As always, the payments market is in the middle of several big developments. With a huge merger in the ATM sector, new regulatory reports and a shift towards innovative offerings in the industry, there is a lot to talk about. Patrick Brusnahan caught up with firm NCR to find its views on the current situation
The merger between Diebold and Wincor
Rachel Nash, UK&I director of financial services at NCR: “That’s a fairly substantial transaction in the market. In terms of the wider global merger, I think we can understand the reasons why. It’s a good geographic change for them and it creates an opportunity and increases reach.”
Steve Nogalo, vice-president for payment solutions at NCR: “Wincor and Diebold are both formidable competitors, strong in the traditional ATM world, and this allows them to bring together their businesses geographically, making them stronger in certain regions, but it doesn’t really make them a disruptive force in the marketplace.”
Nash: “From a tech point of view, our customers were saying they want that flexibility and agility within the tech architecture they build. It’s a challenge. For any of our traditional retail banking customers with a big legacy infrastructure, it’s a real challenge to try and navigate that change.”
A level playing field
Nash: “The opening up of the market is something we welcome. The focus on innovation and choice we absolutely welcome. Choice, flexibility and innovation are all there to be supported. Whether that should be enforced or imposed seems to be the approach the CMA (Competition and Markets Authority) is taking. Let’s see how the market responds to that.”
Nogalo: “The move towards an open API ecosystem in financial services is clearly a disruptive force in the marketplace. Interestingly, in the UK market it is being driven by the CMA, but I’m seeing leading progressives in other geographies, who don’t have a regulatory push for an open API, making moves in that direction as well. You have to ask why a leading financial institution would do that.
“As a financial institution, you can unlock a superior customer experience by exposing APIs in an ecosystem of partners. You can leverage to build great innovative services that still depend on you as a provider and you can augment. I think that’s where the opportunity is. It’s really all about ease of use and a frictionless experience, as well as choice.
“It will really come down to the value that consumers see in what [new players] are offering versus what the market is offering. Ease of use, consistency across channels and frictionless are critical criteria for consumers. These are all areas where start-ups or non-traditional players are focusing their energies. It’s all about making it easier for that consumer.”
What does it take to win in innovation?
Nash: “That’s the million dollar question. From my perspective, none of us have the crystal ball, but we do know that things will change at a speed that we’ve never seen before. Having the right environment and flexibility that can adapt to change is critical. The fintechs do have an advantage by not having a legacy infrastructure, so it’s how technology providers bridge that gap for those institutions that do have one.”
Nogalo: “The future is uncertain. The industry is changing at an accelerated pace. The financial institutions that are able to invest in flexible technology platforms will ultimately be positioned for success. It is a significant change to the business model in which financial institutions have operated. They need to identify new ways to monetise the services they are providing as some of their historic revenue streams shift.”