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Incremental Innovation – Evolving in a Changing Payments Landscape

Incremental Innovation – Evolving in a Changing Payments Landscape

Rapidly Changing Payments Landscape

Payments are experiencing many evolving trends which are disrupting and reshaping the payments landscape. The highly competitive financial industry is faced with a level of constant change which h​as forced organizations to adapt at a pace which has never been seen in their history.

Consumer sophistication and payments convenience expectations are evolving at record levels. Payment channels are increasingly leveraging new technological advances and consumers are eagerly adopting alternative payment instruments other than cards.

Organizations are facing increased competition where speed to market drives market share. Highly agile non-traditional organizations are bringing innovative payment solutions into the market which threaten traditional financial organizations and force collaboration with new and innovative payment channels.

At the heart of the problem is many traditional payments organizations are faced with aging legacy systems where rapid and cost-effective adaptation is not easily accomplished. However, there is one underlying theme all organizations must face:

In order to compete you must adapt…

Pick the Right Strategy

The key to rapid and cost-effective adaptation is a solution which empowers organizations to quickly enable responsive and innovative solutions to address ever increasing payments market pressures. But the migration of complex legacy systems often seems quite daunting and organizations frequently struggle with how to proceed with such complicated replacement strategies.

Some market pundits recommend a complete technology rip-and-replace to solve the legacy system issues and shortcomings. This approach frequently results in multi-year projects, higher cost, and a greater level of risk to an organization’s core business by adopting an all-or-nothing migration strategy.

Incremental Innovation is a more realistic approach. Identify key pain points which need the most immediate attention while maintaining the longer-term vision for a full technology replacement. Addressing immediate pain points through strategic technology replacement allows organizations to see incremental successes through more manageable phases. This allows organizations to gradually replace their complex legacy systems while protecting and enhancing their businesses.

Evolving Through Incremental Innovation

The key to incremental innovation is to choose a replacement solution which will solve the immediate pain points while providing a platform which may replace all the complex requirements of the legacy system over time.

Financial institutions should adopt incremental innovation strategies with the goal of deploying future-proof solutions which allow them to expand technical capabilities to meet the ever-growing demand for evolving consumer-centric solutions. Euronet’s REN Innovation Ecosystem is a modern, future-proof, and flexible solution which allows organizations to adapt as the payments landscape evolves.​

Categories Uncategorized Author Otto Mated

Open Banking – Empower Consumers Through Innovation

Open Banking – Empower Consumers Through Innovation

The Open Banking Revolution

Open banking, the ability of third-party applications to access consumer banking and financial accounts using Application Programming Interfaces (API), is becoming a major source of innovation and is poised to reshape the competitive landscape of the banking industry.

By networking accounts and data across institutions for use by consumers, financial institutions, and third-party service providers, the consumer benefits from a seamless and transparent banking experience.

Competition Creates Opportunity

Financial institutions have long held a monopoly over their consumer data. This data control, once a competitive advantage, is a hinderance in the era of Open Banking.

It’s critical that we view Open Banking as an opportunity, not a threat. It invites openness and innovation among financial institutions which will benefit the consumer. And Open Banking is not just a benefit to consumers. It will cause large, established institutions to compete with smaller, more nimble banks and FinTechs, resulting in lower costs, better technology, and a more seamless and integrated customer experience. Financial institutions can take advantage of this new technology to strengthen customer relationships and customer retention by becoming an active partner in managing consumer’s finances rather than acting simply as a transaction processor.

Legacy Systems & Incremental Innovation

Legacy financial systems may present a barrier to innovation since these systems may not be well positioned to address Open Banking strategies. Financial institutions will need to address limitations within their current systems and invest to adopt new technologies which allow them to compete.

Incremental Innovation allows financial institutions to deploy next generation solutions which are better suited to address speed-to-market needs of an effective Open Banking model. These API Gateway solutions integrate with legacy financial systems to allow improved speed-to-market while reducing risk to legacy systems and traditional financial services.

