Europe’s payments landscape is being transformed by regulation, advances in technology and the evolving demands of retail and corporate customers. In response, European banks and payment service providers (PSPs) are reinventing their business and technology strategies – formulating new operating models, evaluating new technologies, and redesigning customer journeys to stay competitive in a fast-evolving landscape.

But do banks really know what their future business models should be, in light of the revised Payment Services Directive (PSD2) and the rise of instant payments? Are they in a position to leverage these changes to undertake a wholesale modernisation of their payments platforms? Are they on the right track with their approaches to partnership? And are they managing to keep sight of the bigger picture, while mastering the detail of the changes under way?

This is not easy, but is essential. As Becky Clements, Head of Industry Engagement and Payments Change at Metro Bank, points out in the report, “the next two years in the payments industry will be really important”. “The industry must get this right – the new RTGS, the single payments architecture for retail payments – because these developments could be a gamechanger. We should all be reading as much as we can and contributing as much as we can to ensure we have the right insights into and influence over these really interesting and important developments,” she says.

Responding to change requires banks and PSPs to think about the big picture, the report finds. “Just speeding up the same processes is not good enough to compete in the digital era,” says Daniel Szmukler, Director, Euro Banking Association (EBA) in the report. “Banks should use the opportunity to rethink their business and operating model and determine what strategic niche they wish to occupy in a wider ecosystem.”

In that context, partnership will become ever more important, the report concludes. “In the future, I think we will see more agreements between PSPs and merchants and banks, and between start-ups and banks. Collaboration will be made possible by APIs, and everyone will need to try to understand which are the best partners: which of these companies can provide parts of the service better than I can?” says Anna Puigoriol, Manager, Payments and Consumer Financing, Sabadell.

How banks and PSPs handle the technology implications of change will also be critical, since those implications are not trivial. As Carlos Sanchez, CEO and Founder of ipagoo, points out: “Unless you have built your technology for a specific business model, it’s not plasticine: it’s very difficult to just change your technology – especially when you are serving millions of customers.”

At this pivotal moment, Finextra’s European Payments Industry Insights Report asks and seeks to answer these important questions. The report brings together the viewpoints of a large number of leading payments industry practitioners with the findings of Finextra’s own market research during 2017.

An additional dimension to the insights comes from the input of thought-leaders from a range of leading providers to the payments industry. These include ACI Worldwide, CGI, Dovetail, Finastra, FIS, Mastercard, SIA, Tieto and Vocalink. Exploring topics including instant payments, future business models, modernisation, digital disruption, strong customer authentication, virtual account management and payments network convergence, these thought-leadership contributions generate further insights into the options ahead for payments market participants in a future being reshaped by a series of powerful change drivers.

To find out more about the future payments landscape in Europe, download the paper now.