Immediate payments is a key revenue driver for 66% of banks in markets with IP schemes, according to new benchmark data, "2017 Global Payments Insight Survey: Retail Banking," from ACI Worldwide and Ovum.
The benchmark report also notes that although open APIs will benefit customer satisfaction for 65 percent of banks, nearly half of respondents (45%) are taking a 'wait and see' approach to an open API strategy. Regardless of strategic focus, 57 percent of all banks are growing their IT investments in 2017, with a distinct emphasis on operational efficiency (91%) and fraud prevention (68%), as security issues remain an ongoing concern for the banking industry.
Principal study findings include:
Immediate Payments Driving Revenue
- 66% of banks in markets with live IP schemes view immediate payments as a revenue driver for their institutions
- 61% of banks believe that immediate payments will enhance their service and proposition to customers
- 60 percent of banks expect immediate payments to reduce costs, as the necessary investments in payment infrastructure and fraud systems ultimately deliver broader benefit to their institutions
Open APIs Benefits Customers—but there are Differences Over Strategy
- 65% of institutions believe that open APIs will benefit their customer-facing proposition
- While 59% of banks have a clear strategy for creating open APIs and interfaces for developers, 45 percent of respondents report that they are taking a 'wait and see' approach
Overall IT Investment is Up and Fraud Prevention Remains a Priority
- 57 percent of all banks are growing their IT investments in 2017, up from 53% in 2016— particularly in Europe, where 62 percent are increasing budgets for payments-related projects
- 68 percent of banks have recently, or are currently, investing in fraud detection and prevention capabilities
- Delivering increased operational efficiency is a top three IT priority for 91% of banks
- 42% of banks are concerned about security issues, driven by risks around potential data breaches and fraudulent activity
"Immediate payments and open API capabilities are increasingly viewed by banks as key drivers of revenue, customer satisfaction and cost reduction," said Mandy Killam, executive vice president, ACI Worldwide. "Developing an open API strategy is essential for banks to create a friction-free customer experience—and to compete in this quickly evolving retail payments market."
"The market is rapidly changing—banks must invest wisely in core payments platforms and infrastructure to take advantage of relevant opportunities," said Kieran Hines, head of industries, Ovum. "Financial institutions that proactively shape strategies around open APIs, fraud prevention and immediate payments will reap the benefits when it comes to both customer experience and revenue."
The study is comprised of executives in retail banking and merchant acquiring organisations, based in countries in the Americas, Asia Pacific (APAC) and Europe, Middle East and Africa (EMEA).
* Methodology and Demographics:
For the 2017 Ovum Global Payment Information Survey, which includes merchant, biller, and retail banking components, ACI and Ovum created a 23 point questionnaire, looking at the following criteria for key payments players: significant aspects of existing payments infrastructure; forecasts for spending; areas for investment and perceptions of where payments fit within their broader strategic objectives. This survey was sent to payments decision makers globally in December, 2016—January, 2017.
It provides a snapshot of payment perceptions among merchants, financial institutions, and scheduled billing and payment-taking organisations such as higher education, consumer finance and insurance. Overall, respondents totaled 1,475 executives across 15 industry sub verticals in 25 key global markets, resulting in more than 144,000 separate data points on perceptions and expectations of payments among critical payment enablers globally.