SW Sponsored Content Left 3 160x1200

SW Sponsored Content Right 3 160x1200

SW Sponsored Top Banner 3 705x108

Tuesday, 04 February 2020 10:35

Banks risk loss of US$3 billion in payments revenue to digital payments growth, non-bank competitors Featured

By

Australian banks are at risk of losing US$3 billion in payments revenue by 2025 due to the growth of digital payments and competition from non-banks, according to a new research report.

The new research by professional services firm Accenture reveals that up to 13.7% of payments revenue could be lost, with payments revenue in Australia likely grow at an annual rate of 3.7% by 2025 (from US$18.7 billion in 2019 to more than US$23 billion by 2025) - and “only the banks that change their business models and adopt the latest technologies and focus on providing added value services will capture a share of this growth”.

The research is complemented by a survey of 240 payments executives at banks across 22 countries to determine how they plan to mitigate and capitalise on the disruption in payments to grow customer loyalty, revenues and profitability, including in Australia.

The report is based on a revenue risk analysis model that Accenture says it developed to measure trends in how consumers pay and projected changes in merchant behaviour, technology and regulation.

The Australian research also highlights that:

  • Free payments will put 8.3% of payments revenue at risk in Australia
  • Competition from non-banks in invisible payments — where payments are completed in a ‘virtual wallet’ on a mobile app or device — will put 4.8% of bank revenues at risk
  • Card displacement by instant payments, where funds are settled and transferred in real-time and banks make little to no interest, is projected to put an additional 0.6% of payment revenues at risk.

Alex Trott, who leads Accenture’s banking practice in Australia and New Zealandsaid: “The world of instant, invisible and free payments is here to stay, squeezing margins further on a business that was already feeling a lot of pressure from new competition”.

“The payments market is booming and there’s a multi-billion-dollar opportunity for those willing to invest in new technologies and business models based on the new digital landscape ahead. Banks lagging behind risk being relegated to the plumbing of payments,” Trott said.

“The digital transformation underway in payments will have a deep impact on all industry players and banks will have to fundamentally change how they think about their revenue in this area.

“The billions of dollars banks previously earned from some of these channels will dry up, so they’ll need to develop new digital business models to compete in this new era.

”These models must be developed with security, trust and governance at the core, bringing together human and machine to ensure the integrity and safety of high speed and continuous payment flows.”


Subscribe to ITWIRE UPDATE Newsletter here

Active Vs. Passive DWDM Solutions

An active approach to your growing optical transport network & connectivity needs.

Building dark fibre network infrastructure using WDM technology used to be considered a complex challenge that only carriers have the means to implement.

This has led many enterprises to build passive networks, which are inferior in quality and ultimately limit their future growth.

Why are passive solutions considered inferior? And what makes active solutions great?

Read more about these two solutions, and how PacketLight fits into all this.

CLICK HERE!

WEBINAR INVITE 8th & 10th September: 5G Performing At The Edge

Don't miss the only 5G and edge performance-focused event in the industry!

Edge computing will play a critical part within digital transformation initiatives across every industry sector. It promises operational speed and efficiency, improved customer service, and reduced operational costs.

This coupled with the new capabilities 5G brings opens up huge opportunities for both network operators and enterprise organisations.

But these technologies will only reach their full potential with assured delivery and performance – with a trust model in place.

With this in mind, we are pleased to announce a two-part digital event, sponsored by Accedian, on the 8th & 10th of September titled 5G: Performing at the Edge.

REGISTER HERE!

BACK TO HOME PAGE
Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

Share News tips for the iTWire Journalists? Your tip will be anonymous

WEBINARS ONLINE & DEMAND

GUEST ARTICLES

VENDOR NEWS

Guest Opinion

Guest Interviews

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News

Comments