By Sophie Bottazzi, Senior Research Executive, CeFPro

The payment industry in Europe continues to evolve with the huge influx of new payments providers in the market, increased regulatory demand and evolving customer expectations of products and services. With the implementation of PSD2/Open Banking becoming more embedded, the payments landscape continues to evolve as APIs open up customer data for more institutions to leverage. With such increased demand and competition comes heightened regulatory scrutiny to ensure compliance and safety and soundness across the industry. The delays to secure customer authentication requirements introduce additional fragmentation across jurisdictions as many look to implement the standards to varying interpretations and deadlines.

With this in mind, the Center for Financial Professionals conducted an extensive research project with financial institutions, FinTechs, regulators and payment service providers to gain an insight into the key trends and challenges across the industry. The results of the research project are demonstrated at the upcoming 3rd Annual Payments Summit, taking place in London on 11-12 February, 2020. Thought leaders across the industry share insight on a range of current challenges and opportunities to enhance communication and collaboration and drive innovation agendas. Below are some of the key areas highlighted during the research, for full information on the final agenda please visit: https://www.cefpro.com/payments

From CeFPro’s research it is clear there are still lessons to be learned and discussion to be had surrounding the implementation of PSD2 and Open banking as institutions across Europe await the full extent of the impacts across the industry. Secure customer authentication requirements remain uncertain as delays across the industry raise additional questions around expectations and timelines. Institutions continue to grapple with balancing customer satisfaction and meeting regulatory demands and the need to authenticate customers and devices. Questions remain uncertain surrounding the degree of authentication required, the frequency of which it is required and how security measures can be implemented without impacting the customer journey. The immediate impact of PSD2 originally feared by many institutions did not come to fruition, many are not leveraging the potential of open APIs and the long terms impacts remain uncertain.

In a world of continued digitalisation of both institutions and consumers, the threat of cybersecurity has never been more prominent. Institutions remain vigilant to mitigate the increasing fraud and cyber security risk. The above-mentioned challenge of balancing customer experience and security remains with cyber risk and ensuring accessibility to digital services alongside protection of data and assets. As the digital landscape continues to evolve and products and services diversify, institutions open up additional vulnerabilities and opportunities for criminals to gain access, therefore safeguards must continue to be put in place to maintain security across the institution. Alongside internal safeguards, education of customers is also vital, ensuring customers are exercising caution with online activities and security. As the global landscape continues to rapidly evolve and expand, cyber security and its risk evolve further and pose an increased threat to an institution, its customers and reputation.

Finally, an exciting opportunity across the industry is the trailing of Request to Pay services and the future of direct debits. Request to Pay is being trialled by a number of larger financial institutions with the view of turning direct debits into a thing of the past and instead requesting funds from the customer. The new payment process looks to revolutionise how bills are paid and limit defaults on loans to open up dialogue between the institution and customer. The scheme is one which is completely new and as yet untested by institutions and customers. Institutions are investigating the introduction of Request to Pay and interaction with regulatory requirements and new payments architectures. The scheme could have impacts across the payments industry and merchants, with significant cost reductions to customers and communication to limit default charges or late payment fees. Request to Pay remains an area of interest for institutions to explore as the future of payments and direct debits.

The 3rd Annual Payments Summit looks to address the above challenges and much more, and provide a platform for best practice and idea sharing to enhance collaboration and communication. The findings of this research will be illustrated on February 11-12, 2020 at The Centre for Financial Professionals Payments Summit in London. We invite you to join your peers for two days to discuss upcoming payment trends, technologies and regulatory requirements including PSD2, SCA, Open Banking, Instant Payments and Request to Pay.
The agenda can be viewed at www.cefpro.com/payments

For further information, please get in touch with a member of the team on +44 (0) 207 164 6582

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