Mark Carter, VP Product Mobile at Skrill, discusses the outlook for mobile payments
Digital banking on the up
It’s no longer a question of how and when mobile will emerge as a payments platform; it’s more a question of what’s next for mobile as it begins to firmly cement its place within the payments industry. The habit of researching products on a smartphone and paying for things on a tablet is already common place, with the development of larger screens and optimised websites making it easier than ever to pay for things and bank on the go.
The latest BBA (British Bankers’ Association)1 report compiled the industry figures on digital banking and found that the number of mobile phone banking transactions made by British consumers nearly doubled in the UK last year. Customers are now making more than 5.7 million transactions a day using smartphones and other Internet-enabled technologies.
The BBA report also highlights that how we are choosing to bank has changed. Customers of Britain’s five largest banks used their smartphones for more than 18 million transactions per week in 2013. Furthermore, over 12.4 million customers have downloaded their bank’s app.
There is clearly a convenience element of being able to manage your account on the go. Therefore, banks will need to deliver additional ‘value added services’ on top of everyday banking in order to drive consumers to use their banking app as their primary mobile payment application. Barclays is leading with Pingit, but Zapp’s recent announcement of their partnership with FEXCO’s Flashiz shows a growing push into the mPOS space.
Tech players enter the game
With these points in mind, it’s no surprise forward-thinking businesses are continuing to make payments as easy as possible for shoppers and merchants, in physical stores and on the move. For example, Apple has already begun to disintermediate payments providers with its iTunes wallet where users of the music store think they are buying with their iTunes ‘account’ rather than their Visa/MasterCard. Then of course, there is the launch of iBeacon. The accessibility and intelligence of this technology compared to Near Field Communication (NFC) payments, leads me to think that the latter won’t achieve widespread customer adoption. In a world where usability and simplicity contributes significantly to take-up, the requirement of the physical ‘tap’ against the card reader to complete the transaction limits potential. In comparison, iBeacon uses Bluetooth Low Energy (BLE) so more data can be communicated over a much wider distance. And with the arrival of wearable tech, there is no need to take the phone out of your pocket.
iBeacon is only one example of a line-up of new products and services on the market that let consumers pay for products using a digital wallet instead of a card or cash. For instance, Starbucks says that last year more than 26 million in-store transactions were paid via the Starbucks Card mobile app, with customers able to use their phones and tablets to make purchases over 9,000 locations at the press of a button.
One concern for consumers is the issue of security and trust when paying for things on the move, worrying that sensitive financial information isn’t as secure when paying via a mobile device as it is on a laptop or PC. However, you could argue that the technology companies driving these new forms of payment are potentially more adept and informed at dealing with cyber threats and are likely to build products thinking about security right from the very beginning.
Innovations from companies like Square/Stripe and Starbucks mean the payment space is being blown wide open, with the future of mobile looking to become savvier, securer and more frictionless than ever before. However, nobody has really rethought the payment flows or challenged and addressed simplified account opening, verification, Know your Customer (KYC) and how the mobile device itself can support all these issues to deliver a fully optimised solution. Maybe Apple might just help to drive this.
The new mobile generation
There is an evolving shopping ecosystem, with the high street, online and mobile co-existing to deliver an all-round experience and a new generation of shopper is emerging. This new, always on and always moving consumer is combining their mobile device with the real life high street and Internet to create an alternative retail checkout process that meets their individual needs.
Only recently, Viacom business Scratch found that one third of ‘millennials’ (those born between 1981 and 2000) think that in five years’ time, banks will be superseded by tech firms when it comes to managing their money. It’s those generations who will drive companies to keep money mobile as customers, understandably, expect to make transactions as quickly and easily on the screen of their mobile or tablet device as they would on their desktop.
