Payments professionals from across Europe are gathering in Dublin this week for EBAday 2017, hosted by the Euro Banking Association and Finextra. We're liveblogging events here.
16.45 The day is rounded off by a number of short and snappy case studies and presentations. We’ll be back tomorrow at 8.30 sharp.
16.35 Er, shouldn't that be make £££s
16.25 Calla says that BofI has put about 200 staff through internal innovation workshops. The real struggle for the bank has been to put mechanisms in place to evaluate ideas dreamed up in a weekend hackathon and move from concept to production.
16.20 Schonfeld says that the Association of German Banks has made a concerted effort to being fintech startups into the fold, creating an information function and associated membership status. One of the recent outcomes from this has been the introduction of video-based customer onboarding. Initially this wouldn't have passed muster with banking supervisors, but as the Association and fintech firms pushed together to lobby for a change in the rules, supervisory authorities, with a mandate to promote new market entrants and innovation, bowed to demand.
16.15 Payments has been open for a long time, continues Calla, but banking hasn't. Reputation and liability are core components in this regard.
16.10 BofI set up a formal innovation function two years ago which has led the bank on a journey to becoming more open. The bank has engaged with over 600 fintech firms over the past four years, says Calla. "We see third party partners as customers now," he adds.
16.05 Schonfeld says the hype of fintechs creating disrpution and taking over the market is now over. In the era of PSD2- and in a nod to the ongoing screen-scraping debate - the regulators must decide whether they are creating a platform that provides a level playing field or merely a mechanism for protecting the business models of fintech startups.
15.55 Callla says digitilsation is way of thinking. The issue for banks is to how respond to that, to create value for the customers, to create enduring products and inject agile ways of working end-to-end within the bank.
15.45 This session explores the impact that new bank and fintech models will have on the provision of next generation payment services. Moderator Simon Bailey of Finarchy is joined on the podium by Garvan Calla, director, customer digital and innovation, Bank of Ireland, FIS’ Marijke Koninckx, Adam Moulson of Form3 Financial Cloud and, representing the association of German Banks Bettina Schonfeld.
15.30 Back on the floor, the exhibition is rocking
15.15 It's not often that you hear a panel of banks asking for more regulation, but as Olin observes, instant payments are the key to unlocking the benefits of the open economy and should not be allowed to dissipate.
15.10 McDermott agrees, pointing to a suspected drift in the dates for PSD2 until possibly mid-2019 in the absence of a clear prescriptive model. And so too do a fair portion of the audience with a show off hands indicating roughlyl 40% support for legislative action. The ECB's Wacket says the private sector should be given a two-year leeway at the start of such a major project before it becomes necessarry for the regulator to step in. Olin is pessimistic about the outcomes, expressing uncertainty about whether the private sector can achieve its aims without some form of peer pressure or regulatory intervention being brought to bear.
15.05 So, how many instant payment models are currently under development? Upwards of 40, says Boudewijn. Suspects that it's just a matter of time until the regulator steps in.
15.00 Olin and McDermott believe that it does not matter so much how many instant payment systems are in existence so long as there is a clear level of interoperability. This is not proving the case in practice, says McDermott, and is creating real problems in bank back offices. Ultimately, it may up to the regulator to legislate to avoid the risk off piecemeal, fragemented systems operating accross European markets.
14.50 The ECB's Wacket says tthe Eurrosystem is keen to address the operational issues which may arise. Three critical conditions: single settlement model, single access model and unified risk management system. So far the requirement for interooperablity at the pan-European level has proven the most tricky to resolve. The introdduction of instant payments in the Target RTGS platform will be key in this regard.
14.40 Straight into the main topic. Axel Weiss says it's important for savings banks in Germany to understand how many transactions will be hanled by instant payment schemes. Expects about 25% of all transactions to be dealt with real-time, which creates issues around back-end clearing and settlement. Can we handle these transactions in a bilateral manner and within the ten second timeframe required he asks. Important to avoid fragmentation. We want to offer instant payments as soon as possible - live within the next year.
14.30 Onto a discussion about how many instant payment systems doe Europe need? Moderator is Gijs Boudewijn, chairman of the payment systems committee of the European Banking Federation. Speakers comprise Laura McDermott, head of European payments at NatWest, Michael Olin, head of payment products, Allied Irish Banks, Helmut Wacket, head of the market integration division at the European Central Bank, and from the German Savings Banks Association, head of payment strategy Axel Weiss.
14.15 Bank of Ireland demonstrated a real-time online current account opening process last week. Then demoed the same process on an interactive text-based form and then as a voice bot. The latter too are still some way off says Kidd. Nonetheless: "I really believe that a radical change for the customer at the front cannot be far away."
