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.
15.30 As the moderators gather to reflect on the last two days, we say goodbye to a hugely successful EBAday 2017, and look ahead to EBAday 2018 in Munich.
15.10 For those who couldn't make it to this afternoon's session.
14.50 Elsewhere around the conference, EBA Clearing is kicking off an investigation into how its flagship single euro payment system should be positioned in the rapidly-evolving landscape. Finextra has the details.
14.40 Finextra video dude putting finishing touches to closing summary highlights reel
14.15 With the clock winding down on EBAday 2017, it's time to take a breather and reflect on some of the key takeaways from this year's event. As a conference devised by bankers for bankers, we've heard some trenchant views expressed. Here's my take on the big issues which surfaced this year.
- The fintech disruption phenomena is over, as startups realise that they need to adopt a more collaborative and inclusive approach to their dealings with banks if they want to achieve scale.
- PSD2 deadlines may be pushed back. As one banker said: "Policy makers are putting a sign in the forest and expecting us to build the road."
- Regulatory intervention is needed to force harmonisation and interoperability among domestic payment schemes.
- Blockchain and distributed ledger technology is still on the hunt for a viable use case in payments. One banker dismissed it as a "fairy story" with no relevance to the power-heavy processing demands of the global payments industry.
13.55 A successful open banking launch will provide a better consumer experience if it comes bundled with a collection of apps, not unlike the iPhone, says Kirsch. He suggests that banks make a list of the most common problems and frustrations that people have with banking and commerce and build apps which directly address those needs. "You want to become the Amazon of banks."
13.50 An audience vote shows an overwhelming majority of 80 percent of those present believe that PSD2 will drive the uptake of a myriad of new consumer services.
13.45 Steinbach foresees further delay to the innovation process as the European Banking Authority and Commission bat the RTS back and forth. Urges regulators not to get too bogged down in the details.
13.40 Shaefer describes PSD2 as a game-changing event which will provide the banking community with direct access to a broader ecosystem of fintech startups, both as partners and potential clients.
13.35 Kirsch believes that banks will migrate to one or two open platforms. "If every bank has their own API it will create a nightmare for developers. The selection of the platform is the number one most important thing that a bank can do."
13.30 BofI's Exton points out that PSD2 is not the end game in terms of the shift to open banking. "PSD2 is the start point of a movement, but open banking is much broader than just PSD2."
13.20 Egner reminds the audience that only 141 days remain before the revised payment services directive comes in to force. Yesterday he heard a rumour that full regulatory technical standards may be pushed back from April 2019 to July 2019, which will further intensify the pressure on banks.
13.15 Lunch over, I’m waiting to hear how banks can make the most out of PSD2, with EBA secretary general Thomas Egner chairing the discussion. Panellists are Richard Exton, head of business capability and change, Bank of Ireland, Token’s Steve Kirsch, Christian Schaefer, head of payments and product management for corporate cash management at Deutsche Bank, and Michael Steinbach, CEO of equensWorldline.
Last year’s challenge speaker Kirsch arrives fresh from a $15.7 million funding round in April. Token's platform is capable of integrating with a bank's core system APIs and internal policies and procedures to provide a shortcut to cryptographically executing PSD2-compliant digital transactions.
12.30 Backslaps all round. EBA’s Daniel Szmukler and Finextra’s Nick Hastings take a bow.
11.50 Adams moves the conversation on to regulation. Niederlander says regulators need to adapt and focus on legal implications of the technology. "If they don't get involved, this technology won't fly," she says.
11.45 Gerhard Kebbel from Helaba believe the application of blockchain technology in the payments space is akin to a fairy story, simply because of the computing power required to process high scale transactions "This idea that blockchain is going to replace the banks is over." Smyth thinks private networks in the corporate space might make for a better use case. IBM's Smyth describes blockchain as a "network sport".
11.40 NatWest's Adam Smyth references a payments R&D project underway in Ireland with subsidiary bank Ulster Bank and Deloitte and invites delegates to take a tour of the bank's stand in the exhibition hall to view a working demo of the technology in action.
11.30 Niederlander says Erste Bank began experimenting with DLT as a "compelling proposition" for intra-group settlement of foreign currency transactions, eighteen months ago. Since the project kicked off Niederlander admits that it's not bean an easy ride, with no definitive outcome. However, the effort triggered deeper discussions about how to do things differently at the infrastructure level, which in itself proved hugely valuable. Erste is now working with a wider network of corporate partners to try out the application of DLT in the trade finance arena.
11.20 McClean says financial services clients want private permissioned networks, they want to control digital ID for KYC etc. The DLT underpinning is not much different to TCPIP on the Internet. Very much in favour of using open source as a means for driving maturity. "For us, it's open source, open standard and open governance."
