Blockchain: Beware the Hype

Blockchain: Beware the Hype

At Celent, we just published a new research report with the same title as this blog – Blockchain: Beware the Hype. Why such a title? Isn't blockchain the coolest technology out there at the moment?

It is. At Celent, we firmly believe that blockchains and other shared ledger platforms will be a powerful catalyst for change in financial services and other industries for many years to come. There are some very promising use cases, particularly in cross-border payments, corporate banking, and capital markets, and even outside of financial services, in identity management, trade logistics, healthcare, and many other sectors. Even if “blockchain” ends up being a small component of the ultimate solutions, it facilitates new thinking that forces organisations to reimagine how they work, both internally and externally. And that can only be a good thing.

However, we do caution against succumbing to the hype, which is inevitable for any new exciting technologies. Blockchain hype is particularly acute, given the complexities of the underlying technologies. Nobody wants to be left behind when proclaiming the benefits of blockchain, but not everybody truly understands how those benefits can be achieved.

Luckily, the investment going into shared ledger technologies is resulting in a growing number of individuals and organisations lending their collective resources to explore deeply how financial services can benefit from these technologies. Their efforts are directed at exploring practical use cases (e.g. Everledger, Ripple, Shocard), developing new technology and tools (e.g. Ethereum, Intel, Multichain) and building out infrastructure for blockchain initiatives (e.g. IBM, Microsoft), with a number of firms engaged across the board. And the collaborative efforts such as the Hyperledger project or R3 are also bearing fruit – for example, R3 recently announced Corda, a new distributed ledger platform specifically designed for financial services.

We do think that is the way forward: thinking carefully about suitability of technology for the business problem at hand, and deconstructing blockchain technology to its fundamental components only to assemble the most attractive features in a way that makes sense for financial services. That is what will ultimately help us all move beyond the hype.

Celent research clients can access the full report here.

The diversity of payments in the US

The diversity of payments in the US

As a payments geek, I am always curious about payment experiences in various parts of the world. In the last month I had a couple of trips to the US – to New York and to New Orleans – and they just reminded me how diverse the US payments environment is. And I am only talking about the physical POS; I haven't really ordered anything online or in-app while I was there.

First, a few observations around EMV. As I live in the UK, all my cards are Chip and PIN, and the US market has been migrating to EMV for a while now. Of course, the migration can't happen overnight – some merchants have already upgraded their terminals, but many haven't yet. Also, there is no mandate in the US to use offline PIN, so "chip and signature" EMV cards are common amongst the US issuers. As an end-user, I experienced a full gamut of payment scenarios:

  • Majority of merchants would simply take my card, swipe it and give it back to me straight away. Not one of them checked if my card is even signed, let alone if the signatures matched…
  • On a few occassions, I was asked to insert the card into an EMV terminal and enter my PIN. And then we waited. And waited more. And a bit more. I knew EMV transactions take longer in the US, but I didn't realise just how much longer… Not surprisingly, the networks had to do something about it and have announced software updates (e.g. Visa's Quick Chip for EMV and MasterCard's M/Chip Fast) to speed up transaction processing.
  • Not a single eating establishment I visited had a handheld EMV terminal. All of them just took my card and disappeared for a while in the "back of the room" – a practice that sends shivers down the spine for most Europeans 🙂
  • On at least one occassion, I entered the PIN, yet the salesperson was still looking for a signature box on the receipt and wanted me to sign it. I had to explain that PIN replaces the need for signature; of course, these things will disappear once merchants learn more about the EMV cards.

A number of merchants in New Orleans had a Clover POS station. It looked really sleek on retailer desks and transactions seemed fast and easy. I asked a couple of them what they thought of it, and they all said they were very happy with the device, its looks and ease of use.

As a side note, American Express cards seem to be far more widely accepted in the US. In Europe, I got into a habit to double check at new places if they take Amex; in the US, that seems unnecessary.