I believe the biggest opportunity ‘tech’ companies have here is that they are light years ahead of banks and legacy financial service organisations in terms of anticipating consumer needs and delivering those needs in a compelling way. Yes, there may be trust and security concerns but they also apply to those institutions that currently hold the majority of my money. If you ask someone to draw their money, they won’t draw a five pound note, they will draw their house, their car and so on. It is these things that are important so if we can help to service and manage those needs and provide integrated experiences delivered through mobile, then we are well on our way. Imagine a world where you can buy a TV using your mobile device? Where the online store knows you are at home, asks how long you will be there and then can deliver the product in the same day? The receipt, warranty, instruction manual are all delivered to your online portal where everything important is stored and where you can review easily at a glance. It’s not a bank but it’s a whole lot more relevant and useful to our lives today.
Integrating mobile into your business strategy
Considering the recent research and statistics, businesses have to consider how mobile will fit into their strategy. If a payment company fails to embrace mobile, it will no doubt fail to reach consumers and merchants, both on and offline. Consequently, it will be at risk of being overtaken by those companies who realise that fast and easy payments are essential.
We are already seeing a new approach to mobile payments developing within mobile apps and this is certainly a key focus for Skrill. We are innovating with the sole focus on making payments easier for our consumers both online and mobile, how we drive mobile conversion for our merchants and are exploring new approaches to the traditional methods of paying and being paid. It’s a fast-evolving market, but for us, working to design and deploy technology to improve the customer experience and simplify money management on the move can only be enhanced by other vendors shifting consumer transaction habits from physical payment methods to digital.
So, what next beyond mobile? With businesses constantly looking to deliver more functionality, we can definitely anticipate the evolution of mobile into wearables. Only recently, Samsung released its Gear 2 watch with the ability to download an app to pay for items across merchants, to redeem offers and to send money to friends instantly and securely. This is just one example of how brands are beginning to focus on making wearable technology that will incorporate payment on the move. Perhaps the ease of paying for something using a watch will encourage adoption even more.
We are not saying mobile banking will be the end for bank branches. Yes, the Internet and optimised websites have certainly changed and shaped people’s opinions on how they shop and bank. However, the social elements of the high street and being able to speak to someone face-to-face will always have some value with the consumer. More than anything, it is relevance that matters here and how many of a bank’s products are relevant to the young? Well, not many, and those that are are designed from a monetisation first perspective, not from a deep understanding of that consumer-base. In my opinion, digital wallet providers have a huge opportunity to engage with consumers in a relevant and rewarding way. Done well, this could well stem the flow of ‘follow my parent banking’ that persists today. For me, the future is definitely looking mobile.
1 British Banker’s Association, 31st March, BBA launches major new work on digital banking
Take Five: Davos goes virtual
It is the end of January, so time for the Davos World Economic Forum (WEF), and Chinese President Xi Jinping, German Chancellor Angela Merkel, Japanese Prime Minister Yoshihide Suga and European Central Bank chief Christine Lagarde are among this year’s big-name speakers.
But Davos was not spared the pandemic hit; instead of gathering at the Swiss ski resort, the world’s great and good will do so virtually.
With the global economy deep in crisis, there is no shortage of topics: soaring unemployment and debt levels, growing income inequality and climate change.
And, like everyone else, the WEF is pinning hopes on normality returning – it plans a face-to-face meeting in Singapore in May.
Outpaced by a late-2020 surge in so-called value stocks, tech shares have roared back amid the pandemic’s unrelenting march. That is reflected in recent hefty gains for Russell’s 1000 “growth” index versus its value counterpart.
The gains could extend when Apple, Microsoft and Facebook report earnings. Also on deck is Tesla, which recently joined the S&P 500.
The results could push the combined market capitalisation of the FAANGs – Facebook, Amazon, AAPL Netflix and Google-parent Alphabet – back above their all-time peak of $6.16 trillion.
Netflix has done its part; robust subscription numbers reported on Jan. 19 have boosted its shares 17%. Now there are high expectations for the rest. Morgan Stanley has boosted the price target for Apple, declaring themselves “buyers ahead of what we expect to be a record December quarter print”. Microsoft reports on Jan. 26, followed by Apple, Facebook and Tesla a day later.
