VC investment, accelerator programmes and the deployment of new technologies through allegiances with FinTech outfits should be priorities for banks as various new payment capabilities come to the fore. According to a new report by BNY Mellon, Innovation in Payments: The Future is FinTech, cutting-edge technology holds great potential to transform how consumers and clients initiate and process transactions. It’s no longer just a case of new currencies or faster payment methods, but an entire rethinking of how transfers of any “value” might be undertaken.

“The FinTech era is upon us and banks shouldn’t merely be mindful of this; they should also have a clear strategy in place in order to adapt to and benefit from FinTech-fuelled changes,” says Ian Stewart, chief executive officer at BNY Mellon's Treasury Services business. “While the banking industry is traditionally conservative about change, any hesitation or ambivalence here could be costly. In order to position themselves at the centre of the payments industry of tomorrow, banks must act today to understand, interact with, and cherry-pick from the full smorgasbord of FinTech developments.”

While regulation has put pressure on bank resources, they must prioritise technology-focused strategies, the report argues. The financial services industry has one of the highest ratios of IT spend as a proportion of revenue, with levels expected to reach $197 billion in 2015. Yet over three quarters of this is estimated to be in maintenance rather than new services.

To view the full report, visit: https://www.bnymellon.com/us/en/our-thinking/innovation-in-payments-the-future-is-fintech.jsp

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