Alison Donnelly on PSD2, Women in Payments and the power of regulation

Following her recent double-award win, Alison Donnelly, Director and Head of Advisory at fscom, sat down with PaymentEye to discuss diversity and inclusion in payments, the power of regulation to change the industry for the better, and the influence of consumer demands on the world of b2b payments.

You recently won Most Influential Woman in AML & Payment Services at the 2018 UK Corporate Excellence Awards. How did this make you feel personally, and about the industry as a whole?

Naturally I’m very happy to have won the award. There’s a lot of focus on women’s involvement at the moment, and there’s something of an imbalance in paytech. There’s a real need to create role models to encourage more women to get involved in payments. There are a lot of initiatives out there, including fscom’s own Women in FinCom initiative to encourage women to become involved in financial services and the EPA’s Women in Paytech, and I think they really help to encourage women to take those opportunities, as well as teaching the men about diversity and inclusion. There’s a lot we can all do to make the workplace more comfortable for everybody.

Payments as an industry is driven by collaboration. In this way, how can greater diversity in payments impact innovation?

We all know the statistics, it’s clear that the more diverse a company is, the more productive it is. The wider range of individuals involved, the wider the range of knowledge and experience available. Being at the forefront of payments is about doing something different and being able to bring different ideas onboard.

I recently spoke to someone from Magento who argued that consumer payment trends are now influencing b2b, especially millennial demands for instant payments, anywhere. How do you think b2b is evolving in comparison to b2c payments?

The whole model of change is based around that need to make products simpler and easier to use. It follows that b2b would benefit from that virtually unlimited access to payments that consumers now enjoy. There was an article last year that gave a series of examples of how, as a result of the move from paperless to data-driven consumer analytics, b2b was becoming more like b2c.

What do you think is the most important new technology in payments right now?

I think artificial intelligence is the most important technology at the moment. If you look at the length of the KYC process for example, AI cuts out the human error in the process while analysing information and calculating identity. The speed and efficiency offered is very appealing for payments. But, as with any technology, it’s only as effective as those using it. So, coming from a compliance background, it’s important to understand the risk involved in using AI and understand its weaknesses.

What’s next for you now, following your double award-win?

Well, we want to bring more staff on board because there’s so much opportunity, especially in compliance, for people with specialized skillsets to get involved. One of the key things for me is rolling out the Women in FinCom initiative in order to bring more women into the compliance side, making sure that new financial products are compliant and are what’s best for business, for consumers and for regulators.

One thing that regulation does is weed out those who aren’t going to make the bar. I think PSD2 has achieved that already and will continue to achieve that. I think regulators have finally realised that, without payments, there are no financial services. The importance of the sector is coming to the fore. Some firms might think that isn’t good news, but it is, because it goes towards creating a product that’s better understood with a reduced risk involved.

Do you think PSD2 has been successful so far? Does it have further to go?

PSD2 is going to keep growing and changing, especially with open access, and nobody really knows where it’s going to end up. I think one of its major successes is how consumer-orientated it is, it’s really upping the game in terms of consumer protection. I don’t think we should draw back on this at all. Some people in the sector think that regulation restricts the market, but it’s actually the foundation of it.

Louise Beaumont said a similar thing in a PaymentEye interview recently, arguing that regulation is really the only way to get banks to do anything, otherwise they’ll keep pushing the same ‘big, dumb product’.

Banks have the benefit of being the incumbents, so from their perspective there’s no need to change. For example, it took a huge amount of effort from a lot of people to change how banks in Northern Ireland charged for their overdrafts. I think we’re on a path now, with open access, to making banks change how they do business moving forward and how consumers engage with them.

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