AI and Open Banking to lead FinTech innovation

Written by Oliver Wade
09/07/2019

European FinTech leaders expect Artificial intelligence (AI) and Open Banking to set the standard for wide-ranging innovation in the financial services industry, according to research from Barclays.

A Barclays survey of more than 600 leaders in FinTech, financial services and payments conducted at the Money 20/20 conference last month also found that 69 per cent believe collaboration between banking incumbents and more agile FinTechs is expected to be a key driver of change in the banking sector in the coming years.

The findings show that Artificial Intelligence (AI) is the technology that is expected to have the greatest impact on how fintech companies work, with (35 per cent) selecting it as having the most significant impact over and above machine learning (16 per cent), automation (15 per cent), blockchain (14 per cent) and biometrics (12 per cent).

There is also optimism about the potential impact of Open Banking within the payments industry, with more than half (51 per cent) of those surveyed believing it will impact their business in a big way, and just 3 per cent claiming it won’t have any effect.

Regulatory changes are expected to support this digital evolution of banking, with 48 per cent suggesting that they think Open Banking will be the area most impacted by new regulation this year.

There is also widespread confidence about the potential for Europe to be at the cutting-edge of future advances, with continental Europe predicted to be the second biggest region for payments innovation, second only to China.

When asked about customer loyalty, nearly half (46 per cent) cited security as being the priority, along with 55 per cent who said customer retention would be driven by more personalised services.

In addition, despite rising awareness of the importance of security for customers, half of respondents (49 per cent) said that they could be doing more to support and educate colleagues about cyber security.

Responding to the findings, Phil Bowkley, global head of financial institutions group, at Barclays Corporate Banking, said: “There is a huge appetite to collaborate and lots of excitement around the potential for new technology, such as AI, to improve the customer experience.”

The most important B2B payment innovation selected by respondents was optimised B2B finance (28 per cent), a significant increase from the equivalent Barclays survey carried out at Money2020 Asia where digital payments, virtual cards and new payment networks are considered to be the priority.

Rob Cameron, chief executive of Barclaycard Payment Solutions, said: “The results from our polling show that Europe is now seen as a key global player driving payment innovation, with rapid change taking place across the region as well as in the UK.

“Emerging technologies such as Artificial Intelligence and Machine Learning are transforming the payment landscape, opening up new and exciting opportunities for the sector.”

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