Christoph Tutsch, Founder and CEO of ONPEX, discusses the banking trends for the year ahead, including PSD2, open banking, cross-border payments and the potential for more flexibility in payments.
Much has changed for the financial industry throughout 2018. PSD2 has seen innovative technologies, such as APIs, become central to financial services, driven by the need for greater convenience and simplicity for the end user. This is indeed a trend we’ve experienced and sought to harness here at ONPEX.
The demand for open banking and API-based technology was made clear to us following the successful launch of our Banking-as-a-Service (BaaS) platform last year. Since then, more than 15 payment institutions, banks, eMoney issuers and acquirers have signed up to our services. Month-after-month we see a significant increase in the number of transactions processed through ONPEX payment accounts – a clear sign that businesses are increasingly turning away from the services offered by traditional banks and favouring a flexible API approach. But how will traditional financial institutions, like banks, respond to this innovative shift and what are the 2019 banking trends?
With PSD2 having been implemented for over a year now, organisations are becoming increasingly comfortable with it. Financial institutions are starting to understand the opportunities PSD2 can potentially unlock for their business and customers. In 2019, we’ll likely see collaborations between large banks and smaller firms increase – with open banking playing a vital role in this.
In fact, a study from Accenture found that over 80% of banks globally invested in open banking in 2018 and 90% of banks plan to build an ecosystem platform using third-parties in 2019. This same study found that at the end of 2018, 77% of businesses said they were participating in open banking, or plan to do so this year.
Via shared APIs, traditional financial institutions and smaller challenger companies can forge even more innovative solutions for the end user. 2019 is set to become the year where the benefits of PSD2 fully unlock. The payments ecosystem is certainly one segment of the finance industry that will see significant change.
One area that is already seeing high volumes of investment in API capabilities is cross-border payments. With the growing adoption of API technology, cross-border payments are likely to become more seamless and transparent.
The recent bidding war between Visa and Mastercard for the acquisition of cross-border payments firm Earthport demonstrates how contested this space is. This case and many others showcase the rising interest of bigger players in this niche.
Real-time payments are also an important key feature for many financial service providers – particularly when it comes to enabling more transparency in the transaction process. ONPEX has already embraced this when partnering up with the SWIFT gpi initiative last year. In the near future, our clients will be able to offer end-to-end transaction tracking to their customers.
Financial service providers have every reason to be optimistic given the potential of PSD2 and APIs. We operate in a digital world, where individuals and businesses expect greater simplicity, transparency, and automation – values ONPEX is dedicated to providing through its products and services for 2019 and beyond.
Due to the foundation laid by PSD2 and API technology, more collaboration between large traditional institutions and smaller fintechs will be anticipated this year – it’s one of the key 2019 banking trends. The result of this collaborative ecosystem will see new and improved solutions become readily available for businesses to offer and customers to use.
Whatever way will be paved by demand in future, whether it be cryptocurrencies being fully embraced by regulators; real-time payments becoming the new norm; or obligatory security through advanced biometric authentication, ONPEX platform will easily connect and adapt to these client and end-user demands.
Christoph Tutsch is the founder and CEO of ONPEX. He set up and funded the business in 2010 to provide businesses with a better way of handling online payments. He is responsible for the overall direction of the business and its continuing growth around the world. A lifelong entrepreneur, Tutsch was previously co-founder and director of several companies in the telecoms and marketing industries.
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