Of course, it's no longer just cards. US was the first market in the world to see the launch of Apple Pay, Android Pay and a number of other digital wallets. The challenge for many of these wallets is the lack of places where they can be used, as contactless terminals remain relatively rare, albeit growing. However, when they can be used, they work very well. The biggest advantage that I can see as the UK user of Apple Pay is that in the US I can use Apple Pay for any transaction, whatever the amount (as long as my issuer is happy to authorise it). I had no problem paying for a taxi ride from New York's JFK airport to downtown by Apple Pay ($70+ fare with the tip). In the UK, Apple Pay and Android Pay (which has just launched this week) are subject to the same contactless card transaction limits and can only be used for transactions of £30 or less. Again, we expect this to change, as contactless terminals get upgraded.

I was also intrigued to see a PayPal acceptance badge at one of the POS terminals. I asked the cashier if it was a popular payment method amongst their customers. The cashier said that it seemed new to him, and that he personally had yet to see anyone trying to use it. I must admit, I am a fan of the PayPal wallet and use it whenever I can, but nearly all of my transactions are online/ via a mobile app. This time, I only noticed the PayPal sign after I already started paying by card, so can't quite report on the actual experience…

And yet, cash remains hard to beat, with many places only accepting cash. I refrained from visiting any of the dodgier establishments on New Orleans' Bourbon Street, but I didn't even had to in order to experience the power of cash. Most sellers in the French Market clearly prefer cash; getting into (jazz) Preservation Hall is "cash only" at the door, and while not every place has the sign as artistic as the one in the picture below, "cash only, one drink minimum" was a common mantra of many bars with live music.

cash only

Clearly, there is a lot of payments innovation in the US. Various wallets and innovations in POS contribute to the diversity of end user experiences. Such diversity is a good thing and if anything, it will only increase, as customers will have increasingly more ways to pay. And as the migration to EMV continues, the undesireable kind of diversity should reduce as well.

Congratulations to Celent Model Bank 2016 Winners!

Congratulations to Celent Model Bank 2016 Winners!

Last week many of us at Celent were in New York attending our Innovation and Insight Day on April 13th. It is Celent's flagship event during which we announce Model Bank and Model Insurer winners and celebrate their achievements. In addition, the program includes keynote speeches from industry leaders and Celent analysts, plenty of opportunities to network with peers, and even to experience some of the latest technologies first hand, courtesy of our sponsors.

The theme of this year's event was "Financial Services Reborn", and the Museum of American Finance on Wall Street provided an inspiring setting to celebrate innovation in financial services. Craig Weber, Celent CEO, kicked off the proceedings drawing insightful parallels between the battle of Alamo and the future of financial services. It must have been the first time in Craig's career that he had to come up on stage to the soundtrack of hip hop music, an extract from the Broadway musical "Hamilton", but it set the tone for the rest of the day – to expect the unexpected and to be open to new ideas.

Both of our guest speakers – Nadeem Shaikh, Co-Founder and CEO of Anthemis Group, and Leanne Kemp, Founder and CEO of Everledger – thrilled the audience and opened everyone's eyes to the opportunities presented by Fintech and Blockchain respectively, while our colleague Will Trout spoke eloquently about consumer-led convergence. A big 'thank you' to all the speakers, as well as the sponsors supporting the event!

The rest of the day was all about celebrating the achievements of Model Bank and Model Insurance award winners. As many of this blog's readers know, the vision for Celent’s Model Bank research, now in its ninth year, is to spotlight effective uses of technology in banking. This year we received a record number of submissions – well over 100 – that came from all over the world; the nominations were spread equally between North America, EMEA and APAC. The award winners come from four continents and nine countries and range from credit unions and microfinance institutions to the world's largest banks.