Graphic: The return of the FAANGs – https://fingfx.thomsonreuters.com/gfx/mkt/oakpeyelnpr/Pasted%20image%201611266376120.png
3/RED ENVELOPE FOR HONG KONG
Record amounts of Chinese money are flowing into Hong Kong stocks, pushing the Hang Seng index above the 30,000 mark, making it a global top performer and putting a floor under Chinese companies blacklisted by Washington.
The inflows have also pushed Hong Kong interbank rates to multi-year lows, meaning authorities may not even need to inject cash, as they usually do in the run-up to February’s Lunar New Year holiday.
An upcoming $5 billion IPO from Chinese online video company Kuaishou may draw in even more mainland money.
For a city rocked by pro-democracy unrest since 2019, this endorsement of its markets is a positive. Unless, that is, one views this as another sign of China’s growing political and financial stranglehold on the special administrative region.
Graphic: Mainland investors hunt for bargains in Hong Kong – https://fingfx.thomsonreuters.com/gfx/buzz/xlbvgylqevq/mainland%20investors%20hunt%20for%20bargains%20in%20Hong%20Kong.jpg
4/DRIVING OUT EUROPE INC BLUES
Europe’s STOXX 600 firms are expected to report a 26% earnings drop during the Q4 season which has just got under way. But that is history – let’s look instead at the January-March 2021 season when a 44% profit jump is predicted.
Such a surge seems intriguing given new continent-wide lockdowns. The explanation lies in consumer cyclicals, which Refinitiv I/B/E/S predicts will post an eye-popping 3,118% profit gain, versus the pandemic doldrums of Q1 2020.
Drilling down to single stocks, Daimler (1,471%), Fiat Chrysler, now Stellantis (177%) and Volkswagen (602%) turn out to be the largest contributors. Carmakers have seen their biggest earnings revisions in a decade and boosting shares to 14-month highs.
Graphic: Autos – https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqmnwxvx/Autos%20hold%20key.JPG
The coming week brings prelimary Q4 GDP data from France, Spain and Germany. Okay, the data is outdated and we already know the first quarter will show an activity dip from lockdown extensions. But let’s not be too hasty in dismissing the end-2020 numbers.
If the economies fared better than expected, it provides a cushion for the blow coming this quarter – that is the conclusion some reached after 2020 growth in powerhouse Germany turned out less bad than feared.
Also pay attention to Germany’s January inflation numbers, out Thursday. Those could show that a reversal in VAT cuts is easing the downward pressure on prices. In short, amid the pain inflicted by lockdowns, some positives might well lurk.
Graphic: Germany’s GDP data set for a bumpy ride – https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgyjmmvq/theme2201DR.PNG
(Reporting by Ira Iosebashvili in New York; Vidya Ranganathan in Singapore; Karin Strohecker and Dhara Ranasinghe in London; Danilo Masoni in Milan; compiled by Sujata Rao)
Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®
Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the Year Middle East 2020 in recognition of his vision, strategy and strong leadership that have contributed greatly to Resource Group’s success in winning the Most Innovative Holding Group Middle East 2020 in this Global Banking & Finance Awards®.
Resource Group is an investment group with a portfolio of diversified businesses that capitalizes on technology and human talent for value creation. The company has proven that it has gone the extra mile to develop innovative solutions aimed at improving people’s lives and helping Lebanon transition toward a knowledge-based economy. Global Banking and Financial Review, the renowned online and print magazine identified a number of areas that Resource Group has excelled. The company has been awarded Most Innovative Holding Group Middle East 2020, and Hisham Itani the Chairman and CEO, receives the award for Technology CEO of the Year Middle East 2020. Under his leadership, Resource Group has grown from a family security-printing business to a diversified international investment group, with a portfolio of companies across 10 sectors in over 75 countries.
Wanda Rich, editor Global Banking & Finance, said “Mr. Itani took the security printing business to another level and expanded into different technology verticals in an impressive list of success stories”. The list includes digital security, smartcard manufacturing, mobile value added solutions, cyber security and secure communication solutions, telecom infrastructure and managed services, elections supply chain services, lottery systems and operations, mobile and virtual reality games, among others.
