Banks and Fintechs Are Global Leaders in Payments Innovation, Study by ACI Worldwide and Ovum Reveals
September 10 2019 - 08:00PM
Business Wire
- New ACI Worldwide and Ovum global Culture of Innovation Index
explores approach to innovation and business transformation across
banking, merchant, intermediary and corporate sectors globally
- Real-time innovation, new payment options and move into public
cloud infrastructure are priorities for trailblazing firms across
payments ecosystem
ACI Worldwide (NASDAQ: ACIW), a leading global provider of
real-time electronic payment and banking solutions, and leading
global research firm Ovum today launched the Culture of Innovation
Index, a global cross value chain view of the factors that drive
success across the banking, intermediary, merchant and corporate
sectors.* The Index identifies five types of organizations, as
defined by their approach to innovation and business transformation
- Laggards, Emerging, Tech-led, Advanced and Trailblazers – and
provides an interactive self-assessment tool to benchmark
organizations against peers and competitors.
The research, based on a global survey of almost 1,200
enterprises, reveals that retail banking and fintechs are the
leading sectors when it comes to payments innovation, with
regulation playing a key part in forcing industry change. The
merchants and corporates that are their customers are less
successful in balancing cultural, organizational and technology
drivers to achieve digital transformation.
According to the Index, real-time payments are a significant
driver of innovation among financial institutions, while merchants
and corporates are focused on new payment options (especially
mobile), with payment security a continuing concern. In addition,
trailblazers across the sectors plan to move mission-critical
workloads into public cloud infrastructure either this year or into
2020.
“The pace of change in the payments ecosystem continues to be
relentless,” said Mike Braatz, chief product and marketing officer,
ACI Worldwide. “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 organizations. Businesses that align cultural change
with technology leadership place themselves in the best position to
thrive in the future.”
“The aim of the Index is to identify not only the factors that
separate the most innovative businesses from the laggards, but also
what this means in terms of product innovation,” commented Kieran
Hines, head of industries, Ovum. “Digital transformation is not a
single project – it is an ethos, an approach, focused on
continuously translating business challenges into a series of
initiatives and projects to drive the organization forward.”
Key findings:
Banks and Intermediaries Real-time is a key driver of and
enabler for innovation
- 96 percent of retail banks, 94 percent of corporate banks and
92 percent of intermediaries globally report that they will develop
new and innovative services on top of their investment in RTP in
2019/20
Mission-critical workloads, including payments, can and
should move to the cloud
- 82 percent of corporate banks, 74 percent of retail banks and
79 percent of intermediaries (84% of fintechs) globally plan to
move mission-critical workloads into public cloud infrastructure in
2019/20
Capitalizing on potential of open payments is the biggest
competitive differentiator
- 91 percent state 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
Merchants The merchant segments (telecoms, retail,
digital goods and hospitality) featured in the Culture of
Innovation Index are spread across the Laggard, Emerging and
Tech-led categories, placing them behind fintech, retail and
corporate banking in the overall ranking.
There are significant regional differences in terms of
innovation
- In Europe, 35 percent of all merchants are classified as
Laggards, compared to 30 percent globally. European retailers
particularly fall behind their global peers, with 43 percent in the
Laggard category, reflecting the challenges that many have faced as
a result of the rapid shift in customer habits toward
eCommerce
- In contrast, merchants in Asia are highly focused on investing
in technology; 32 percent fall into the Tech-led group, with 26
percent in the Advanced category; only 19 percent are Laggards
- Merchants in the US are polarized, with 34 percent falling into
the Laggards and 16 percent into the Trailblazers category,
reflecting the growing gap between more traditional merchants and
many of the more digital native businesses
Customer experience is key
- Innovation in payments is focused on areas that enhance
customer experience – new payment options, a focus on mobile
(especially in-store), and a stronger, more seamless cross-channel
payment experience
- Security initiatives like PSD2 and SCA are driving the need for
technology innovation in order to balance fraud prevention with
maximizing conversion rates; regulatory requirements may drive
merchants to close the innovation gap relative to banks
Corporates Most corporates are Laggards, with higher
education, healthcare and utilities leading the sector
- Security remains a top concern for corporates with 50 percent
experiencing theft of payment data (up from 22 percent in last
year’s study)
- Investments in value-added services like mobile-optimized
billing and digital customer experience will improve customer
loyalty while driving innovation; 60 percent of Advanced and
Trailblazer corporates already offer mobile-optimized billing and
57 percent currently offer personalized communications to collect
payments
- Among the corporates segment (consumer finance, government,
healthcare, higher education, insurance and utilities), 18 percent
are in the Advanced and 4 percent qualify as Trailblazers, while 33
percent are in the Laggard category; at the sector level, higher
education is among the leaders, with 29 percent of organizations in
the Advanced category
*Methodology: The Culture of
Innovation Index, based on interviews with senior executives in
close to 1,200 enterprises, scores each organization based on its
plans and behaviors across a range of cultural, organizational and
technology-centric factors. Interviews covered a range of topics
relating to two broad themes: Inputs to the innovation
process (cultural and organizational drivers of innovation,
particularly the way that the organization is structured with
respect to identifying changing customer needs, competitive
challenges and new market opportunities) and Outputs from the
innovation process (outcomes from the process, in terms of
factors such as the adoption and investment in emerging
technologies as well as specific product innovation relating to the
business area in question). Across the study, the responses to more
than 100 individual questions were scored and weighted to produce
combined scores for each of the Input and Output categories.
About ACI Worldwide ACI Worldwide, the Universal Payments
(UP) company, powers electronic payments for more than 5,100
organizations around the world. More than 1,000 of the largest
financial institutions and intermediaries, as well as thousands of
global merchants, rely on ACI to execute $14 trillion each day in
payments and securities. In addition, myriad organizations utilize
our electronic bill presentment and payment services. Through our
comprehensive suite of software solutions delivered on customers’
premises or through ACI’s private cloud, we provide real-time,
immediate payments capabilities and enable the industry’s most
complete omni-channel payments experience. To learn more about ACI,
please visit www.aciworldwide.com. You can also find us on Twitter
@ACI_Worldwide.
© Copyright ACI Worldwide, Inc. 2019 ACI, ACI Worldwide, the ACI
logo, ACI Universal Payments, UP, the UP logo and all ACI
product/solution names are trademarks or registered trademarks of
ACI Worldwide, Inc., or one of its subsidiaries, in the United
States, other countries or both. Other parties' trademarks
referenced are the property of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20190910005737/en/
Katrin Boettger E-mail: katrin.boettger@aciworldwide.com Phone:
0044 (0)7776 147 910
Dan Ring E-mail: dan.ring@aciworldwide.com Phone:
781-370-3600
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