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KEY TAKEAWAYS FROM MONEY 20/20 EUROPE 2021.

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By Edouard Roca, EMEA business developer, France at Fime

 

It was good to be back! Money 20/20 Europe 2021 brought together key players from throughout payments for a series of presentations and debates on the key concerns and opportunities within the industry. From global leaders to dynamic startups, the event brought together over 1,500 people to share thoughts and ideas.

Gathering alongside other delegates in Amsterdam for one of the first in-person events since the onset of the pandemic, we were able to join the discussions on the key ideas at the event. There was excitement everywhere and not just about meeting in person. Discussions centered on a broad range of opportunities available in the payments industry at the moment, but a few overarching themes stood out.

 

A pan-European payment plan

The European Payments Initiative (EPI) aims to create a unique scheme that will facilitate a unified, pan-European payment solution for both domestic and cross-border transactions. The migration of domestic card schemes to EPI aims to provide a more seamless payments solution for consumers across the entire continent.

One of the primary focuses of discussion at Money 20/20 regarding this initiative was defining its next steps. End of 2021 / beginning of 2022 are seen as crucial for the future of EPI. Institutions such as BNP Paribas and Worldline voiced their support for the initiative. Currently, the cost of the initiative is being evaluated, as well as the other streams such as functional and technical. It is expected that large scale investments in the project will be made soon.

As the initiative progresses, a key aspect of the work is building trust and adoption for consumers and merchants. This was noted at the event by CEO of the EPI Interim Company, Martina Weimert, who stressed that this initiative will look to tackle the fragmentation issues currently found in the payments ecosystem. By creating a unified network, the EPI is bringing together the plethora of domestic schemes into one centralized ecosystem. This is advancing the movement towards ubiquitous digitized payments.

 

Centralizing cryptocurrencies

Cryptocurrencies were another key topic. With private initiatives like Facebook’s Diem in the works, the community debated how cryptocurrencies can be promoted and regulated by central banks.

This trend has been accelerated by the adoption of Bitcoin as legal tender in El Salvador. Banks are therefore keen to develop proof-of-concept Central Bank Digital Currencies (CBDC) to retain their position in the ecosystem. By utilizing closed-loop, blockchain-based ideas, CBDCs provide the potential to retain influence over digital finance.

With this consideration in mind, delegates discussed the requirement for international standards to be agreed on collaboratively. By private entities and central banks alike. Different stakeholders hold varying motivations, so it is important to safeguard financial inclusion for citizens who rely on them. Much of the conversation at the conference was conceptual economics as opposed to tangible payment solutions. However, debates like these will help to formulate long term strategic plans for the ecosystem.

 

New ways to pay

Echoing throughout the conference was the underlying theme of putting customers at the heart of any solution. The prevailing consensus was that payment innovations of the future will be driven by consumer demands. One such example of this was the discussion surrounding SoftPOS payments.

SoftPOS solutions that can enable users to accept payments using their own commercial off-the-shelf device give more people access to the growing world of digital payments. Merchants and vendors alike are aware of the benefits of adoption. It’s a cheaper option, which provides more business opportunities for merchants. Equally, vendors know customers are ready to accept it with the growing use of contactless payments. A recurring concern throughout discussions of SoftPOS was security, however if implemented correctly, this technology is ready to take off.

It was interesting to hear discussions regarding Visa and Mastercard offering free software development kits for SoftPOS, making such solutions more readily available. The creation of new payment acceptance methods highlights that stakeholders throughout the ecosystem can play a pivotal role in democratizing digital finance. This is especially true in nations which may lack traditional technology infrastructure.

 

The need for support

Money 20/20 Europe gave insights into the industry that truly highlighted what an exciting, dynamic time it is. The overarching themes discussed above served as the framework for even more discussions on how to enhance the ecosystem from various positions throughout the value chain.

As these come to fruition, many stakeholders need support in refining their role in the industry. Fime can offer support in defining, designing, delivering and testing quality payment solutions and user experiences. Learn more about how Fime can support your payments project.

