Winning customer war is key to realising transaction banking opportunity

Dubai - 17 September 2013

Temenos hosted Sibos briefing with CEB TowerGroup, Barclays and ABN AMRO explored future of transaction banking

Temenos,the market leading provider of mission critical solutions to the financial services industry, today held a breakfast briefing at Sibos which revealed that giving customers a rich, differentiated experience is key to achieving sustainable competitive advantage in the growing and highly competitive transaction banking market. Simplicity was viewed as the key to achieving agility.

The briefing, hosted by Temenos, featured panellists Andy Schmidt, Research Director at CEB TowerGroup, Peter Stuit, Vice President T24 Payments at ABN AMRO, Matt Brown, Head of Payment Processing at Barclays and Amanda Gilmour, Payments Product Director at Temenos. In addition, it was attended by over 40 senior executives from 20 financial institutions, who contributed to the debates which covered a range of topics including standards, automation, mobile payments, big data, apps, disintermediation and cloud as well as the principles to which banks should adhere when modernising systems.

The panellists viewed standards to be a big opportunity for the industry. The collective view was that, if the banking industry could move towards global standards – such as ISO20022 – it would introduce much more flexibility, help the industry to move to real-time payments as well as assist in heading off competition from non-banks, who have already adopted standard protocols.

Innovation in payments is key to avoiding disintermediation,considered to be fundamental to the long term success of the industry. To avoid becoming a “dumb pipe”, as the processor and not originator of transactions, the panellists argued that the industry needed to accelerate innovation. Just as non-banks are providing aggregation services or “wallets”, so must the industry, offering services of specialist partners as well as their own, and made relevant through location and transaction history.

As regards big data, the consensus was that data mining is not enough. Being able to run algorithms that can help spot cross-selling opportunities and suggest relevant products is important, but the panel agreed that banks must also invest in services that make more data available to end customers through apps.

In terms of technology needs, the panellists were agreed that the key principals underpinning all system replacement must be flexibility and simplicity. The challenge to marry efficiency with innovation requires that banks simplify, especially ahead of embarking on a project, and introduce the maximum level of flexibility to drive innovation.

Asked about cloud, one of the panellists opined that the “inconceivable is becoming conceivable” and all agreed that cloud adoption is coming, even for the applications that handle the most sensitive data, but probably not in the near term. The perceived barriers to adoption, around security and regulatory approval, are all being overcome the panellist said.

The last topic covered by the panel was around the possible paths of innovation in the future. This produced lively debate, but a consensus formed that innovation must lead to “instant gratification”, where payments can be effected and confirmed immediately. The best route to this may come through Near Field Communications, is likely to involve biometrics and will increasingly occur through mobile devices.

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