14.10 Reflecting this morning's discussions, plenty of reflection among the panel on the change of tone and three-year pivot undertaken by fintech startups away from chatter about disruption to an outlook more focused on collaboration.
14.00 Kidd says robotic process automation and AI is considered one of the most innovative areas in the bank. It's bringing about real cultural change by bringing people with fresh ideas in from the outside and exposing staff from within to new skills. "It''s creating a sub-culture of innovation within the bank that is beginning to permeate out to the rest of the bank," he says.
13.50 Broxis warns banks that issues around liability and Open APIs in PSD2 have yet to be properly addressed. "Don't panic tthat everybody else is ahead of the game." Clark points out that Regulatory Technical Standards documentation for PSD2 are mostly about what to do, not how to do it, Recommends nonetheless that banks prepare to fail fast, start now, make some errors, but get ahead of the game. Kidd says: "Yes fail fast, but fundamentally at the core banks need to slow down,"
13.45 Delegates invited to answer real-time question on EBAday app about how far along they are with their own digital transformation programmes. 48% claim to be well underway, while 34% have started the process,
13.40 Introductory statements from the panel play heavily on the arrival of Open APIs and the opportunity they present to tranform business models and unlock inter-organisational change.
13.25 Heading for the alternative payments and technology stream to check out a session on the usefulness of digital laboratories chaired by Iguacu Payments founder and former ING business strategy lead Herco Le Fevre. He’ll be taking charge of a four-person panel comprising MyBank/Preta MD John Broxis, Ian Clark, director of API solutions at CA Technologies, Jonathan Kidd, head of robotics process automation at Bank of Ireland and SIA’s head of innovation Nicolo Romani.
12.55 From the opening plenary to the silver screen. Deutsche Bank's David Watson raps with Finextra TV
12.15 I too can see the future. The flat battery on my laptop is a sure sign that lunch must be approaching...time for a recharge.
12.00 "We're seeing organisations now that they say you can't get a position in our business unless you understand and can foresee how technology is creating new sources of value," says Talwar. "We don't want to hire people who are already three-years behind the curve in their understanding of how the world is changing."
11.50 Talwar asks the audience to rethink their assumptions about money and the future. "It's not about the technology or business propostion. It's the mindset that matters most," he says. Points to a host of major industries that have been fundamentally disrupted by an invisible accumulation of micro and macro factors. Compares incumbent banking apps to those of digital first challengers such as Monzo. While the banking app appears more concerned with internal procedures and compliance issues, the Monzo user interface creates a simple one-click experience. "What differentiates us is not our technology, since that's essentially the same, but the capacity to rethink what we want to achieve and to put ourselves in the shoes of our customers."
11.40 The challenge speaker slot is usually reserved for someone with provocative views from outside the banking industry, prepared to challenge the status quo and set the tone for the debate that follows. Talwar’s presentation will be measured up against those of previous ‘challenge’ speakers, including Steve Kirsch of Token, Ripple’s Chris Larsen and Andrew Tarver of the now deceased (code word for disrupted) tech consultancy Bold Rocket.
11.25 Watson: "Fintechs are knocking on our doors every day, but there are still those that want to compete with us aggressively. They should be careful what they wish for." Points out that there are big technical and compliance hoops that startups have to jump through if they want to apply for a banking licence.
11.15 Arnold asks how banks can avoid becoming dumb pipes, as the Google's of this world bring their prowess to bear. Ramsay agrees that it's a terriffying prospect for the banks, but believes that this is the way the industry is moving. "The worst case scenario is to become a dumb pipe," says Ramsay. Banks may choose to view themselves as being in a commodity business and sell-on their services to third parties and other banks, or they will need to find new and clever ways to embed themselves and their brand within the value chain. Equally, Google is not necessarily the biggest beast in the room and that the real disruption may arrrive from the East and the rise of e-commerce conglomerates like Alibaba and TenCent.
11.05 Moving on to the sharing of customer data with third party providers, Watson says there is a huge risk from a reputational perspective for banks opening up their APIs and client data to small-scale fintechs. Expects that regulators will have to wake up to this issue and formally address the potential risk and client protection problems that may arise.
11.00 The big blockchain question rears its heads. Ramsay says that of all the experiments conducted by HSBC the only arena where the bank has so far found a valid use case is in international trade, where the distributed ledger provides an elegant answer to the problems of connecting multiple players to transactional data in a real-time trade finance and supply chain context.
10.55 "What are the risks to banks of engaging with fintecch?" asks Arnold. Ramsay says VC funding is not necessarily a good thing for fintechs since by necessity they are looking for a fast turnaround and profitable exit. Banks on the other hand are more concerned about the proposition and it capability of being integrated within the institution, both from a cultural and techncical perspective. Also, "We have to be confident in tthe fintech's longevity. There will be consolidation."
