At the beginning of 2018, what is the biggest challenge facing your industry/field of expertise? Do you think 2018 will bring us closer to solving this problem?
In 2018, we will see a lot of banks and financial institutions increase their efforts trying to keep up with the speed of change in the industry. Slow doesn’t work anymore! For any company to be able to retain its relevance in the market, it is important to be able to continuously adapt to changes in the market and to swiftly act on the company’s own insights and assumptions. Companies that fail to do so will go extinct, which – as we’ve learned at school – is one of the outcomes of natural selection. The new business environment is all about being open, agile, digital and fast!
As a result, this also changes the way our clients look at ‘testing.’ Being a testing, inspection, and certification company we have historically felt comfortable with a definition of testing that includes ‘to demonstrate compliance with a standard or regulation.’ In 2018, more of our clients will expand this definition to include ‘experimentation’ as part of testing as well. For instance, ‘testing’ how customers like a new idea or feature, testing if a new user experience works out well or not, where testing may involve the feedback and opinions of thousands of users (crowd-sourced testing). Times are changing, and so are the fundaments under the TIC industry.
Do you have a good feeling about 2018? Or, are you more pessimistic?
Positive as always! The financial industry has seen some rough patches over the past years, where market conditions, increasing regulatory pressures and shifts in consumer behaviors have been stress testing many companies.
For 2018, I’d expect consumer spending to continue to grow, albeit a bit slower than in previous years. For many (but not all!) stakeholders in the retail payments industry, there’s a direct correlation between growth in consumer spending and in top-line growth. Manufacturers of chips for use in debit and credit cards, for instance, may see less direct benefits from increased consumer spending, and as the global implementation of secure chip-based payment cards enters more calm waters I would continue to encourage these companies to pursue additional opportunities and technologies to make the retail payment industry more secure!
What significant events will happen in your industry/field of expertise?
Aha, that will be PSD2 for our friends in Europe! PSD2 – or the Second Payments Services Directive – is a piece of legislation aimed at a more transparent and level playing field for consumer payments. PSD2 is said to break the monopoly of payment networks and banks by allowing 3rd parties to take deposits (ASPSP – Account Servicing Payment Service Provider) or to initiate a transaction (PISP – Payment Initiation Service Provider, which has historically been the domain of payment networks).
Additionally, banks are encouraged to open up access to their customer’s account information through a set of APIs, and implementation of 2FA – Two Factor Authentication – is said to make online purchases less prone to fraud. Irrespective of whether PSD2 turns out as a blessing or a curse for the European payments industry, there will be fireworks for sure starting right after the beginning of 2018!
What products or companies do you think will be successful? Why?
Someone from a large digital payments company once told me: “The Killer app for mobile is convenience.” Consumers have so much to choose from (handset, operating system, mobile carrier, rideshare app, bank, payment wallet, eCommerce websites, etc.) that ultimately the ‘attractor state’ of the market is one with ‘convenience’ as the center of gravity. Companies that know this (as in choose not to ignore this) and are agile enough to adapt their business accordingly will be the winners of 2018 and beyond.