tomorrow’s transactions today ICCI Conference, Sofia Increasing customer relevance for banks Douwe Lycklama – 24 October 2014
Douwe Lycklama increasing customer relevance for banks
Jun 18, 2015
Innopay payments market overview 2014
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tomorrow’s transactions today
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ICCI Conference, Sofia
Increasing customer relevance for banks
Douwe Lycklama – 24 October 2014
2 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Innopay: independent management consultants specialized in digital strategy and transformation
• Founded in 2002
• Partners: Shikko Nijland & Douwe Lycklama
• HQ in Amsterdam, NL
• 17 consultants
• Active in transaction and service oriented sectors throughout EU
• Member of a.o. EBA, ECP/EPN and EPCA
3 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Experts in transforming today’s complexity into business opportunities
Business
Technology
Rules & Regulations
4 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Customers share their ‘digital attention’ more and more
5 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Public and private services in digital transformation
Government
Utilities
Web merchants
The European 2020 initiative promotes cross-border digital transformation E.g. Tuscany goes fully digital, PEPPOL as pan-EU e-procurement
Merchants can use customer intelligence for a customized retail process
Germany’s e-energy network: a new ICT-based "energy marketplace”
Banks Financial services being innovated by non-bank players across the globe
6 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Small screen: no ‘conversion killers’ allowed
7 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Transactions:
crowded
place?!
8 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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The foundation of electronic payments …
Bank buyer Bank seller
Seller Buyer
9 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Pay platform ‘on top of’ banking infrastructure
Bank buyer Bank seller
Seller Buyer
Pay platform
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PSP adding simplicity
Bank buyer Bank seller
Seller Buyer
Pay platform
PSP
11 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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‘Mobile era is here’
Bank buyer Bank seller
Seller Buyer
Pay platform
PSP
Pay app
Pay app
12 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Online platforms: the continents
Bank buyer Bank seller
Seller Buyer
Pay platform
PSP
Online platform
Pay app
Pay app
13 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Mobile drives usage
Bank buyer Bank seller
Seller Buyer
PSP
Online platform
App
Pay app
Pay platform
Pay app
Pay app
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Ecosystem ‘replicated’
Bank buyer Bank seller
Seller Buyer
PSP
Online platform
App
Pay app
Pay platform
PSP
Pay app
Pay app
15 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Will new technology push disintermediation?
Bank buyer Bank seller
Seller Buyer
PSP
Online platform
App
Pay app
Pay platform
PSP
Pay app
Pay app
16 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Processor landscape disruption?
17 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Banks have a hard time keeping up with the pace
18 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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PSD2 is asking more from banks
In time & real time More & more; never enough
Easier
19 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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... and redefine the acquiring domain in the payment value chain ?
Source: Innopay analysis
New XS2A model: entry of TPPs
Browser Webshop
Routing Service
Cre
dit
or
acc
ou
nt
Scheme & Directory Sc
he
me
Messaging (in scope)
Regulated domain
Cre
dit
or
acc
ou
nt
‘Standardized API’
Deb
tor
acc
ou
nt
Debtor Creditor
‘TPP’ Online pymt provider
Account servicing
PSP
Acquiring PSP
Traditional 4 corner model
Browser Webshop
Online Banking Routing Service
Deb
tor
acc
ou
nt
Cre
dit
or
acc
ou
nt
Scheme & Directory
Messaging (in scope)
Traditional scheme
Secure messaging
Account servicing
PSP
Acquiring PSP
Creditor Debtor
Sch
em
e
Online pymt provider
20 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Half full vs half empty
2014 20XX
Resistance is futile; take a venturous approach
Growing transaction market for both payment & non payment
transactions
A bright customer’s perspective
21 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Do not waste a good regulation
“Never let a good crisis go to waste”
-Sir Winston L.S. Churchill
regulation
22 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Banks traditionally focus on transactions... ...but there’s more to gain at the ‘check in’
Today’s focus
Orientation Selection Delivery Customer Care Transaction
Check in
Tomorrow’s opportunity
eID
nex
t re
ven
ue
dri
ver
• More transactions • Banks’ opportunity
to be(come) relevant
23 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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… it’s already happening
Being part of another party’s process is all about
1. Check-in 2. Convenience 3. Security
24 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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The API economy is normalizing
25 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Digital Identity: banks are well positioned
Trust of the consumer
Have invested in infrastructure
KYC
(Looked in the eyes first)
26 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Digital identity:
the mother of all
transactions?!
27 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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What can banks offer with Digital Identity
Trust Compliance Convenience
28 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Increasing relevance for both payers and payees
ProvenbusinessmodelinTheNordicswheregoverment&businessesareunitedbybanks
Buyer Seller
Similarbusinessmodelasinternetpaymentproviders(Trxfee€0.10-0.15)
Issuer Acquirer
29 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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30 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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# A
uth
enti
cate
d t
ran
sact
ion
s
2014 2020
Non-payments
Payments
Market for ‘other’ transactions booming: • Personal data • Contracting • Sign up • Login
Market for payment transactions stable
Private
Government
Identity transaction-market about to explode
Private sector will drive numbers, government catalyzes
31 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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The land rush for relevance is happening nów… …and banks are not the only providers
32 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Banks are not alone in the Digital Identity space Banks: customer ownership, trusted relation, strong credentials,
Telco’s: customer ownership, access to trusted device
Social media: lots of data on consumers ‘Omnipresent’
Identity specialists: technology, B2B relations
Postal services: leveraging physical network, brand
Merchants: customer knowledge, brand, shopping experience
33 Increasing customer relevance for banks. Douwe Lycklama – 24 October 2014. © Innopay BV. All rights reserved.
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Five tweet summary .... (instead of Haiku)
1. Banks have increasing competition for #customer #attention and trust
2. #Banks reintermediate into customer’s daily lives
3. Newcomers and regulators press for #payment innovation #psd2
4. Never waste a good regulation: banking sector enters the #APIeconomy #psd2
5. #Digital #Identity = the new money: from product centric to customer centric #relevance up! @dgwbirch
tomorrow’s transactions today
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Thank you
For your attention [email protected]
+31 20 6580651 www.innopay.com
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Douwe Lycklama, [email protected], +31 655 711 150
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