The banking industry has seen significant changes in the past five years due to increased digitalization, new technology, such as AI, and changes in user needs and expectations.
Some of these shifts have been made tangible in how banks have incorporated digital platforms into their strategies, increased the investment in technology, created partnerships and collaborations with fintech companies, and focused on enhancing and streamlining customer services for users, as well as embracing APIs.
However, these improvements and implementations are only essential to remain competitive and keep up with the fast-paced, changing world. This presents a challenge for the payments landscape, which is also undergoing a transformative shift.
Manuel Muñiz, Managing Director of Globant Spain, and Rafael Vigueras, Finance Consultant Director of Globant, share their insights on the evolving payments value system, how digitalization is reshaping it, and what trends are worth noticing to remain competitive.
- Digital payments are taking over
With the advent of smartphones and widespread internet access, digital payments have surged ahead, surpassing traditional payment methods in both popularity and adoption. Rafael Vigueras states, “Figures reveal a clear paradigm shift in how individuals and businesses conduct financial transactions, demonstrating the increasing dominance of digital payments compared to traditional methods and how regions are adopting them at varying speeds.”
- There is a massive growth in mobile payments
One of the driving forces behind the rise of digital payments is the growth of mobile payments. Manuel Muñiz adds, “Digital wallets and mobile payment solutions have experienced exponential growth, representing 49% of e-commerce payments and slightly less (32%) at point-of-sale, according to the annual Worldpay report.” The convenience of mobile payments has revolutionized how customers make transactions, changing the dynamics of the payment ecosystem permanently.
- A digital market for banks
As digital payments services take center stage, banks are making it a priority to claim their share of the market. Rafael Vigueras explains that “the growth in the value of the payment business, especially in the acquiring world and specifically in e-commerce, where banks want to claim their share,” is one of the reasons why banks are now showing renewed interest in payment services networks. Additionally, payments are a core asset for banks in understanding their customers, building categorization, and service customization.
- Changing customer needs
With the evolution of mobile payments and the shift in payment methods, banks must evolve and adapt their offerings quickly to stay relevant in the market and stand out from their competitors. Rafael Vigueras underlines that “the evolution of mobile payments means that a business that used to be within the banking scope (card issuance and acquiring POS) is opening up.” This evolving landscape requires banks to strategize and develop capabilities that cater to their customers’ changing demands, needs, and expectations.
Globant’s role in the banking digital landscape
Globant, as a leading player in digital reinvention, is helping banks navigate and thrive amidst the shifts of today’s world and its complexity. Rafael Vigueras states that Banks must have a clear strategy before diving into acquisitions or developing capabilities. At Globant, “we have a privileged position with experts in strategy and the best customer experience and digital world development teams.”
By analyzing pain points customers face in the payment value chain and providing differential value, Globant aids banks in redefining their payment services, particularly in segments where the bank wants to grow, and identifying where we can provide differential value.
Integrating financial consulting services becomes crucial as digitalization continues to reshape the payment dynamic. Rafael Vigueras emphasizes that “the integration of financial consulting services is important so that each capability we have can adapt to the needs and strategies of each client.”
By understanding and responding to client needs, Globant remains at the forefront of the payments value ecosystem, ensuring efficiency, security, and seamless integration into the digital world.