Innovation

It’s A Wrap: Innovation Project 2016 Recap

“If you don’t disrupt yourself, someone else will.”

Innovation Project 2016 — where hundreds of leaders across the payments, commerce, tech and security ecosystems joined together under one roof with one mission: navigating the balance between the leading and the bleeding edge.

Or, as articulated through this year’s theme, how Payments (solutions, platforms and devices) have found themselves at the Edge — or, in some cases, stuck in limbo about where, how and which way to best evolve next. But, as PYMNTS discussed yesterday (March 17), what was clear from the two-day, action-packed thought leadership event is that a year makes all the difference in the world.

Especially when your talking innovations in payments. This year’s theme was all about the direction that payments had come from, which way it was headed and the crossroads the payments industry had found itself at.

“Thanks to the proliferation of connected devices, software, the cloud, ever faster and more ubiquitous broadband, new technologies and the great imaginations of innovators everywhere who see a future that most can’t yet comprehend but work tirelessly to make our reality,” MPD CEO Karen Webster said on Day 1 of Innovation Project 2016.

That was a day that dove deep into conversations (and debates, of course) about IoT security, payments fraud and authentication, payments roadblocks and enabling financial inclusion. By Day 2, the conversations took a turn into other realms of the industry, including powering faster payment rails, igniting mobile payments (including new data on Apple Pay, Samsung Pay and Android Pay adoption figures), the race toward the financial services finish line and a roundtable discussion about how leaders from across the industry are innovating their individual niches. Then, the day was wrapped up with a conversation about consumer engagement — one of the hottest buzzwords of the event.

After all, it’s important to keep in mind just who all the innovations are actually being created for (consumers, merchants, governments, businesses, etc.) But, at the core of it, it’s all consumer-driven — much like the hope of how, when and if mobile payments solutions will actually take off will depend on.

So, how did Day 2 end up?

Well, you kinda had to be there.

Breaking Down The Barriers To Payments Innovation

“If you don’t disrupt yourself, someone else will,” Innovation Project 2016 Keynote Speaker Peter Diamandis boldly stated as he addressed the crowd with an eye-opening presentation on the final day of the conference. Disruption is coming and has the power to transform every industry, particularly finance and payments. Diamandis explained that we are quickly heading towards a trillion-sensor economy, which will empower us all to have access to the information we want, where we want and when we want.

So, is the payments industry ready? The feelings about this were mixed during a subsequent roundtable discussion about disruption across the ecosystem and what could be preventing the ability to innovate as fast as possible in finance and payments. “In financial services, it’s really about starting with the consumer and making sure you are innovating around the consumer need, then leveraging that change,” one panelist noted. Many agreed that the biggest thing they hoped to one day see throughout the industry is invisible payments, but the roadmap of how to get there remains unclear.

 

The Roadmap (And Rails) To Faster Payments

It didn’t take long for the discussion around bringing real-time payments to the U.S. market, which one panelist estimated at costing anywhere between $6 billion and $8 billion, to heat up. During the Who’s Powering New Rails At The Edge panel, it was made clear that the market need for new payment rails is not just about moving money but also the data involved to make that happen and the customer experience that will come as a result of faster payments.

The opportunity to pay individuals in real time brings about the ability to empower consumers, while also offering them more control. But, as one panelist pointed out, “my customers don’t ask about payment rails,” instead their priorities include speed, transparency and security. “We need to pull back from payments to talk and think about the benefit being delivered,” he continued.

During this panel, the audience learned why faster payments using new currencies and blockchain-based rails are the only way the journey will be worth the ride — which included hearing why enhancing existing rails is the only way that it can be done securely, efficiently and in compliance.

While a debate ensued among the panelists about how critical the role of regulation is in enabling faster payments, the group could agree on the significance of a consumer-based focus. By maintaining a significant focus on consumer needs and experience, the shift to faster payments may end up being more of an evolution rather than a giant revolution.

The other problem?

“It’s great to say we want faster rails, but it costs [a lot of] money.” This comment sparked another debate (where the topic of regulator roles came into the mix) — a conversation that’s going to continue far beyond the conversations at IP2016. And IP2017, likely. Just like the conversations about blockchain, which made their way slowly into the mix more than once. But distributed ledgers — beyond the blockchain — did strike some more interest.

“Distributed ledgers are a neat, new technology that are a source of truth,” one panelist said.

 

What Does Disrupting Financial Services Look Like? 

As one panelist on the Financial Payments Services At The Edge panel pointed out, “overregulation undermines security.” So, where can we draw the line? As the industry continues to spur innovation, there are unique challenges that face both the innovators themselves, as well as regulators. The infrastructure and culture of traditional banks and financial institutions have left them ripe for disruption. New entrants are primed and ready to provide a better service to the types of markets that big banks are not designed to serve well.

Rather than fight disruption, many panelists suggested that financial institutions should instead work to foster collaboration and relationships with established startups in the industry early on. “Don’t worry about becoming insolvent; worry about becoming irrelevant,” a panelist warned, noting that banks need to increasingly invest in up-and-coming technologies, while also bringing top tech talent on board.

So, who will have the final say on safe, secure and fast payments? Only time will tell.

 

Keeping Consumer Needs Top Of Mind

Having fully engaged consumers pays off, and the dialogue presented during the Consumer Engagement At The Edge panel showed that simply satisfying customers just isn’t enough — engagement is necessary. While merchants may still have a long way to go when it comes to reaching and keeping consumers, the panelists shared their strategies, which include big investments in customer service, delivering an enhanced customer experience and focusing on personalization.

This wrapped up the two days of thought-provoking, intellectually stimulating discussion of what’s next in the world of payments. Of course, we couldn’t forget about the reality of the consumer and nor did the panelists. Consumers are a demanding, fast-faced species, who want satisfaction here and now — instantly, frictionlessly and securely.

 

Top Ten Quotes of The Day

“The [mobile] wallet war is not about us against each other. It’s about replacing pieces of plastic in your wallet.”

“Ride the rails that are already accepting these cards.”

“We’re still in the very first inning … We’re still a long way away from where there is substantive adoption.”

“Not all [mobile] wallets are created equal.”

“Bitcoin is interesting … but who cares?”

“If you really have to provide a service to everybody, do you really have to have everyone innovate at the same time?”

“You can’t call a thing a solution if it doesn’t solve a problem.”

“Financial inclusion is much broader; it’s not enough for someone to just have a bank account.”

“Access to personal information is right up the regulator’s alley and the consumer’s alley.”

“Real-time payments is about to hit like a tidal wave.”

And that’s just the start of what did, and will continue to, define Payments at the Edge.

That is, until Innovation Project 2017.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 Mobile Order-Ahead Tracker, serves as a monthly framework for the space. It provides coverage of the most recent news and trends as well as a provider directory that highlights key players across the mobile order-ahead ecosystem.

 

TRENDING RIGHT NOW

To Top