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Payments Innovation Conference 2015

A roundup of events from the 5th conference jointly organised by techUK and PaymentsUK.

Recently techUK held its fifth annual Payments Innovation conference, run in partnership with the newly introduced (on the day) PaymentsUK. Attended by over 325 representatives from right across the payments value chain, it was chaired by Rory Cellan-Jones, BBC Technology Correspondent and featured a wide range of thought leaders from all parts of the industry.

This year's conference focused on some key themes including:

· consumer behaviour – taking a forward looking view as to how end-user and system-user, including technology vendors, businesses and government, demand will evolve over the coming years. This included thought and insight with regards to the potential solutions to meet changing demand.

· new business models – how collaboration can leverage existing and emerging technologies to provide new business models, such as unlocking value from data, which can in turn catalyse further opportunities for competitive innovation.

· fraud and security – examining the ways in which innovation and collaboration within and across sectors can address concerns about the security of new payment mechanisms, including building consumer trust, and simultaneously improve the end-user experience.

For the first time at the Payments Innovation Conference, 5 fintech firms had the opportunity, and just 3 minutes each, to pitch their innovative products and services to attendees.

As noted by Julian David in his opening remarks, the conference illustrates the central role that technology plays in both the present and future of the payment systems. From chips to clicks, from wearables to thumb print authorised apps, techUK's members are enabling the rapid pace of change and innovation that has been seen across payments in recent years.

Considering the introduction of Mondex in the early 90's, one of whose founders joined the panel for a breakout session on delivering innovation in payments, David remarked that the technology was just not there at the time. But, he noted, it is definitely here now.

Tech is important not just in the payments space but right across the UK economy, in both the public and private sectors. It is a growth market with around 100,000 software companies operating in the UK, the largest mobile market in Europe (valued at £14 billion annually), a cloud computing market estimated to reach £7 billion by 2016 and a fast growing cyber security market, currently worth around £3 billion.

Hannah Nixon, MD of the Payment Systems Regulator (PSR), pointed to the importance of a regulator charged with fostering innovation and competition and highlighted some of the ways in which innovation in payments had benefitted consumers and businesses across the UK. She warned, however, that "little innovation is happening around the underlying infrastructure. Few new and viable alternatives to the status quo have emerged." She also promised that the PSR would take action if the market did not deliver improved access.

Her remarks fed into a subsequent panel discussion on what a World Class Payment System might deliver and how. The issue of how to open up access to payment systems, not just in the UK but also to ensure interoperability across Europe demonstrated a role for new technology. Access for challengers is an important issue and one on which both regulators and technology innovators need to collaborate to deliver a solution that lowers the barriers to entry.

Nixon also noted that 'Well-documented IT problems just recently are a reminder about the need for continuous improvement in the technology space, and innovation is part of that'. In fact, the challenge of legacy IT infrastructure was referred to on a number of panels across the day, an issue covered in a recent techUK white paper; Taking the Initiative: Leading with Technology in Financial Services. The need for full digitisation, not just on the customer delivery end, was a theme throughout the day and is linked to the ability and need to improve security (and trust) in payment systems, as well as resilience.

The increased consumer take up of contactless payments and the upcoming launch of Apple Pay in the UK were also popular topics during a number of speeches and panel discussions. This fed into an interesting discussion, and some debate, about the use of biometrics. It was clear that there were a wide range of biometric security solutions on offer and lots more in the pipeline. Chi Onwurah, MP noted the need for consumer choice and trust. There won't be a clear winner but the proffered solutions would have to reflect the preferences of consumers, which may well vary across device and individuals. One panellist noted the following rankings in terms of consumer preference; fingerprint, facial recognition, pin and voice.

The breakout sessions continued to look at some of the key drivers across payments; regulations, new technologies (in this case, blockchain) and how to deliver innovation in a fragmented world in which markets were moving at different rates of change.

It is not surprising that the word innovation was used repeatedly throughout the day and that the conference ended up with a discussion of the impact of new business models, how they harness innovative technologies and, in doing so, create greater opportunities for further innovation and competition. The path to a fully digitised sector is not without its bumps and barriers, as well as failures along the way, but digital laggards are certain to see new competitors enter their markets.


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