Watson points out that banking is built on a foundation of trust. "What we bring to the table for fintechs is trust and access."
10.50 The FT's Arnold quizzes HSBC's Ramsay over the changes wrought over the past three years from within the fintech sector, as many startups have realised that they have to work in collaboration with banks. Ramsay tells an anecdote about a recent meeting with CEO of a big startup which displayed a message proclaiming 'Kill the banks' hanging in reception. Suggested to the CEO that they might want to rethink their marketing campaign.
10.40 Ryan rounds off with a whistle-stop tour of Ireland's efforts to grow as an incubator for fintech talent witth the emphasis on public/private sector collaboration as a key element in building a strong innovation ecosystem.
10.30 A fast-talking Ryan performs a full-on sales pitch for Ireland and its post-Brexit strength as a natural destination for banks looking to relocate from London and tap into a strong local economy and talented workforce. He says the Governmen,t working in collaboration with the private sector, is to imeplement forty new actions this year with the objective of delivering a clear framework and infrastructure programme for companies looking to move their operations.
10.25 Ehrmann draws parallels between the 21 st century payments industry and 15th century explorers, heading out across the world in search of new lands and enlightenment.
10.20 Shameless plug coming up as Ehrmann bigs up Finextra, EBA and the Irish banking industry for putting together such an exciting and insightful programme.
10.00 Curtain up for the customary video intro and the arrival onstage of EBA chair Ehrmann, who welcomes a packed plenary room to EBAday 2017. Wall to wall tumping techno booms through the surround sound speaker system
09.55 The main event kicks off in five minutes at 10.00 with the traditional welcome from EBA chairman Wolfgang Ehrmann. He’ll be followed onstage by keynote host Paul Ryan, director for international finance at Ireland's department of finance.
At 10.40 a strategic roundtable will explore the means to pursue ‘innovation through collaboration’ in a discussion between Craig Ramsay, global head of innovation, liquidity and cash management at HSBC and Deutsche’s Bank chief digital officer for transaction banking, David Watson. The head-to-head will be moderated by Martin Arnold, the FT’s banking editor.
The morning’s conference will closed out by this year’s challenge speaker, Rohit Talwar, the CEO of Fast Future, who earns a living as a specialist advisor on business transformation, disruptive strategies and radical innovation.
09.50 The Forum awaits
09.45 The EBAday conference programme comprises two streams, one of which will address methods to enhance existing payment models, while the other will explore alternative payments and technology trends.
The former will navigate the global move to real-time payments, the future of correspondent banking, and control of intra-day liquidity management in instant payments, among other issues. The latter will take a deep dive into blockchain technology, mobile payments and fintech threats, PSD2 and the move to open APIs.
09.40 If you’re wondering where this year’s show guide is, just reach into your pocket! For EBAday 2017 we’ve done away with the dead trees version, replacing it with an all-singing, all-dancing mobile app. From here you can access the latest agenda and floorplan as well as keep abreast of the increasingly delirious ramblings from yours truly on the Finextra live blog.
The app’s available for download here and the top-secret password is Dublin2017 (psst, don’t tell anyone). Alternatively, head to Google Play for android and the App Store for iPhone and search for EBAday.
09.35 Breakfast is served, and the exhibition floor is packed to the rafters as the first delegates begin to stream in.
09.30 It's an accelerator Jim, but not as we know it
09.20 The motto for this year’s EBAday is ‘The age of discovery – towards full payments digitalisation’. Aiding the discovery process, Finextra and the EBA have selected 15 of Europe’s top startups to showcase their tech at the Fintech Pavilion, located in the main hall. That’s double the number that featured in the Pavilion’s inaugural year in 2016, and highlights the growing interest in fintech/bank collaboration as a route toward a digital-first future for European banking.
09.05 Queues are building for a record-breaking EBAday, which this year plays host to 1400 delegates and 76 exhibitors.
09.00 Online essentials...
08.45 EBAday is taking place this year at the Convention Center Dublin, with a grand view across the River Liffey. Popular myth has it that water extracted from the Liffey provides the secret ingredient that gives legendary local brew Guiness its dark distinctive flavour. It’s a typically Irish yarn, but sadly not true, as the Black Stuff uses water piped from the Wicklow mountains.
08.35: EBAday delegate takes extreme commuting challenge
08.15 Building on the success of last year’s congress in Milan, EBAday 2017 will set out a vision for the future of the European payments industry as new technologies and trends reshape the business. We'll bring you news from a packed agenda of keynotes, panel discussions and debates covering real-time payments, Open Banking, distributed ledger technology, PSD2 and the challenges presented by the digital revolution in banking.