• Ruben Salazar Genovez, Vice President, Head Product Design & Development, Asia Pacific at Visa


• 13.06.2016 02:00 pm
undisclosed

Enabled by an interoperable tokenisation platform, Apple Pay, Samsung Pay and Android Pay are expanding their participation in mobile payments. Samsung recently announced that it will launch Samsung Pay in Singapore on June 16^th in collaboration with OCBC, DBS, POSB, Standard Chartered and Citibank.

The “pays” provide an enhanced consumer experience and will change the way consumers use their devices to pay in a cardlesss environment. The unsung hero of the transactions is the tokenisation platform.  Tokenisation ensures that devices are provisioned with payment credentials that is limited to that device and specific payment scenarios. The real consumer credentials are never present in the secure element of the phone nor in the data siting in the cloud.

This is an advancement that will allow the industry to gain the scale it hasn’t been able to reach with previous security standards, and is also opening many possibilities to provision payment credentials in almost any device: wearables, cars, household appliances, office equipment etc.

But this is just the beginning. Bank and card issuers will need to quickly evolve the experience and leverage the technology to provide a full banking solution integrating all financial benefits to consumers. These are the top five tactics banks will need to work on:

1. Re-invent the digital issuance:  The current acquisition and underwriting model, will soon become obsolete. Banks will need to re-think the application process and migrate the capabilities fully to mobile.  Even the most efficient online application process and instant issuance will need to migrate to the mobile environment and integrate flows with first time provisioning. The mobile browser is being quickly replaced by Apps, so new application process will need to operate as an App combining risk scoring, credit bureaus APIs and instant credit decision.
2. Integrate Rewards, Loyalty and Incentive Marketing: The “pays” today operate in isolation of the full consumer experience, Banks will need to integrate the entire consumer engagement to the payment tools. Offers, hotel perks, miles, rewards points, privilege access all will need to be seamlessly integrated with the “pays”, HCE Wallets and others. Failing to do so will affect ongoing consumer adoption.
3. Enhance the Transaction Experience: The act of payment is surrounded by multiple events that facilitate a frictionless experience and banks will need to evolve the risk prevention methods defined for in a plastic environment. Visa is offering banks multiple APIs that minimise risk and the chances of declined transactions. With Visa Developer, banks can build better consumer experiences with solutions like: Mobile Location Confirmation, Visa Transactions Alerts, Visa Risk Manager, Visa Travel Notifications and many other APIs designed to integrate into the overall digital banking and payment experiences.
4. Re-Define Cross-Selling:  Historically payment platforms have been one of the most technologically advanced products in retail banking interaction; mortgages, lending, checking and  other banking products rely on robust back-end infrastructures yet limited in frequent consumer interaction.  The consumer experience gap will widen if the backend supporting other products does not keep up with the frontend experience provided by mobile payments.  Banks need to find ways to be able to cross-sell their products and this will necessitate the adoption of similar technologies to provide a bank-wide digital experience to their customers. Perhaps this is the largest task in the next few years.
5. Think IoT Banking now: We are in the early days of what we are calling “Internet of Things”. There will be a hyper digital adoption of technology where a multitude of devices might interact with financial instructions. The space is getting crowded fast with players for whom banking and payments are not their core business and the absence of solid bank partnerships will force these players to create parallel industries. Tokenisation allows banks to participate in that ecosystem and making the right investments in talent and technology now will accrue future economic benefits from automated transactions from IoT.

Yes, almost every single industry, from Agriculture and Space Science, is being affected and enhanced by digital adoption. The financial industry is not an exception – we need to operate in this new digital ecosystem and quickly evolve technologies to connect better with consumers.

This is a huge transformation for the industry.  Everything is about to change – the way we develop and manage products, how we manage risk, the way we engage consumers and how we deliver value.