Resource Group’s focus on technology has had a constructive and tangible impact on government automation and on citizen experience in target markets.
Editor Wanda Rich says “We are proud to offer Resource Group these prestigious awards and wish them continued success and growth into 2021 during these challenging economic times”.
Global Banking and Finance Review is a renowned online and print magazine. The magazine’s website alone receives over 7 million page views annually. Global Banking and Finance Review provides a balanced view with formative and independent news from the financial community. The Global Banking & Finance Awards® were created to recognize companies of all sizes that are prominent in particular areas of expertise and excellence within the global financial community. The awards are known throughout the global banking and financial community. They reflect the innovation, achievement, strategy, progressive and inspirational changes taking place within the financial sector.
Bouncing back in 2021: Digital Transformation is no longer a choice as dependence on 5G, IoT and Data increases in society and business
By Ivan Ericsson, Head of Quality Management, Expleo Group Limited
The global pandemic has put enormous strain on businesses and brought into sharp focus the importance of being agile, adaptable and able to increase the pace of innovation and change at short notice – catapulting technology right to the top of the agenda for many organisations.
As the economy works to get back on its feet, technology is only going to play a bigger role in our lives. At Expleo, as experts in digital transformation and the reliable implementation of technological innovations, we’ve outlined the biggest tech-driven trends that we expect to see in 2021 and beyond.
1) “Digital transformation” no longer a choice
If the COVID-19 pandemic has taught businesses anything, it’s that they need to be poised to respond to abrupt market disruption at any moment, making digital transformation mandatory overnight.
With no room for delay, hugely complex corporations – that have historically been slow to adopt technology – have had to accelerate their reliance on technology just to keep afloat in recent months. Digital change, at speed, has become the norm.
Even last year, the idea of an unscheduled video conference call might put people on edge – now most of us wouldn’t think twice about calling a colleague over Teams or Zoom even for a 2-minute conversation. At the same time, social infrastructure has moved with the needs of its users, with telecoms giants strengthening and opening up networks so we can keep communicating despite social distancing.
There are now very few excuses left for operating in a non-digital way. All businesses need to be intelligent businesses that can change direction nimbly, with speed, confidence and composure. As we see more businesses putting this into practice, it’ll likely result in an increased number embracing and normalising some of the behaviours of tech-savvy giants like Apple and Amazon, who have no doubt thrived during this period.
Their success can largely be attributed to normalising an agile approach. By ensuring all applications have testing facilities built in – a “quality shadow” if you will – it allows for continuous improvements, and the ability to change direction quickly and confidently, when needed. This is particularly valuable today as the world becomes more fast-paced and increasingly unpredictable.
2) Big data/AI/predictive analytics
We’re moving into a space where big data can be extracted from the most seemingly innocuous places. In a hyper-connected world, a move as simple as a dog walk could offer huge swathes of data to the right companies. Many businesses already realise the benefits of capturing and utilising big data, but not all have taken advantage of it. The businesses that move quickest are most likely to reap the rewards in a more impactful way than their ‘data shy’ competitors. Where data used to be a side effect of business operation, it is now the driving force.
As businesses begin to rely more heavily on data to make critical decisions, independent assurance becomes increasingly important to get those decisions right. Forward-thinking, data-driven organisations must therefore assure that the data is correct in the first place, to avoid giving businesses false confidence and risk them moving in the wrong direction – something that is rarely affordable in today’s competitive and fast-paced environment. If businesses are not 100% confident in assuring the quality and accuracy of their own data, they should look to a third party for support.
A key data trend we expect to see moving further into 2021 is the increased use of predictive analytics. At the moment, businesses will often use data analytics to give us insights into our past activities, or to tell us where we are right now. However, the real value lies in knowing where we are going and how we are going to get there. Data analytics will help to identify the optional levels that can be pulled to drive change and realise business benefit.