11.15 Distributed ledger technology – hype or hyperbolic? That’s the question Colin Adams of Lipis Advisors will be putting to panellists Gerhard Kebbel at Helaba, Petia Niederländer, head of group retail and corporate operations Erste Bank, Adrian Smyth, director of business development, payments, NatWest, and IBM’s blockchain markets lead John McClean.
11.00 Plenty of chatter in the conference streams about the fintech pivot from disruption to collaboration. Banks can expect a warm welcome at the EBAday Fintech Pavillion.
10.40 Pilbauer says most exciting overlay services will be built on data, and for this you need aliases. Payments Canada is adopting ISO 20022 as means to achieve this. Evans believes there's a tremendous upside to the use of aliases as a proxy for bank codes in the creation of new transactional models.
10.30 Request to pay as an overlay element on faster payments schemes worldwide could lead to a whole new world of payments. Pilbauer from Payments Canada says the industry has hit a point where it needs to remove friction and hurdles to rolling out new mobile and transactional services. "People don't care about payments, it's a commerce transaction," he says.
10.20 HSBC's Evan harks back to yesterday's session on the need for legislation and an audience poll which found 70% in favour of regulatory intervention to mandate interoperability across multiple schemes. Treacher preaches the free market gospel as a means to ensure innovation rather than donning a regulatory straightjacket. Dovetail's Coen believes that governmental intervention may be more effective for speeding up commerce, pointing to the Indian model.
10.15 Ripple's Treacher says the industry needs to rethink what it means by interoperability. The development of cryptography means that the network now can be secured without the need for multiple message standards that drive interoperability.
10,10 Panel huddle before the lights go up
10.00 Tough choice between a session on instant payments or a deep dive into bank/fintech relationships. I’ve opted for the former, which sees Kevin Brown move straight from this morning’s strategic roundtable to ask the panel about what Europe can learn from other initiatives worldwide. Up on the podium are Martin Coen, CEO of Dovetail, Mark Evans, global head of payments advisory at HSBC, Payments Canada CIO Jan Pilbauer, and, to shake things up a little, Marcus Treacher, global head of strategic accounts at Ripple.
09.50 Ulster Bank runs innovation immersion workshops for staff. But that on its own is not enough. Coyle refers to the bank's experience of using Facebook's Workplace social network for businesses as a way to drive further engagement and discussion with staff
09.35 Cobourn says the corporate sector is the most under-served in terms of digitialisation. "Are we dealing with the rigght person in the corporates to properly understand their needs. This is a great opportunity for fintechs to come in and serve a need." Coyle believes that part of the issue is that corporates are grappling with the same transformation questions as banks. The partnership/relationship model will be important in kicking off a dialogue and finding collaborative solutions.
09.25 Coyle says the Republic of Ireland has the most number of connected devices per person and this is reflected in the speed at which new mobile-based services are taken up. "Change is nothing new to the industry, it's the speed," agrees Coburn. "We're seeing that in the customer response."
09.20 Helaba's Kebbel believes there will still be branches, but the question is "can they be more than Apple flagstores". No one has a silver bullet says Cobourn. "We are all taking different approaches," he says. "but we are led by where the customers are going and at the moment they are going in just one direction." Branches will still have a role, he believes but maybe just as the "cream in the coffee".
09.10 Bank of Ireland's Kelly says that customer interactions across all channels have doubled over the past few years. In the branches, the bank now only conducts three percent of all transactions across the counter. The easy option is to shut the branch, says Kelly "but I believe that our customers still live and interact in communities and the branch has a role to play in that. Most of us have redundant space in the branch, so give that space back for community initiatives, presentations, incubation, etc."
09.00 "Have we got the right mindset in terms of culture to evolve in this age of digitilisation," asks Brown. Kebbel refers to progress made by Deutsche Bank, but also to the Nordics "which are far more advanced than German banks in this regard". AIB's Coburn says that staff in the bank today are very different to those employed seven years ago. In the future, more of the staff will come from the millenial generation, which will lead to a fundamental change in the way in which banks develop and roll out technology. "Whether the board or the policy makers like it or not, the culture is changing," he says. Ulster Bank's Coyle also acknowledges a change in culture and leadership at the bank, "almost by osmosis". Having the right tone from the top is still crucially important if you really want to transform the bank, however.
08.50 Bleary morning for the EBAday crowd, with delegates slowly streaming in to the auditorium.
08.30 Day two begins in 15 minutes time with a strategic roundtable: ‘How can banks evolve in the age of digitilisation?’ Up on stage are Fergal Coburn, head of digital products and payments, Allied Irish Banks, Ciarán Coyle, chief administrative officer, Ulster Bank, Gerhard Kebbel, managing director, digitilisation, Helaba, Gavin Kelly, director, distribution channels, Bank of Ireland, and moderator Kevin Brown.
Finextra caught up with BofI’s Kelly ahead of the conference, where he explained his views on the role of innovation and the importance of redeploying redundant branch space for community engagement.
O8.15 Welcome back to day two of EBAday.