PAYMENT DIGITALIZATION: HOW NEW TECHNOLOGIES CHANGE THE TRADITIONAL BANKING SYSTEM
On May 4th, several sessions were held on the platform FT Live by Financial Times. One the first day of The Global Boardroom, the conversation was attended by Melinda Gates, Pierre Gramegna (Minister of Finance of Luxembourg), Ajay Bhalla (President, Cyber & Intelligence of Mastercard) and other key managers in the financial sector.
At the online meeting bankers and financial analysts discussed the main trends in the banking system. And here are the top 5 innovations these experts highlighted:
1. Traditional payment systems will continue to invest in Blockchain
Speaking at the conference, Ajay Bhalla (Cyber & Intelligence, Mastercard) admitted that any bank, large or small, “has to embrace new technologies whether it is AI (artificial intelligence), digital identity or blockchain”. Otherwise, it will not not withstand the competition and will lose customers. Also Bhalla states that Mastercard has already “invested heavily” in blockchain technology and plans to do it further.
2. The more transparent the better
During the session Colin Walsh (founder and CEO of Varo Bank) declared that “Trust is the largest currency we [financial institutions] trade”. As he thinks, only those banks that can guarantee to their clients that their money found a safe haven can win the battle. Besides, Walsh is sure that breakthrough of mobile technologies will help customers invest more and save easier.
3. The main focus on simplicity
Moreover, the expert from Mastercard added that today any technology is meaningless if it doesn’t improve people’s lives: “It’s really not about technology, it’s about creating technology that solves real world problems for people”. Bhalla is sure that improving digital identity and authentication is what will be “even more important” in the future for traditional banks and payment systems.
4. Fintech will help us fight climate change
Pierre Grameigna (Minister of Finance of Luxembourg) came to this conclusion. As Grameigna states, future development of digital payments and building technological infrastructure will not only provide a competitive advantage but also help reduce the consumption of natural resources. “We must learn from that and not be behind”, Grameigna said during his speech.
5. Pandemic habits will stay with us
Talking about the new ‘norm’, Ajay Bhalla also explained why when lockdown is over and borders are opened most of us will continue to shop online and use digital banking. “Many people who were reluctant to get into doing digital groceries <…> had no choice, they had to accept it and embrace it. And it worked absolutely well. It’s actually the marker that the world has moved on very successfully”.
So the banks and other players of the financial market should put emphasis on clients’ needs instead of spending extreme amounts of money on surveillance and commercials, face the issue of climate change and appreciate the blockchain because it’s what the future will look like.