Celent Model Bank 2016 winners are:

  Model Bank 2016 Categories

  Award Winners

  1. Digital Banking Transformation

  Citizens Bank, US

  DenizBank, Turkey

  Garanti Bank, Turkey

  Santander, US

  2. Omnichannel Banking

  BECU, US

  Beyond Bank, Australia

  Standard Chartered Bank, Korea

  3. Digital Payments and Cards

  Bank of America Merrill Lynch, US

  RBC, Canada

  4. Corporate Payments and Infrastructure Modernization

  Bank of China, China

  CBW Bank, US

  5. Cash Management and Trade Finance

  CIBC, Canada

  HBL (Habib Bank), Pakistan

  6. Security, Fraud, and Risk Management

  Alfa-Bank, Russia

  USAA, US

  7. Legacy Transformation

  Sberbank, Russia

  Umpqua Bank, US

  Vietnam Bank For Social Policies, Vietnam

  Model Bank of the Year

  Eastern Bank, US

As always, we published a series of reports with detailed case studies of all winning initiatives. Celent research subscription clients can access the Model Bank of the Year and individual category reports via our website.

This year we also introduced a new award, Model Bank Vendor. We wanted to acknowledge the vendor role in helping multiple clients achieve technology or implementation excellence, one of our judging criteria, and to extend our appreciation to the entire vendor community, which is instrumental in the ongoing success of the Model Bank program. Celent recognized two companies as Model Bank Vendors for 2016:

  • EdgeVerve Systems
  • Nucleus Software

Congratulations to all our award winners! We are grateful to have been exposed to so many extraordinary initiatives and the talented individuals responsible for their success. We look forward to continuing with the Model Bank program next year to identify and award the most impressive banking technology initiatives from around the world, and will begin accepting nominations again in September – stay tuned!

 

The paradox of digital payments

The paradox of digital payments
At Celent we run a couple of Banking research panels – one on Branch transformation and another on Digital – where any US-based bank or credit union can participate in surveys we administer on a regular basis. Last week we published the report with findings of our survey we conducted in November 2015 on Digital Payments. 42 institutions participated and answered our questions on:
  • How important are digital payments in the context of other priorities?
  • What has been the industry’s experience with digital payments?
  • Where is the industry in its EMV migration journey?
The survey results highlighted the paradox of digital payments:
  • Nearly everyone thinks that digital payments are important, but only 13% view it as strategic priority, aim to lead and invest accordingly. 63% aim to be fast followers and another 23% only invest to stay on par with peers.
  • 71% of participants agree that financial institutions (FIs) should offer branded digital payments (e.g. own digital wallet), but they are more likely to participate in third party wallets, such as Apple Pay, Android Pay and others, than to invest into their own HCE wallets – 46% have no plans for HCE.
So, what should the FIs do in digital payments? Accept that “payments are disappearing” and focus on ensuring that their payment credentials are available for customers to use wherever they want them or fight back with their own branded wallets? Does it have to be an “either/ or” choice? Can they/ should they do both? What are your thoughts? P.S. Our panels are open to any FI in the US – Celent clients and non-clients – and we share the results report with all respondents. If you’re a banker and would like to participate in future Digital Panels, please contact info@celent.com.

Banks and Fintech: friends or foes?