Pick A Strategy

Financial institutions should define incremental innovation strategies with the goal of deploying future proof API Gateway solutions which allow them to expand technical capabilities to meet the ever-growing demand for consumer-centric solutions. Euronet’s REN Innovation Ecosystem is designed to meet these ever-changing needs.

Categories Uncategorized Author Otto Mated

ATMs and the Next Generation

ATMs, initially designed to dispense cash, have greatly expanded services over time. Cash and check deposits, transfers, ordering of checks or statements, and FX currency dispensing all connected the customer to an increasing number of banking products and services.

Connection to a larger payments ecosystem followed with the introduction of utility bill payments, remittance, charity donations, prepaid airtime and digital wallet top-up.

Today, the ATM is a marketplace for a host of non-traditional banking services, enabling the user to purchase digital content, lottery, event and museum tickets, as well as transportation passes. At the same time, ATM screens have found their place in the world of advertising, displaying generic or personalized – often interactive – targeted messages to users.

These enhanced services attract new consumer market segments of digitally savvy individuals who view the ATM as a one stop shop, fulfilling multiple payment needs, banking or retail, at home or when traveling.

Globally, Gen Z users come to expect these ATM transactions. They receive or transfer money, buy digital content, pay bills, buy airtime, and travel the world. When transacting, they appreciate the practicality and speed of diverse digital channels. Innovative ATMs fit well with the Gen Z profile as a fast and reliable hub to a variety of everyday activities or special experiences. The ATM underlying technology is also rapidly evolving, transitioning from cards to mobile phones and from PIN security to biometrics, in line with Gen Z preferences.

Financial institutions and ATM operators who embrace diverse transaction capabilities and cutting-edge technology on their terminals will succeed in attracting the next generation to the ATM and enhance their presence and brand identity in the payments landscape of tomorrow.​

Categories Uncategorized Author Otto Mated

Trends that shaping the Payments Industry

In reviewing industry expert’s assessment of current trends, we see similar themes emerge: the rise of contactless payments and the decline of cash payments; cross-border payments increasing, while payment saturation rises; fraud protection. The last few years have witnessed a meteoric rise of fintechs.

All of this, perhaps, guided by Young Millennial and Gen Z’s impact on the payment culture and the ever available smartphone. These consumers just want a seamless, painless, payments journey. Banks and fintechs will have to adapt to the expectation for speedy and intuitive payment methods in order to capture the short attention span of consumers.

But across all these trends, what are the ones that will most affect our customers? We think it boils down to these three “mega-trends”:

    • Simplify Your Modernization – Moving to an open and agile framework is critical. However, the safer, more measured response to Rip and Replace is adapting to the new consumer expectations through incremental change via a microservice and API-focused architecture. This allows FIs to migrate to more nimble solutions through bite-sized chunks rather than completely starting over from scratch without major reprogramming or downtime. In the end, FIs will be more strategically positioned to meet the latest needs of their customers quickly.

    • Fraud protection – Much like the finance sector they infiltrate, fraudsters have become increasingly more advanced. And the influx of new payment channels has created exponentially larger amounts of data that must be protected at all costs. As consumers continue to shift their payment activity towards mobile and online channels, the importance of fraud prevention becomes paramount. And while we hear consumer’s need for speed, it shouldn’t come at the cost of security. Does speed trump security? Maybe real-time isn’t the answer, but meeting consumer’s need for convenience should be the focus.

    • Cross-border payments growth – The majority of businesses still do not sell across borders, but with exponential growth of cross-border payments and the expectation that countries will soon collaborate to write global standards, this will change. Speed doesn’t just impact domestic payments. All the improvements made to domestic payments will undoubtedly shift towards cross-border next. The days of cross-border payments being slow and expensive are behind us.

As these mega-trends further develop, the global payment landscape will continue to shift. Banks, merchants and financial services organizations will need to keep up with these profound changes. Euronet’s Ren solution supports our customers and partners in quickly adapting to changing business practices, which leads to greater efficiency, increased profitability, and a better customer experience. Ren’s focus on flexibility and industry standards makes it the ideal choice for modernizing legacy infrastructures and staying ahead of groundswell of change.

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