Sixty-two percent of European financial institutions expect to increase spending on payments technology throughout 2017, driven by the revenue-generating opportunities of instant payments and the need for increased operational efficiency.
A survey of over 500 banks worldwide conducted by Ovum found European banks at the forefront of the payments modernisation process as they strive to update their legacy infrastructure for a new era of real-time payments and the imminent introduction of the EU's revised Payments Service Directive.
The results found that attitudes towards the benefits of instant payments are increasingly positive among the banking fraternity, with improved customer propositions, increased revenue opportunities and potential for cost reduction all viewed as constructive outcomes.
With PSD2 top-of-mind, the arrival of open APIs is splitting industry opinion. While 59% have a clear strategy for creating open APIs and interfaces for developers, 45% also report that they are taking a ‘wait and see’ approach. Concerns about security and liability remain a challenge for 42% of institutions surveyed, with no clear guidance over the reputational and customer impact of fraudulent use of customer data arising from a third party breach.
“The market is rapidly changing — banks must invest wisely in core payments platforms and infrastructure to take advantage of relevant opportunities,” says Kieran Hines, head of industries, Ovum. “Financial institutions that proactively shape strategies around open APIs, fraud prevention and immediate payments will reap the benefits when it comes to both customer experience and revenue.”