Banks and Fintech: friends or foes?
The question in the title of this post has become a rather hot topic lately. Earlier this week, I was kindly invited to join the panel on “what’s hot in Fintech” at Citi’s Digital Money Symposium, and it was one of the central questions we debated as a group. My colleague Stephen Greer has also discussed Bank-Fintech relationships on these very pages, for example, see here and here. The question is not necessarily new. Back in 2011, I wrote a report titled Innovative Payment Startups: Bank Friends or Foes? In the report, I looked at companies presenting at the inaugural FinovateEurope and concluded:
“Banks have little to fear from this particular group of payment innovators. Some solutions actively support the established payment systems, in particular cards. Others are expanding the market by enabling payment transactions in places where they may not have been possible before.”
There is no question that the pace of innovation has increased in the last five years since that quote. However, today we also have many startups and Fintech companies that are actively serving banks with their technology tools (from authentication and fraud management to back- and middle-office systems). Others, such as Apple partner with banks to develop propositions that “wrap around” a card transaction. In the last few months, we have also noticed an increase in stories around collaboration between banks and Fintech. Most payment unicorns (private companies with valuation of over $1bn) achieved their impressive scale and valuations mainly by competing with banks in a specific niche and focusing on being the best in class in that area. Often, it is in merchant services, such as those provided by the likes of Stripe, Adyen, Square, and Klarna, while TransferWise is successfully attacking banks in the international payments market. Yet, even among the unicorns there are those that have chosen to partner with banks, such as iZettle which has partnerships with Nordea, Santander, and other banks in Europe. TransferWise, a unicorn that has long been positioning as an alternative to banks, is now partnering with LHV, an Estonian bank, to offer its service via the bank’s online and mobile channels, and is rumoured to be in discussions with “up to 20 banks” about adopting its API. The Wall Street Journal recently quoted Ben Milne, the CEO of Dwolla, as saying, “Time humbles you. Working with banks is the difference between running a sustainable business and just another venture-funded experiment.” It has become fashionable to pronounce the death of banking. The disruption caused by Fintech is supposed to blow the old-fashioned banks out of the water. Of course, we acknowledge the disruption and recognise that banking is changing. We simply don’t agree that banks will disappear — at least not all of them:
  1. Today’s smartest banks will figure out a way to stay relevant for their customers.
  2. Some of today’s disruptors are becoming banks (e.g. Atom, Mondo, Starling in the UK)
  3. Both Fintech and banks are starting to acknowledge the value they each bring to the relationship and will learn to collaborate effectively.
My colleague Gareth Lodge and I have just published a series of reports on reimagining payments relationships between banks, retailers and Fintech. Commissioned by ACI Worldwide, the reports take a perspective of each party and explore this topic in a lot more detail. Just like a family is locked into a set of relationships, banks, retailers, and FinTech form a payment ecosystem that we believe is more symbiotic than many would want to admit.

Model Bank nominations deadline extended to December 11th

Model Bank nominations deadline extended to December 11th
Today we announced that we are extending the deadline to submit nominations for Model Bank 2016 awards until December 11th. Thank you to all of you who already submitted, and to those who told us that you are working on your submissions. We appreciate that this is a busy time of the year for everyone, and we hope that the extra time will make it easier for you and your clients to submit the initiatives. And of course, it’s not too late to get started if you would like to share how your bank is using technology in a differentiating way. You can see more details on the Model Bank program in my earlier blog, or better yet, by going to the initiative nomination page online and downloading a complimentary report, Becoming a Model Bank: A Guide to Winning Celent’s Main Award for Financial Institutions. Don’t forget, in addition to bragging rights for winning the most prestigious Celent’s Banking award, you also have the case study of your initiative featured in our reports and receive complimentary invitations to Celent’s flagship event, Insight and Innovation Day in New York. 2015 was a sold-out event, and 2016 promises to be even better. It will be on April 13th 2016 at the Museum of American Finance. Tickets are already selling fast, so submit your initiatives now for a chance of winning the Model Bank award and free entry, or register here.

