As global non-cash transactions boom and competition from fintech startups and Big Tech flourishes, banks remain reluctant to embrace Open Banking via data sharing, ecosystem partnerships and open platforms, according to a report from Capgemini.
Capgemini's latest World Payments Report shows transaction volume of non-cash payments is growing rapidly, particularly in developing markets within Asia (32% growth) and Central Europe, Middle East and Africa (19% growth). By 2022, non-cash transactions are expected to top a billion - a compounded annual growth rate of 14%.
Yet, among the incumbents surveyed by Capgemini across 18 countries, most are more fearful than optimistic about the pace and direction of change in the market, concerned about Big Tech challengers and the downsides of Open Banking.
Nearly two thirds identify as a leading threat Big Tech competitors such as Facebook, Google, Apple and Amazon leveraging their global reach, brand equity, customer trust and great customer experience.
Most digital transformation efforts at 60% of banks are in response to regulatory compliance. Adoption of APIs beyond what regulation requires has been sluggish: a majority of banks have no plans to implement APIs that expose data in areas including intra-bank statement conditional payments and branch/ATM location.
Where banks are not being mandated to share more data, they are generally choosing not to do so and Open API "is seen as a regulatory compliance game rather than a growth opportunity," says the report.
“The global payments landscape is undergoing significant evolution, but not all participants are comfortable with the pace and direction of change,” says Anirban Bose, CEO, financial services strategic business unit, Capgemini.