Ernst & Young (EY) has published findings from a survey focused on payment regulations, drawing responses from decision-makers at prominent banks.
The survey, conducted between January and February 2024, involved 26 banks and payment service providers across the region. It mainly revealed that banks anticipate various structural changes stemming from the new regulations, including shifts in customer behaviour and heightened competition. Specifically, respondents expect a demand for enhanced user experiences and a preference for digital payment methods. Additionally, there's an expectation for customers to seek greater control over their data.
Furthermore, new regulations in the payments space are expected to pave the way for new challenges in the industry, intensifying pressure on banks to balance lower fee-based revenue with elevated consumer expectations. Consequently, banks are urged to undertake comprehensive organisational changes, spanning digital business models, product offerings, strategy, IT infrastructure, and legal frameworks.
Despite the anticipated impact on payment revenues and the substantial investments required, the survey reveals relatively low awareness among C-suite executives regarding EU payment regulations. This knowledge gap underscores the importance of bolstering engagement at the executive level to ensure adequate resources for regulatory adaptation.
Looking ahead, proactive entities are preparing to leverage the new regulations as an opportunity for customer-centric innovation, improved fraud prevention, and collaborative initiatives within the fintech ecosystem.
Strategies include harnessing advanced data analytics for personalised customer experiences, supporting fintech collaborations for innovation and fraud prevention, introducing new payment options and services, promoting Embedded Payment technologies for seamless experiences, exploring new business models for revenue diversification, and expediting cross-border transactions within the EU to expand market reach.
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