Banks consider innovation just as important as regulation for the first time in the payments field, with new developments set to outrank compliance in the future.

That’s according to a global study of over 300 banking and financial services executives, conducted by Cognizant, VocaLink and the Financial Services Club. It found that in the case of the top short-term priority, 32 per cent of respondents cited regulation and 33 per cent identified innovation. However, in the long term, just 17 per cent opted for regulation while 29 per cent named innovation as their most important consideration.

The fourth annual Changing Face of Payments report also revealed that ‘mobile first’ has now become mainstream, while disruptive technologies such as blockchain will potentially become an attractive alternative to traditional payment methods, transforming payment processing and acting as significant drivers for change this year.

Nine out of ten of the respondents felt that mobile devices would represent a mainstream option for person-to-person or person-to-business payments within the next five years. Four in ten also suggested that Apple and Google would dominate mobile payments over the next five years.

“The payments industry continues to face an unprecedented pace and scale of change, driven by a potent mix of social, technological, political, competitive and regulatory factors,” explained Tony Virdi, vice president of Cognizant’s banking and financial services practice in the UK and Ireland.

“Innovation is crucial, and traditional players need to adapt quickly with agile and secure technologies to improve their business models and deliver better customer experience,” he added. “It is essential that financial institutions are able to diagnose, adapt and respond to the changing market with agility in order to respond to ever evolving customer needs.”

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