Reconciling TouchID with Bank T&Cs

Reconciling TouchID with Bank T&Cs
Apple’s TouchID is brilliant – I now use it not only to unlock my phone, but also to log into my Amazon account. I can also use it to log into my Amex app and my bank’s mobile banking app. And of course, it is the way to initiate Apple Pay transactions. The only trouble is that none of those providers can be assured that it is really me doing all of this. TouchID allows registering up to 10 different fingerprints, and authenticates the user locally by matching his or her fingerprint to the registered templates. However, authentication is not the same as identity – banks and other apps know it is someone authorised to use that phone, but they don’t know it’s me, Zil Bareisis. It is likely to be me, but it could also be my wife or my kids. It could even be a total stranger if in some bizarre bout of insanity, I allowed them to register their fingerprint with my phone. The Telegraph reported last week that the UK banks are very much aware of this issue and have decided to take a hard stance:
“Banks have warned customers that if they store other people’s fingerprints on their iPhones they will be treated as if they have failed to keep their personal details safe.
This means the bank can decline to refund disputed transactions or refuse to help where customers claim they have been victims of fraud.”
According to the paper, “the banks’ position is typically buried in the detail of bank account Ts & Cs”, something as we all know that most people accept without reading in detail. I can appreciate the banks’ concerns, but I wonder if they are somewhat overblown. Although this will change in time, most of Apple Pay transactions in the UK are still capped at the contactless limit (£30). Any of my family members today can take my contactless card and use it as contactless without any PIN. I haven’t heard too many suggestions that I should keep my card locked away from my family members. However, if this were to happen, I should be prepared to accept my family’s transactions and not report them as fraud. I am no legal expert, but it doesn’t feel like inserting protective statements within T&Cs is the way forward. First, it’s not very transparent. Second, if the issue were to arise, it is something that would not be easy for banks to prove. Could consumers just delete all the other fingerprints in case of a dispute? Finally, it’s just poor customer service. Instead, banks should invest into educating consumers about digital technologies and how to use them safely and responsibly. Even if it’s as basic as, “don’t allow strangers to register their fingerprints on your phone” and “be prepared to accept your family’s transactions and not dispute them as fraud.” As the value of Apple Pay transactions grows, banks ought to consider deploying additional techniques, such as behavioural analysis to authenticate the users and minimise fraud. As with most security, multi-layered approach is likely to work best.

