So, does the changing regulatory landscape offer challenge or opportunity for FINTECHS and Banks?

Well both really -let’s look at the Banks first -they are challenged by emerging competition and technology like never before. PSD2 is intended to stimulate the emergence of Payment Service Providers (PSP’S) and Account Information Service Providers (AISP’s). Historically and through to current day Banks have very much predicated their cash management solutions on proprietary systems and file formats with rigid reporting capabilities. Look back and remember how difficult it once was to convince banks to share multi-bank reporting with each other for their common clients.

Fintech has the opportunity and the regulatory will to assist the influence of change but there is good and bad Fintech as with everything. It is important to look at both Concept and Capability -in analogous terms it’s like a performance vehicle -it promises much, but you need to road test and make sure it does have an engine under the bonnet! Look back at the US market and would suggest Information and data providers will emerge and mature more quickly as third party providers than payment providers. This is probably because of systemic risk and limits more than pure capability.

So how will a Corporate or Bank benefit from the changing environment?

That is a really interesting consideration. On the one hand Bank’s need to open up their data to customers through API’S but that may manifest itself in its own set of problems with a lack of common bank standards and as I said earlier the adoption of a universal standard is unlikely amongst the banks. Throw increasing concerns over Cyber Security and Fraud into the mixture and it becomes vital for Corporates and Banks to seek a future-proof solution.

How do you see this panning out?

 Well, like it or not -the keyword is COLLABORATION between banks and emerging service providers to provide secure file format agnostic solutions for cash management-both in terms of payments and reporting. Clients have choice and want control over their data like never before but with that comes a burden of responsibility and new risk.

At B2 Group we work closely with banks and corporates to connect them together. We link corporates to banks and deliver payments in a secure environment. We link Corporates to their TMS and ERP systems and then connect to the banks. All this in a file ambivalent solution with rich reporting and use of data. To me, this is future proofing and collaborative. It lets both Banks and Corporates get on with what they are best at -their core competencies. This is all about collaboration to an end-game solution that benefits all all-just look at Apple and how many collaborative partners they use to develop their end product.

On a final note………

There is no definitive answer yet as the providers mature, the technology evolves at rapid pace and regulation stimulates both. The positives are the freedom of choice and use/control over data and formats. The risks are Fraud, Cyber Security and longevity of solutions and their providers but collaboration is still the mantra, I strongly believe. That’s it for now, come and see our stand at the ACT Smartcash Conference in London 8/9th February at the Hilton Bankside. I will be speaking on the afternoon of the 8th in a cash motion debate “This House believes that Fintech will improve cash management”.