Global Financial Services Market IntelligenceStrategic Analysis Group
Top 10 Trends in Payments – 2017
2Global Banking and Payments Trends_v1 0
Global Financial Services Market Intelligence
Adoption of digital payments is on the rise with wallets, cards, and mobile becoming
mainstream
$426.3Billion
$12.2 Billion
Volume of contactless payments is forecasted to grow nine fold by 2020
Projected global digital payment volumes in 2015
Increased Adoption of Contactless Payment
Enabled DevicesRetailer/Merchant Obligations
Customer Demand for Speed and Convenience
Source: Capgemini Financial Services Analysis, 2016“Digital Disruption Brews In Financial Data, Digital Identity, And Payments, 2015,”, Forrester; "Global Digital Payments to Reach $36 Trillion", Juniper Research, 2016
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Global Financial Services Market Intelligence
Instant payments are potential alternative to existing instruments while a few challenges
still exist
Euro Instant payments will revolutionize payments across 338.3 million people
and 19 countries
Changes to Operating Models
Investments Made in Existing
Infrastructure
Cross-Border Interoperability
Handling Inter-Bank Settlement Risk
Source: Capgemini Financial Services Analysis, 2016; "Instant Payments-The Longer View", European Payments Council, 2016, http://www.europeanpaymentscouncil.eu/; http://www.treasury-management.com/article/1/362/2987/instant-payments-the-longer-view.html
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Global Financial Services Market Intelligence
Banks need to adopt a transformational approach to address the dynamics of
regulatory landscape
Transformational approach will help banks to move towards integrated risk and governance
models
Provide Value Added Services to Clients
Enhanced Decision Support Systems
Slower Progress in Holistic Compliance
Complexity in Regulatory Compliance
Source: Capgemini Financial Services Analysis, 2016; “Building a transformation vision”, 2016, http://www.bankingtech.com/250742/building-a-transformation-vision/; World Payments Report, Capgemini and BNP Paribas, 2016
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Global Financial Services Market Intelligence
RegTechs and regulatory sandboxes emerge as key themes
Increased Focus of Banks towards Holistic Compliance Initiatives
Emergence of Niche Firms within FinTech Segment with Technology Solutions for Regulatory Compliance
Change in Regulatory Approach Globally, with a Focus on Fostering Innovation and Reducing Cost of Compliance
$118.7 Billion
Global demand for regulatory, compliance, and governance software expected by 2020
Source: Capgemini Financial Services Analysis, 2016; "Regulatory sandbox", Financial Conduct Authority, November 2015, https://www.fca.org.uk/news/regulatory-sandbox; “Regulatory Sandbox: Discussion Paper”, July 2016, http://www.bnm.gov.my/guidelines/50_others/dp_regulatory%20sandbox_July2016.pdf
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Global Financial Services Market Intelligence
Instant payments and Basel III norms could trigger changes in liquidity management of
banks
Instant Settlement Arrangements
FX and Money Market Management
Improve Liquidity Shorter Reconciliation Times
70%Target LCR Ratio for 2016 is set at 70% with phased implementation for 100% by 2019
Source: Capgemini Financial Services Analysis, 2016; “Key Emerging Trends in the Payments Industry”, July 2016, https://www.trxservices.com/blog/key-emerging-trends-payments-industry/
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Global Financial Services Market Intelligence
Technology and regulatory initiatives are inducing transformation in Cross-border
payments domain
$582 Billion
$85 Trillion
Global trade flows are expected to triple by 2025
Global international remittances in 2015
Thriving Opportunity in Emerging Markets
Focus on Payouts/Settlements
Shift Away from Manual/Batch Processing
New Operating Models in Trade Finance
Alternative Solutions for Network Rails
Source: Capgemini Financial Services Analysis, 2016; “Trade in goods and services has fluctuated significantly over the last 20 years”, World Trade Organization Statistics, 2015; “Bringing Emerging Markets Into the Flow”, www.thefinancialist.com
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Global Financial Services Market Intelligence
FinTech activity in corporate and retail domain can disrupt payments analytics and
authentication
Focus on Authentication &
Data Security
Decision Making Capabilities
Demand for Innovation
Need for Analytics Based Solutions
79%Bank executives view FinTechs as partners as per WPR 2016
Source: Capgemini Financial Services Analysis, 2016; “Yodlee’s FinTech Influencer Survey”, https://www.yodlee.com/blog/global-fintech-survey-results-51-experts-reveal-2016-trends/February 2016; Executive Interviews for WPR 2016 ; Online Survey for WPR 2016 ; Total 124 responses received
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Global Financial Services Market Intelligence
Adoption of Open APIs is Leading to Paradigm Shift in Payments
Demand to Build Innovative Solutions
(SVB)
Win-Win Situation for both Banks and TPPs
Regulatory and Industry Push (PSD
II, OBWG)
Improved User Interface for Customers
Commoditization of Bank Offerings
Reduced Cost for Providing New
Services
15000Number of Registered Public APIs grew more
than double in 2015 from7000 in 2012
Source: Capgemini Financial Services Analysis, 2016; “APIs – what do they mean for payments?”, April, 2016, www.paymentsuk.org.uk; “Indian banks testing blockchain, AI, biometrics, open API and payments”, September, 2016, www.biomtericupdate.com
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Global Financial Services Market Intelligence
Security and Authentication are the Top Priority for Firms
Increased Card Fraud
Higher Adoption of Digital Payments
Open Banking Initiatives
Increased Threat of Cyber Crime
$16.3 Billion
Losses from worldwide fraud on credit cards, debit cards, and prepaid cards in 2015
$7 Billion
CNP based fraud in the U.S. is expected to reach $7 billion by 2020
Source: Capgemini Financial Services Analysis, 2016; “The True Cost of Data Breaches in the Payments Industry”, 2015, Smart Card Alliance, http://www.emv-connection.com/downloads/2015/03/The-Cost-of-Data-Breaches.pdf
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Global Financial Services Market Intelligence
Real-Time Processing
Requirements
Convergence of Payments
Instruments
Front-End Innovation
Legacy Infrastructure Modernization
25So far, only 25 countries representing 45% of global credit transfers have begun to modernize infrastructures
Transformation of back-end payments systems is still high priority
Source: Capgemini Fin ancial Services Analysis, 2016; “The Payment Processing Industry is Undergoing Seismic Change”, 2016, https://www.vantiv.com/vantage-point/payments-basics/current-trends-in-payment-processing-industry
The information contained in this presentation is proprietary.© 2013 Capgemini. All rights reserved.
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