Looking back on Money 20/20

Looking back on Money 20/20
Last week my colleague Dan Latimore and I were at Money 20/20, which in four short years has become a “must attend” event in payments and Fintech. I’ve been there at the very beginning and it has been exciting to watch it grow from about 1,000 of us in the first year to over 10,000 this year. Congratulations to the Money 20/20 team for this incredible achievement! And thank you to all of those who took time out of their busy schedules to meet with us. As I was reflecting back on the last week, I realised that it’s no longer possible to take in all of Money 20/20. In the first year, even with parallel session tracks, you could absorb a lot of what was happening “by osmosis”, just walking the floors of Aria. As the event grew and moved to a much more spacious Venetian, somewhat paradoxically, the experiences got more individual, depending on which sessions and keynotes you attended, which booths you visited and which people you met. Here are some of my key takeaways:
  1. Perhaps the biggest and most talked-about announcement of the show was Chase Pay and its partnership with MCX. Chase is developing a wallet that will be available to all of its 94 million cardholders to use in-store, in-app and online. The wallet is not planning to use NFC at the POS, with QR codes set to be a most likely method, and as a result will be available on any smartphone device, irrespective of its operating system. On the merchant side, Chase is offering a fixed fee processing which will make merchant costs more reliable and predictable with an opportunity to “earn it down” based on volume. Partnership with MCX gives Chase Pay access to the largest merchants in the country. In addition to a stand-alone app, Chase Pay will also be available as a payment option inside CurrentC, the wallet that MCX has been piloting in Columbus OH, the results of which were presented and greeted with a tentative applause during another keynote at Money 20/20.
  2. Mobile payments market in the US is only getting more complex, with Apple Pay, Android Pay and Samsung Pay already there, more “Pays” on the way (e.g. LG Pay), and now Chase Pay and revived expectations of CurrentC. Make no mistake – while most “pays” look similar, they offer a different customer experience (e.g. how to trigger payment, where it is accepted, etc.) and require issuers to adapt their processes to each of them. At the show, I picked up strong signals from issuers that they want to have more control over digital payments and are looking at various options, including HCE wallets, to achieve that.
  3. The Tokenisation panel was one of the best sessions I attended with panelists from the networks, issuers, merchants and processors sharing their views how tokenisation is going to evolve. It includes tokenisation for cards-on-file and e-commerce transactions (both Visa and MasterCard announced tokenisation of their Checkout and MasterPass wallets respectively), new approach to 3D Secure, introduction of Payment Account Reference (PAR) – a non transactable ID that ties together all the tokens, and tokenisation for DDAs which The Clearing House is working on. According the panelists, tokenisation is the much-needed “abstraction layer” that will be a “foundation for the next 20 years of innovation.”
  4. Biometrics are entering mainstream, with FIDO alliance laying the groundwork for how to deploy biometrics for authentication. Sorting through a myriad of biometrics providers and approaches (e.g. fingerprints, hands, voice, eyes, etc.) is a headache and eventually, it will be consumers that will decide which approach works best for them. FIDO alliance delivers a standard irrespective of what the consumers choose. Looking into the future, the panelists envisaged a behavioural approach where the providers use a number of data points to constantly verify that the user behaviour is consistent with a typical pattern and authenticates automatically in the background, a process called “ambient authentication.”
  5. Conversations about cryptocurrencies have matured enormously over the last 12-18 months. The focus is now very clearly on blockchain technology and how the financial services industry can best deploy it. A number of exciting partnerships are emerging in this space, from TD Bank and RBC working with Ripple on domestic and cross-border P2P payments as well as more efficient transfers between subsidiaries, to Nasdaq’s partnership with Chain, to the R3 consortium. Perhaps the most exciting demo I’ve seen was Visa’s connected car experience, where the driver could review the new leasing document on the screen, sign it, register it on a blockchain and drive off. Time will tell if this is how we will be getting to drive cars in the future, but it only shows the opportunities out there.
Finally, I’ve been asking others at the show what they thought were the key themes. Interestingly, two themes came up very consistently – innovation and focus on customer experience. The latter manifests itself in so many different ways, from making it easy and intuitive for consumers to pay to solving very specific merchant problems, whether it’s around acceptance and security (Verifone, Ingenico, Poynt), conversion rates (BlueSnap, Affirm), lending (PayPal, LendUp) or seamless integration of payments into the overall proposition (Stripe, First Data). The third theme seemed to be a little more contentious. Some said it was all about disruption, while others talked about collaboration. I actually agree with both – to me they are two sides of the same coin. The disruption in FS is real, but many find that the way to deal with it is through collaboration. Few, if any, have talked about demolishing the world as we know it today; instead, all are focused on how to make it better. I know I only scratched the surface here. For example, there were also some very interesting announcements about domestic P2P/push payments such as Early Warning buying clearXchange, Dwolla partnering with CME Group, and The Clearing House working with Vocalink. And companies like Earthport, PayCommerce and Ripple are making an impact on cross-border payments. But as I said, it’s impossible to take it all in, and no write-up can do full justice to Money 20/20 – you just have to be there… See you next year in Vegas or perhaps even in Copenhagen at Money 20/20 Europe!

