The now and next for payments innovation

Innovation is prevalent across all parts of the financial services industry and even more so within the payments eco-system. Last week I was pleased to take part in and present at the BPFI National Payments Conference 2024 in Dublin, exploring some of the most pressing trends right now. We can all recognise the growing complexity of the payments landscape, and now really does feel like a pivotal time to set the foundations for what comes next - both for the industry and for everyday consumers.

With that in mind, here are my top three takeaways from the event and the areas we should be spotlighting for progression right now.

1.      Consumer first, always

One of the most unified schools of thought across all presenters during the conference was that everything we do should be about the consumer. From regulators and industry bodies to suppliers and financial institutions, there is clear recognition that any actions without the end customer in mind will likely result in ineffective and unsustainable solutions.

This consumer focus should be supported by several factors. Firstly choice, convenience and transparency. As consumers become ever demanding and increasingly intolerant of poor experiences, getting those fit-for-purpose customer journeys right is vital. Greater choice, supported by innovation, also supports effective competition and therefore the ability to cater for different needs and preferences.

Secondly, we need to protect payment choice for consumers. Cash continues to remain the most frequently used method of payment in many countries and access to cash needs to be safeguarded for the future; not only to support financial inclusion and the vulnerable members of society, but also to reinforce choice and flexibility for all.

Alongside this, the boom in digital and alternative payment methods presents exciting opportunities for progression and innovation in a meaningful way. However, this needs to be underpinned by transparency and security, and coupled with consumer education.

2.      Collaboration is key

Creating a common approach with common goals was another consistent theme. There is huge potential for untapped opportunities for payments change, but many of these will be dependant on a more unified methodology. The appetite for greater integration will of course vary across the industry, but the long-term benefits are becomingly increasingly clear.

From a governmental point of view, a central payments strategy sets out the structure for future progression and can also help define what ‘good’ looks like. Coupled with an adaptive regulatory framework that is fit for purpose, we can build consumer confidence in payment resilience and security, which ultimately builds trust.

At an industry level, information exchange could be the gamechanger in payments progression. The ability to create enhanced co-ordination across different parts of the ecosystem could create a system wide approach and break down some of the barriers to that next level of innovation. Equally, adopting a more collaborative mindset can extend far beyond the immediate industry. Intra-industry partnering and information sharing with organisations such as telcos is likely to be a more frequent future trend.

3.      Financial crime continues to be a big risk

Security is, and always will be, a non-negotiable strategic focus. Fraud has no boundaries and, in many ways, highlights how imperative collaboration is to stay one step ahead of the criminals.

We currently see how some organisations even internally are inhibited by poor information sharing in the fight against fraud – whether that is the slow flow of information, or the poor integrity of the data shared. Therefore, it is imperative that as an industry we find new ways of exchanging information. This should be timely, data rich information that is always intended to serve the customer with a more secure experience.

Do we have the right core systems across the industry in place to do this currently? Probably not. However, given that fraud needs a multi-angled view which includes a focus on everything from regulations and payments to cyber and new technologies such as AI, a recharged focus on collaboration needs to become the linchpin of fraud strategies moving forward.