Banks need to explore more non-traditional alliances and partnerships
The next generation of tech-savvy entrepreneurs and business leaders is transforming the global payments market according to a new report, Global Payments 2020: Transformation and Convergence, from BNY Mellon, a global leader in investment management and investment services.
The report says the payments landscape is being shaped by the needs and expectations of retail customers as much as by commercial and corporate clients, as the retail segment's lead in developing new payments solutions filters up to the commercial and corporate segments. Commercial and corporate clients increasingly expect payments solutions to include being able to settle anytime, anywhere, across any channel, which implies a high level of interoperability across systems and across geographical markets.
"The next generation of entrepreneurs and business leaders is taking the helm of economic and commercial activity," said Dominic Broom, head of EMEA sales and relationship management, Treasury Services at BNY Mellon. "To these tech-savvy leaders, having retail banking on their smartphones and tablets is second nature and they are accustomed to convenient, user-friendly applications that offer speed and flexibility. Such expectations are filtered through to commercial and corporate clients, and banks need to embrace the technology."
One of the ways banks can harness this technology is to explore more non-traditional alliances and partnership models, both within financial services and beyond, according to the report. Banks are working in a highly regulated environment, so could find mutual benefit by working with non-bank institutions such as mobile or social network operators, which tend to be more tech-savvy and agile.
The other main drivers of change in global payments include demographics which are reshaping clients' expectations and access to payment channels, the ascent of China which is reshaping traditional notions of north-south trade flows, and currency markets and regulatory regimes which are reflecting the increasingly dominant role of central banks in the management of the global economy. The report offers recommendations for how banks can respond to this threat by: