Navigating payments innovation: How to adapt to new consumer demands & industry advancements

March 22nd 2024


The payments ecosystem stands at an inflection point. The emergence of mobile wallets and payment innovations like buy-now-pay-later (BNPL) and Pay by Bank have radically altered the checkout experience, while Open Banking and emerging technologies such as AI enable more convenient and secure payment experiences. 

However, consumers are facing a confusing array of cashbacks, discounts and loyalty features from banks, payment providers and merchants, and alternative payment methods are challenging long-standing offerings built around credit and debit cards.

On March 21, 2024, in partnership with FStech, Ciklum hosted a Payments Innovation Breakfast in London. Industry experts gathered to discuss the current payments landscape, strategies for managing changing consumer habits and expectations, alongside the foundational shifts brought about by Open Banking and AI. 

The briefing covered a broad spectrum of topics, from the transformation at the checkout to the emerging challenges and opportunities within the financial sector.

Here are the key takeaways:

1. The Era of Open Banking:

Imran Gulamhuseinwala’s keynote speech, highlighted Open Banking's rapid growth as both an opportunity and a challenge. He emphasized its potential to transform both personal and business banking, while also noting the hurdles related to consumer adoption and regulatory compliance.

Whilst there is widespread Open Banking coverage, low adoption and public trust remain issues, especially while there are still gaps in consumer protection. On a broader scale, the topic of Open Finance also surfaced in discussion. At a time when people are increasingly keen to understand their financial footprint, Open Finance’s evolvement off the back of Open Banking will be prominent in the near future.

2. Addressing Cybersecurity in an Open Ecosystem:

A major topic of discussion centered around the new fraud and cybersecurity threats emerging from an increasingly open and instant payments ecosystem. The panel underscored the need for robust security measures, including advanced encryption and fraud detection algorithms, to protect against data breaches and ensure consumer trust. With Generation Z increasingly prioritizing trust and security over speed and ease of use, deploying AI as a tool for fraud protection and prevention is vital, especially for Authorized Push Payments.

3. Learning from Global Innovators:

Panelists explored innovations in consumer payments on the global stage, citing examples like the widespread adoption of mobile wallets in India, and Finland’s push towards a cashless society through direct banking. These discussions highlighted the importance of all institutions drawing lessons from these markets to foster innovation and enhance competitiveness.

4. The Future Shaped by Emerging Technologies:

The briefing also explored the potential impacts of new technologies such as real-time payments, cryptocurrency, and central bank digital currencies (CBDCs) on consumer payments. Experts debated their implications for financial institutions, focusing on the need for agility in adopting these technologies to stay ahead of consumer expectations. The consensus was that CBDCs could soon become commonplace, but will complement standard fiat currencies rather than replace, while further embedding payments in social media will also gain traction.

5. Future-proofing Financial Institutions:

A recurrent theme was how financial institutions can prepare for future innovations, not just technologically but also culturally. Suggestions ranged from investing in digital infrastructure to fostering a culture of continuous innovation and adaptability, ensuring that organizations remain relevant in a rapidly evolving landscape. 

In summary: An open future

From the keynote and panel exchanges, it's clear that the payments field is on the brink of transformative changes. Innovations like mobile wallets, buy-now-pay-later schemes, and the advancements promised by Open Banking and AI are setting new standards for convenience, security, and consumer engagement. Yet, as these technologies advance, the financial sector must also address emerging challenges head-on, from cybersecurity threats to ensuring inclusivity and trust in digital finance.

The event's takeaways emphasize a balanced view: while there are hurdles to overcome, there's a tangible path forward driven by innovation, collaboration, and a deepened understanding of consumer needs.

Want to drive new Open Banking solutions? Need help with your underlying technology stack? Get in touch with Ciklum’s expert team today and let’s discuss your specific use cases and requirements.


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