Innovation drivers, growth of payments, sources of innovation, mexico, tony craddock 2016
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Advancing Payments InnovationTony Craddock Director General, EPA EPA Lead Benefactor EPA Benefactors
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Transcript of Innovation drivers, growth of payments, sources of innovation, mexico, tony craddock 2016
Advancing Payments InnovationTony Craddock
Director General, EPA
EPA Lead Benefactor
EPA Benefactors
What qualifies me to be here?
The EPA’s focus
Emerging paymentsNew and innovative ways to move value
between people and organisations
Payments Innovation
1. What is driving innovation in payments?
2. How is global payments growing?
3. Where should you search for the next innovation breakthrough?
What is driving innovation in payments?Top drivers
1. Changing regulations
2. New technology
3. Growing and changing consumer demand1. Demographic shift – millennials, digital natives
2. Negative trust in banks
3. More use cases
4. Ubiquity of mobile devices
5. Government support
6. Profit potential in transaction origination • 22% ROCE v 6% ROCE on credit
7. Entrepreneurial talent
8. Investment
And investment is rising Global investment in Fintech, US$
• $23 billion of
venture capital and
growth equity has
been deployed to
Fintechs over the
past five years
• 50% of this was
deployed in 2014
alone
• Source: Cutting through the noise around
financial technology, McKinsey & Co, 2016
Largest part of Fintech is ‘Paytech’
• Source: Cutting through the noise around financial technology, McKinsey & Co, 2016 – 350 companies, not necessarily representative
47%
Payments Innovation
1. What is driving innovation in payments?
2. How is global payments growing?
3. Where should you search for the next innovation breakthrough?
40% of global banking revenues $105bn revenue
$30bn profit
McKinsey & Co, Global Payments 2015: A Healthy Industry Confronts Disruption
7% CAGR through 2019
CAGR to 2019 in EMEA 9%
“Payments growth is truly a
global phenomenon”
“Modernization of domestic payments infrastructures is under way”
“Cross-border payments inefficiencies are
opening doors for new players”
“Digitization in retail banking has important implications
for transaction bankers”
McKinsey & Co, Global Payments 2015: A Healthy Industry Confronts Disruption
“Fintech will take between
10% and 40% of banks’ profits in the next five years”
Source: Cutting through the noise around financial technology, McKinsey & Co, 2016
Payments Innovation
1. What is driving innovation in payments?
2. How is global payments growing?
3. Where should you search for the next innovation breakthrough?
The strategic approach to payments innovation
Ambition• State that innovation-led growth is critical and set targets that
reflect this
Investment• Invest in a coherent, time and risk-balanced portfolio of initiatives
with sufficent resources to win
Insights• Generate insights about your business, market and technology that
translate into winning value propositions
Business models • Create new business models that generate defensible profit streams
Speed• Accelerate the speed of innovation by developing and launching
innovations quickly
Scale • Launch innovations that can achieve scale
Networks • Create and capitalise on external networks
People • Motivate, reward and organise to innovate
Where do innovations really come from?
The greatest innovations come from . . . somewhere else
Do
nke
y + Ho
rseNature
= Mule
HistorySp
oo
n + Fork
= Spork
1874 2016
IndustryTe
xtile
s+ C
on
tactless
= Project Jacquard
PaymentsPa
ymen
ts+ Lo
gistics
= Collect+
From paymentsPayments and logistics
+37%
$36,000,000
PaymentsC
on
tact
less
+ Fashio
n
= KERV
MobilePa
ymen
tsTim
epiece
= Apple Pay
eCommercePa
ymen
ts+ M
ob
ile
= Judo
Incentive marketingG
ifti
ng
+ Mo
bile
= Givvit
GivvitCombines mobile and gifting
• Easy to use, intuitive smart phone application
• Enables sending of tangible, every day, low cost treats • Coffees, cakes, drinks, meals, flowers, cinema tickets, chocolates
• Amazon vouchers
• Treats are redeemed in-store at well-known brands
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Our conclusion
The greatest innovations come from . . . somewhere else
To find the next innovation I recommend you . . .
Go somewhere else
Some ideas for where to goThe Five ‘C’s
1. Customers
2. Countries
3. Consultancies
4. Communities
• Free library, www.emergingpayments.org
5. Conferences • PayExpo, June 2016, UK
• EPA’s Pay360 Digital Payments, June 2016, UK
www.emergingpayments.org
www.emergingpaymentsawards.com
Advancing Payments
InnovationTony CraddockDirector General, [email protected]+44 7803 203 405
