Phil Bowkley

Barclays Money 20/20 Findings Reveal a Confident Future For European Fintech

New survey findings from Barclays show that European fintech leaders expect future innovation in the industry to be driven by collaboration, transformed by Artificial Intelligence and altogether changed by Open Banking. They are also confident about the potential for Europe to be at the cutting-edge of future advances, with Continental Europe predicted to be the second biggest region for payment innovation, behind only China.

A Barclays survey of more than 600 fintech, financial services and payments leaders conducted at the Money20/20 Europe conference in Amsterdam in June 2019 reveals that two fifths of respondents (38%) predict China is the country that will drive the biggest rise in payment innovation. Perhaps unsurprisingly, the European market think that Continental Europe will be the next biggest contributor (23%).

AI transforms the future of payment innovation

The findings also showed that Artificial Intelligence (AI) is the technology that is expected to have the greatest impact on how fintech companies work in the future. The findings show that AI (35%) was selected over and above Machine Learning (16%), Automation (15%), Blockchain (14%) and Biometrics (12%) as the technology that will revolutionise fintech ways of working.

When compared with findings from the same survey at the previous Money20/20 Asia event in Singapore, Europeans are less convinced around the potential impact of Blockchain on their activities than their peers in Asia. 26% of people surveyed in Asia said that Blockchain will revolutionise their future working practices, compared to only 14% of those in Europe.

Collaboration is key

The importance of partnerships was discussed in depth at Money20/20 Europe, with many expecting this to be a significant driver of creativity, disruption and new forms of financial technology. In line with this, more than two thirds (69%) of respondents indicated that collaborating with fintech companies for mutual benefit is a key role for banks, a significant increase from the 41% who gave the same answer in Asia.

A focus on collaboration was reinforced when attendees were asked what their business could do to increase productivity, with the most popular answer being to seek partnerships with external organisations in both the European (32%) and Asian (29%) surveys. The appetite for European fintechs to collaborate was further revealed when respondents were quizzed on how they think financial technology will be consumed in the future, with 42% stating they think it will be through partnerships with established players.

Customer loyalty

When asked how they keep customers loyal and provide a great experience, European and Asian attendees had similar viewpoints. Security scored highly with 46% of those in Europe and 55% in Asia citing this as key. However, in Europe customer loyalty is also driven by being able to provide a more personalised offering (55%), whereas in Asia frictionless payments (53%) ranked highly.

Less encouragingly, despite the awareness of the importance of security for customers, half of respondents (49%) revealed that they think they could be doing more to support and educate colleagues about cyber security.

Open Banking

There was plenty of optimism on display regarding the potential for Open Banking to change the payments industry, with more than half (51%) of respondents at the Amsterdam event believing it will impact their business in a big way, and just 3% claiming it won’t have any effect. Regulatory changes are expected to support this, with 48% indicating that they think Open Banking will be the area most impacted by new regulation this year.

Commenting on the survey findings, Phil Bowkley, Global Head of Financial Institutions Group, at Barclays Corporate Banking, said: “Our survey results reinforce what we were hearing in conversations with our clients and peers at Money20/20 in Amsterdam – there is a huge appetite to collaborate and lots of excitement around the potential for new technology, such as AI, to improve the customer experience. Open Banking provides further opportunities to innovate, as we demonstrated in our work with Form3 to help Ebury become the first non-bank to access the UK Faster Payments scheme, and our dedicated fintech team look forward to helping more clients scale-up and do more for their customers.”

The most important B2B payment innovation selected by European respondents was optimised B2B finance (28%), a significant increase from our Asia survey where digital payments, virtual cards and new payment networks are considered to be the priority.

“The results from our polling show that Europe is now seen as a key global player driving payment innovation, with rapid change taking place across the region as well as in the UK. Emerging technologies such as Artificial Intelligence and Machine Learning are transforming the payment landscape, opening up new and exciting opportunities for the sector,” said Rob Cameron, CEO of Barclaycard Payment Solutions.

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