Secondly, as intuitive technology advances and becomes more accessible, we expect over the next 12 months to see companies of all sizes begin to adopt artificial intelligence (AI) to drive intelligent analytics. In this context, AI refers to various technologies that allow machines to learn, sifting through ‘messy’ big data in order to find and unlock valuable predictive insights into future events. This allows businesses to better adapt their strategy to likely future outcomes and get a head start in the market.
However, with this ever-increasing emphasis on data and data protection, ethical AI will have a more prominent role to play in 2021 and beyond. Protected, usable Data is a by-product of good data security and privacy measures; however, the public remain wary of how their data is being used, particularly after the fallout from Cambridge Analytica’s use of data to influence an election. Businesses, therefore, must give their customers confidence that their data is secure and protected.
3) Moral relevance/corporate altruism
Research shows that young people are increasingly researching and considering the ethics of brands they’re purchasing from. And it won’t be long before this attitude starts seeping into every other aspect of their lives, with more and more people wanting to work for what they consider to be “purpose-driven” businesses.
Talent is the lifeblood of any company, so for big corporations, many of whom were born to create profit, this could put them in a tricky position. They might already be influencing society in a positive way – but this is unlikely to have ever been their main goal.
Moving forward, however, all organisations will have to start thinking about the “Triple Bottom Line”. That means considering the environmental and social impact of your business, alongside your commercial imperative.
We’ll soon see a mindset switch across businesses, from ‘competing’ to ‘advancing’. Instead of wanting to be the “best,” the question will be, how can I better serve the world around me?
In line with this, businesses will have to start thinking more about how to use tech for good, as we’ve seen with the likes of Microsoft Teams connecting tens of millions of people every day, during this very dark time.
2021 is likely to bring even more inroads when it comes to using technology to improve society, whether it’s developing bespoke problem-solving technologies or using IT to ‘eco-proof’ existing sectors, the goal for businesses is to rise to this challenge and build a better future for people and the planet through the use of technology. But all organisations will continue to need to be able to justify technology use and prove that they’re using it ethically, and in a secure manner.
4) 5G new networks – just about all big trends are driven by/reliant upon faster networks – particularly relevant for a more distributed workforce
Greater access and utilisation of 5G networks across the country will underpin and accelerate all of the key trends discussed. Everything we do on our smart devices we can expect to do at higher speed, greater capacity and with lower lag times.
As our digital footprints extend beyond simple web browsing and into our daily lives through smart technology, we are creating huge amounts of data every minute. This vast flow of data is increasingly dependent on new high bandwidth networks to facilitate it. Therefore, the merging of technology and engineering will become critical in ensuring big data is carried successfully to drive analytics and drive business.
The fact we have managed to successfully work from home during COVID is a glowing recommendation for the quality of the networks as they exist today, and they will only get better.
The telecoms industry is already working overtime to ensure that people all over the country get reliable access to the internet – and the fact that there is still inequality in this area proves just how challenging this is. But, in line with this trend toward hyper automation, which will make data extraction and analysis a part of everyday life for businesses, the consolidation of tech and engineering will be ever more important.
Forward-thinking companies will look to incorporate 5G networks into their business strategy. This could be from an internal perspective to enhance the abilities of their remote workforce. Alternatively, this could relate to their own products or offerings – developing an internet of things (IoT) strategy, improve user experience, or bring products to market faster by analysing big data and adapting quicker. Either way, with increasingly improved networks, businesses are expected to take advantage of the huge increase in accessible and usable data.
For businesses to truly reap the benefits of these new technologies, they must be developed and adopted in the right way.
Quality assurance, trust and security are three key requirements that the technology of the future depends on to succeed. Having these requirements at the heart of any digital transformation will ensure that systems perform reliably, having been tested and assured.
By prioritising a seamless customer experience combined with an ability to create, test, and scale digital solutions and operationalise at pace, businesses will be in the best possible position to take advantage of the potential being unlocked by these new technologies.
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