Insight from EBAday 2019: Our Key Takeaways in 150 Words or Less

We had the pleasure of being involved in EBAday 2019, as an associate member, an exhibitor and as part of the panel discussions. We also enjoyed the breadth of content and debate that this year’s event delivered. With so much to absorb, we thought we’d share our top takeaways from the conference:

1. Thomas Egner said at EBAday last year the rate of change has never been so fast, and it will never be this slow again. He was right. We’re only halfway through the year; complexity is increasing, change is accelerating, and what we’ve learnt from EBAday 2019 is the ride is only just starting…

2. BigTech is positioned perfectly to disrupt the industry and they’re here now. Being the battleground between the US and China, Europe is the most competitive market in the world, and BigTech is coming to win. Their deep pockets, lack of banking licences, customer centric approach and expert knowledge and experiences of change on a global scale is a threat that is already here. They may be somewhat tempered when they meet the regulators, but their internal change teams in business and technology are almost unparalleled in the speed and scale they can work. Almost poetically, Facebook announced Libra (backed by Visa, Mastercard, PayPal and many more) whilst the world’s experts in payments were attending EBAday. There couldn’t be a better example of how months of thinking, workshops, consultations between banks and regulators can be upstaged in moments. Collaboration between banks is the key to survive.

3. ISO20022 is not a format change; it is much, much more. The move to XML for SWIFT is bigger than the establishment of SEPA. The ‘grace period’ is not so much a benefit, but 4 years of managing multiple message formats. TARGET2 and Euro1 XML coming in 2021 means if you haven’t started planning now, even before all final standards are set, then you’re behind. Concurrently, a similar migration will take place in other regions worldwide, which means you’ll need to reach out to your correspondents to understand their migration strategy. You need to think of all the other projects you have in flight and consider how ISO20022 for SWIFT is going to impact them. This is going to be complex, costly and will require a high level of organisation, coordination and testing. It’s closer than you think, but don’t worry, most other banks are where you are now!

4. PSD2 is so 2018; it’s all about Open Banking.The Open Banking revolution will increase competition and change the game to put the customer first. It’s becoming less about regulatory compliance and the basis for how the banking system is going to develop. It’s not about the APIs in themselves, it’s about customer focus, customer experience and customer needs. Open Banking as an approach to using banks’ strengths mapped onto customer wants and needs is the one-way direction of travel. Stop saying “PSD2 compliance” and start saying “Open Banking strategy”.

5. A speech by Mark Carney at The Bank of England around the time of EBAday was echoed around the hall by conference delegates: The cloud is going to be safer and more stable than in-house systems. So, technical roadmaps need to be a best-of-breed ecosystem of API-driven systems, leveraged against each bank’s individual strengths. This will support a narrower, focused offerings with more security and greater resilience.

6. Request to Pay and Instant payments are changing the paradigm when it comes to cards. EBA CLEARING announced that 24 payment service providers from 11 countries have confirmed their intention to support the delivery of a pan-European Request to Pay (R2P) infrastructure solution. This solution will accelerate the adoption of instant payments as it will allow PSPs to create (cheaper) alternatives for the traditional debit card schemes as well as speeding up the payment processes and easing reconciliation for merchants and corporates.

We are excited to see how these key topics develop over the coming year as we support our banking clients in addressing these challenges. We look forward to next year’s event to see how things have developed and what hot topics are hitting the headlines in 2020.