 

Business

OUTSOURCING YOUR IT SOLUTIONS CAN SAVE YOU FROM COSTLY DOWNTIME

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Amir Hashmi, CEO and Founder of leading IT and Cloud services provider Zsah, discusses why you need full-time professionals if you want to avoid the money pits of IT downtime

 

A lot of wealthy business owners will uphold the following infamous statement – time is money. Many CEOs believe that it should be at the heart of your business strategy. They aren’t wrong, and it is no different when it comes to IT. Therefore, it is high-time that businesses consider the real risks and costs associated with IT downtime, and do all they can to avoid it

In the midst of a post-pandemic technological revolution, it’s now more important than ever to carefully consider who manages your technology. It is essentially the motor that drives productivity, efficiency and growth, and if therefore, if there isn’t a thorough and dedicated system in place, businesses risk system failure, which can risk everything.

Something so essential to a company deserves to be taken more seriously than just to deploy the services of an IT help desk when there’s a significant issue. The answer isn’t necessarily to consider ways in which you can fix a problem once it arises, but instead to ponder upon ways of preventing an issue from occurring in the first place. This is what leads us to managed IT support services: your personal, dedicated team of IT experts that not only fix issues when they occur, but that also constantly improve the software and hardware so there is less chance they ever take place.

 

The real cost of downtime

Whenever your IT isn’t functioning at its full capability, you are losing money. Even the shortest of gaps in service can severely impact the customers’ experience, your reputation, and the output and efficiency of your entire staff.

In 2017, ITIC sent out an independent survey to measure downtime costs. It found that 98% of organisations say that a single hour of downtime costs over USD $100,000, with 81% putting the figure at over $300,000. For 33% of businesses, 60 minutes of downtime would cost their firms between $1 million and £5 million.

Figures from Statista.com reveal 24% of organisations worldwide reporting average hourly downtime costs amounting to between USD 301,000 and USD 400,000, with 14% reporting greater than USD 5 million in costs.

Elsewhere, IHS Markit surveyed 400 companies and found downtime was costing them a collective USD 700 billion per year – 78% of which was from lost employee productivity during outages.

 

Managed IT solutions are the key

Though we may never know the full cost of downtime, it is evident that it costs individuals and businesses a large amount of money. Don’t wait until your next emergency to remedy a problem; get the professionals in now to prepare for the future, rather than just fix problems in the present.

When you work with a managed technology services provider, your network and infrastructure are supervised 24 hours a day, all year round. As with any IT service, this means that issues will be fixed – however the real advantage is more long-term. As technology service providers perform regular proactive upkeep, there will be a reduced chance of suffering from issues in the first instance, and when (or if) they do occur, it will be far simpler to recover data thanks to full cloud integration.

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HOW TRADITIONAL INSURERS CAN USE TECHNOLOGY TO IMPROVE THEIR RELATIONSHIP WITH CUSTOMERS

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The customer experience with insurance is anomalous, in that one is only required to engage with their insurer if things are going wrong for them. To add value to the relationship, new technology and methods should be adopted, in turn driving loyalty and business growth, writes Oliver Werneyer, CEO and Co-founder of Imburse

Oliver Werneyer

Insurance is one of the oldest industries in the world and it is still, to this day, considered a grudge purchase. Looking back, insurance has a history of having a challenging relationship with its customers. According to an IBM study, in 2008, only 39% of consumers trusted the insurance industry. This percentage has stayed largely similar over the years, having reached only 42% in 2020. For any business with growth ambitions, good customer relationships are crucial.

I believe that now more than ever, the insurance industry not only needs to continue investing in improving relationships with customers, but to really think about new ways of doing so. At a basic level, the moment of truth for an insurance customer is when either they need to pay or are getting paid. Insurers can have the best policy wording, quick claims processes, apps and advisors, but if the experience to pay premiums or to receive a claim is bad, the customer immediately loses trust.

