October 31, 2011

What is the future of payments, and what role will banks play in that future? If the talk at SWIFT's recent Sibos conference in Toronto is any indication, that future is going to be challenging and competitive, but also full of opportunity. These also are among the findings of the World Payments Report 2011, released at Sibos and jointly produced by Capgemini, The Royal Bank of Scotland (RBS) and Efma.

The study found that the 2008 financial crisis caused a slowdown of growth in noncash payments transactions; it also notes the regulatory impact the financial crisis has had on payments. But whether that impact is harsh or helpful is subject to debate. "There are 27 significant industry and regulatory initiatives that would heavily impact this industry," Jean Lassignardie, global head of sales and marketing, global financial services, Capgemini, tells me.

But the report also outlines what it calls five industry "transformation trends" driven by key regulatory and industry initiatives: systematic risk reduction and control, transparency of services, innovation, standardization and convergence. However, according to Lassignardie, "You can't look at these things in isolation -- that's old thinking." Also addressing the theme of convergence, Simon Newstead, managing director, head of FI market & business strategy, Global Transaction Services, RBS, adds, "We're seeing the traditional differences between fast and slow payments types, between high- and low-value payments, starting to come together."

Ultimately, Lassignardie argues, "Banks are challenged but well positioned." Or, as Newstead says, "There is nothing like new competition and emerging technology to stimulate a focus on product development."

Download our November special digital issue on the future of payments to learn about the strategies banks are using to help them make that transformation.

ABOUT THE AUTHOR
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & ...