, managing director, personal and business digital, RBS; Caroline Thomas, director, innovation & customer experience, Barclays; and Alon Zadka, senior innovation lead, Lloyds Banking Group, as to which will be successful in marshalling new capabilities and securing the custom of nextgen banking clients. Legacy is clearly a challenge for the bigger players – and possibly their governance and outlook simply prohibit their use of data in the most productive way – but on the flip side, just because the barriers are higher, doesn’t mean the established players are any less determined to be the winners in the nextgen banking race.
Jim Wadsworth, product director, VocaLink wrapped up the discussions before introducing guest speaker Patrick Baudry, French astronaut and Unesco Goodwill Ambassador, who captivated the audience with his recollections of blasting off in the Space Shuttle Discovery, and shed a very different light on innovation, risk-taking and success.
Finextra’s full wrap-up report on NextGen Banking will be available for download shortly.