Predictions 2019: banking trends, cross-border transfers and flexibility in payments

By Christoph Tutsch, Onpex

Much changed for the financial industry in 2018. PSD2 has seen innovative technologies, such as APIs, become central to financial services, driven by the need for greater convenience and simplicity for the end user. This is indeed a trend we’ve experienced and sought to harness here at Onpex.

The demand for open banking and API-based technology was made clear to us following the successful launch of our Banking-as-a-Service (BaaS) platform last year. Since then, more than 15 payment institutions, banks, emoney issuers and acquirers have signed up to our services. Month-after-month we see a significant increase in the number of transactions processed through Onpex payment accounts – a clear sign that businesses are increasingly turning away from the services offered by traditional banks and favouring a flexible API approach. But how will traditional financial institutions, like banks, respond to this innovative shift?

PSD2: Unlocking possibilities in 2019

With PSD2 having been in force for over a year now, organisations are becoming increasingly comfortable with it. Financial institutions are starting to understand the opportunities PSD2 can potentially unlock for their business and customers. In 2019, we’ll likely see collaborations between large banks and smaller firms increase – with open banking playing a vital role in this.

In fact, a study from Accenture found that over 80% of banks globally invested in open banking in 2018 and 90% of banks plan to build an ecosystem platform using third-parties this year. This same study found that at the end of 2018, 77% of businesses said they were participating in open banking, or plan to do so this year.

Via shared APIs, traditional financial institutions and smaller challengers can forge even more innovative solutions for the end user. 2019 is set to become the year where the benefits of PSD2 fully unlock. The payments ecosystem is certainly one segment of the finance industry that will see significant change.

Cross-border payments: Automation, transparency and simplicity

One area that is already seeing high volumes of investment in API capabilities is cross-border payments. With the growing adoption of API technology, cross-border payments are likely to become more seamless and transparent.

The recent bidding war between Visa and Mastercard for the acquisition of cross-border payments firm Earthport demonstrates how contested this space is. This case and many others showcase the rising interest of bigger players in this niche.

Real-time payments are also an important key feature for many financial service providers – particularly when it comes to enabling more transparency in the transaction process. Onpex has already embraced this when partnering up with the SWIFT gpi initiative last year. In the near future, our clients will be able to offer end-to-end transaction tracking to their customers.

2019 and the coming years: More flexibility in payments?

Financial service providers have every reason to be optimistic given the potential of PSD2 and APIs. We operate in a digital world, where individuals and businesses expect greater simplicity, transparency, and automation – values Onpex is dedicated to providing through its products and services for 2019 and beyond.

Due to the foundation laid by PSD2 and API technology, more collaboration between large traditional institutions and smaller fintechs will be anticipated this year. The result of this collaborative ecosystem will see new and improved solutions become readily available for businesses to offer and customers to use.

Whatever way will be paved by demand in future, whether it be cryptocurrencies being fully embraced by regulators; real-time payments becoming the new norm; or obligatory security through advanced biometric authentication, Onpex platform will easily connect and adapt to these client and end-user demands.

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