First thoughts on marriage between Visa Inc. and Visa Europe

First thoughts on marriage between Visa Inc. and Visa Europe
Today Visa Inc. announced it would be acquiring Visa Europe, subject to regulatory approvals. The press release is here; the executive team also held an investor call earlier today – the recording and the presentation are here. The deal was widely expected, and so should not be a surprise to anyone who follows payments. Still, it poses a number of questions, such as, for example, how effective the combined entity will be in dealing with intricacies of the European market, and whether this would lead to the Europeans calling (again) for a new separate pan-European card scheme. It’s true the European payments market has unique dynamics in terms of regulation and competition, both in cards and in payments more broadly. PSD2 will have profound effects on the existing market players, including Visa. Depending on the final interpretations, some provisions such as scheme and processing separation requirement might introduce undesirable complexities to the integrated Visa. However, I am sure none of this news to Visa’s management and they must have a plan for how to deal with the regional challenges. Visa has committed to maintaining a strong European presence, including an “empowered European leadership team and in-country resources”, “local data center”, and “differentiated country and regional strategies.” Furthermore, the potential synergies are real – a more consistent product set and fewer duplicated efforts should help Visa drive innovation and move to digital on a global basis.​​​ Visa also said it was planning to incur up to $500 million of integration-related costs over the next 4-5 years, most of which would go towards integrating Visa Inc. and Visa Europe systems. In the past, I have seen on occasions Visa Europe appealing to European banks by playing up its ownership structure in Europe and contrasting it to the global approach of MasterCard. This argument is now gone – both networks will be global commercial entities. Would this re-open calls for a pan-European card scheme? I had a look at this issue a few years ago in the Celent report, “In Search of a Third European Card Scheme” and concluded that it was “time to move on.” I still stand by that conclusion today; in my view, it has always been a politically motivated initiative, with no particularly clear business rationale. When “plastic” was the main/ only form of electronic payment, it at least made more sense to consider various options. Now, the world is changing rapidly, as digital payments and real-time networks between bank accounts emerge. Let’s hope that the European banks will find better use for their financial windfall from this transaction than trying to create a new pan-European card network. Given the original “put” option, it was always more a question of “when” rather than “if”. Congratulations to Visa team for deciding to move forward with the deal. P.S. Stay tuned for my reflections on last week’s Money 20/20; I was planning to post those today as well, but Visa’s deal prompted a number of inquiries, so wanted to offer a few thoughts on that first.

Musings from the airplane

Musings from the airplane
I am not writing this literally on the plane, but I might well be – this is a conference season, so many of us are on the road. My colleagues have already been blogging from SIBOS, Finovate, Finnosummit and other events. I wanted to share my own observations from the events I attended. EMV, tokenisation, mobile, Blockchain – these were just a few major themes discussed in depth in Las Vegas at PayThink. This used to be known as ATM, Debit and Prepaid Forum and remains THE event to go to discuss these topics in the United States. It is organised by PaymentsSource and chaired (for the last 12 years!) by Tony Hayes, my colleague and Partner at Oliver Wyman. Thank you to the organisers for inviting me to moderate a panel on lessons learned from cards platform transformations, and many thanks to my panelists – senior executives from FIS and e-Global for sharing their insights. We talked about the drivers forcing processors and issuers to upgrade their processing platforms, such as growing transaction volumes and types, need for flexibility and speed when adding new products, and how the processing proposition changes. Processors are now moving away from out-of-the box to componentised solutions, are changing how they package and price their services, and are re-thinking the business terms how to engage with clients. When working with software vendors, our panelists stressed the importance of “soft aspects”. Of course, the technology matters and must meet the requirements to get you on the short list. However, often it will be your people that will win or lose you the deal – flexibility and commitment they demonstrate during proof of concept and other advanced stage interactions are often major factors when clients make a final decision. Last week I was in Lithuania, the country I grew up in and left over 20 years ago… I go back every year, but this was the first time I went there as an analyst. The Central Banks of Lithuania and Sweden jointly organised a conference on the role of Non-Banks in the Payments Market. I was kindly invited to join the panel to discuss “what’s in the future.” As our clients know, our view at Celent is that the disruption in banking is real and that, as a result, banking will change, however, banks will not disappear. Of course, some of them will, but others will adapt, and some of the today’s non-banks will become banks. The challenge for all is how best to manage that tension and the ongoing evolution of the industry. In between travels, I also published a new report on tokenisation, a hot topic in the industry at the moment. The speed of tokenisation evolution in the last 12-18 months has been remarkable, and there are no signs of slowing down. Celent clients can access the report here. Finally, it’s not long before we board the plane to go back to Vegas to Money 2020. The meteoric rise of this event has been absolutely amazing – fours years ago there were about 1,200 of us; this year, the organisers expect 10,000! My colleague Dan Latimore and I will again be there as well. My diary is already full, but if you are a client and would like to say hello, do reach out to your account managers and we’ll do our best to meet up. With everything going digital, the physical handshake remains as important as ever! Safe travels!