Retail banking and fintechs are the leading sectors when it comes to payments innovation, with regulation playing a key role in forcing industry change, according to a new study.

Research from payments firm ACI Worldwide and Ovum research based on interviews with senior executives in nearly 1,200 companies highlighted that many planned changes to culture, organisation and technology-centric factors in the coming years.

It found that the most forward-looking companies, defined as ‘trailblazers’ are prioritising real-time innovation, new payment options and a move into public cloud infrastructure by 2020.

A total of 96 per cent of retail banks, 94 per cent of corporate banks and 92 per cent of intermediaries globally report that they are planning to develop new and innovative services on top of their investment in Real Time Payments (RTP).

The survey found that “mission-critical” workloads, including payments, can and should move the cloud, with 82 per cent of corporate banks, 74 per cent of retail banks and 79 per cent of intermediaries, including 84 per cent of FinTechs globally plan to move mission-critical workloads into public cloud infrastructure in the financial year 2019-20.

Almost all (91 per cent) of respondents from across sectors said that the potential of Open Banking technology to enable financial data sharing and more open payments ranks as the biggest competitive differentiator.

In addition, 91 per cent said that the move to open banking has helped change the way they approach delivering new products and services, with 89 percent actively exploring a platform strategy.

The study also revealed that security initiatives like the second payment services directive (PSD2) and Secure Customer Authentication (SCA) are driving the need for technology innovation aimed at ensuring fraud prevention while maximising conversion rates.

In addition, regulatory requirements may drive merchants to close the innovation gap relative to banks.

Commenting on the findings, Mike Braatz, chief product and marketing officer at ACI Worldwide said: “The pace of change in the payments ecosystem continues to be relentless.”

He added: “More than ever before, innovation will be a significant driver of business success. While technology is – and will remain – an important part of the answer, it is people who truly change organisations. Businesses that align cultural change with technology leadership place themselves in the best position to thrive in the future.”

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