The pandemic has exposed this tenuous relationship between insurers and its customers. The need to move everything online and provide personalised services has exposed significant shortcomings in the service insurers provide. The industry has been too slow to adopt newer technologies and move engagements closer to the customer (self-service and empowered). This is largely due to the legacy systems and processes that insurers failed to modernise over previous years.

This means that the better-positioned incumbents have stronger customer relationships and benefit disproportionately from the pandemic, as they are able to win more new customers and convert customers from other insurers. They also benefit from significantly lower customer acquisition costs and much better growth, as illustrated in this McKinsey report. Even new entrants or InsurTechs are benefitting massively by focusing on improved customer experience and customer relationships.

However, it is never too late for insurers to build better relationships with customers. The main way to build a good relationship with a client is to make life easier, live up to promises and add value through the relationship with them. By working on these key elements, insurers can start building strong relationships with their customers, and, through the right partners, deliver this in a timely and non-disruptive manner.

 

Embedded Services

Insurance products often get a bad reputation because they cost money, but the benefits might only come much later, or never. Customers don’t get to experience a positive relationship with insurance products, either because they never claim and feel like they lost out, or they claim and they’re in a bad situation. By either embedding other services into the insurance experience to deliver a more transactional engagement, or embedding insurance products into general customer experiences such as online shopping or rewards, insurers can enrich customer relationships to generate value.

This way, insurers become a value-adding part of the customers’ everyday activities and not just a product that they have to pay for and may never get anything back from. One example is to embed micro-savings capabilities, often found in banking, into pension savings and insurance products. This can allow customers to save more for pension, attract younger customers and build a portfolio of fiscally disciplined customers.

 

Tailored journeys and personalisation

Customers have come to expect personalised journeys and engagements from product providers. Streaming services, social media, e-commerce or mobility services have shaped the customer expectations. Now, customers are also expecting personalisation for insurers.

Insurers need to invest very heavily in delivering personalisation and customisation to customers as they engage with their products. Failure to deliver this puts renewed strain on the value perceived by the customer and their relationship with the insurer. This applies not only to customer interfaces, but to aspects such as payments. Insurers should make it easy and pleasant for customers to pay and get paid. As the main moment of truth, payment experiences need to work optimally.

 

Perceived customer value metrics and delivery

The value customers derive from insurance products is, generally, monetary. Therefore, insurers must invest in product enhancement to increase its perceived value. Perceived value is not tied to a monetary value. By being able to choose between multiple payment options, such as a $300 pay-out to a bank account or a $320 Amazon voucher, the customer has a higher perceived value of the payment. This can be achieved by leveraging non-insurance products that can be purchased at a discounted price, exclusive access that the customer would otherwise not have or conversion into a form that is more useful to the customer.

Payments, for collection and pay-out, are at the core of delivering this value. An excellent payment experience immediately influences the customer to be positively inclined toward a product (PwC report). In order to offer this, insurers need to leverage multiple technologies and providers, offer any speed of transaction in any market, and deliver faster automation and better risk control. The key is to transform insurance products into transactional value-adds to customers’ lives and use this opportunity to continuously build on relationships with customers.

The main roadblock for insurers is still the operational implications of these activities and the costs that arise. In looking to build a better customer relationship, insurers need to look at partners that are operational enablers to deliver this. Partners that can solve the integration and speed-to-market problem so that insurers are enabled to deliver new capabilities, not bombard them with new ideas and no path to delivery.

Imburse, for instance, enables insurers to access all the global payment providers and technologies available in any market. Through a single connection, insurers can deploy any payment capability into any channel, for collection and pay-outs, without ever again needing to build a direct operational integration to the providers. This gives them full freedom to leverage payments as a key value driver and customer experience enhancer.

Building a better relationship with insurance customers is key for the insurance industry to close the protection gap. Incumbents are in the prime position to look at Insurtech and Fintech partners to rapidly and significantly modernise, digitalise and transform their own capabilities to deliver major enhanced value to their customers.

Imburse is an advanced universal payment connector that enables businesses to gain cost-effective access to complete global payments technology, regardless of the service provider. To learn more, please visit www.imbursepayments.com.

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