FinTech LIVE London – Capgemini and the Future of Payments

November 20, 2024

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Gareth Wilson, Executive Vice President at Capgemini, shares insights on open and instant payment trends shaping banking

During his keynote session at FinTech LIVE London Global Summit, Gareth Wilson, Executive Vice President at Capgemini, explored the significant changes in the payments industry over the past decade.

A digital-first approach

Reflecting on customer expectations, Gareth emphasises the shift towards a digital-first approach.

"We've all become very comfortable with the kind of digital world,” he says.

This transformation has been propelled by advancements in regulation, such as the implementation of faster payments in the UK since 2008, and the widespread adoption of open banking.

Gareth cites HMRC’s use of open banking APIs for self-assessment payments as an example of innovation driven by regulatory frameworks.

Gareth Wilson, Executive Vice President at Capgemini

In addition to regulation, technological investment has played a critical role. UK banks alone have committed approximately £12bn annually to digital transformation, enabling innovations that bridge the gap between customer demands and evolving technologies.

Fintech competition has further accelerated this shift, fostering collaboration and challenging traditional banking models. Gareth remarks on the significant impact of fintech in driving new propositions for the payments sector.

Instant payments and open finance opportunities

Looking forward, Gareth identifies instant payments, open finance and data utilisation as key drivers for the future of payments.

Highlighting the global proliferation of real-time payments, he points to Capgemini's recent World Payments Report, which found that over 80 markets now operate instant payment systems.

These innovations act as enablers of customer-centric propositions, paving the way for enhanced personalisation and efficiency.

Exploring the promise of open finance, Gareth highlights the potential of expanded access to payments-related data which creates new opportunities. He notes that open finance could bolster account-to-account payment growth, already seeing a 15% annual increase in the UK.

However, he acknowledges existing challenges such as fraud management and the absence of established dispute resolution mechanisms akin to those in card networks.

The convergence of data-rich environments and standardisation initiatives like ISO 2022 further supports this evolution. Gareth underscores the potential of Gen AI and large language models, stating: “ISO not only gives us that standardisation but provides the platform to build on AI-driven innovations.”

Addressing readiness for a transformed future

The conversation shifts to banks’ preparedness for the open and instant future of payments. Gareth notes that while 17% of banks actively develop solutions combining instant payments and open finance, many remain in the planning stages.

The competitive drive from fintechs and national initiatives like India’s UPI and Brazil’s Pix highlight the need for greater integration of new models within the broader financial ecosystem.

Gareth Wilson, Executive Vice President at Capgemini

When questioned about the role of regulatory frameworks, Gareth offers a balanced perspective. While acknowledging compliance challenges, he emphasises the opportunities regulation brings.

"Our mindset has to be how we build on that investment to create value," he states. For example, standardisation through ISO 2022 offers the potential to unlock new efficiencies and customer benefits.

The session concludes with a discussion on global competition, particularly from BRIC countries exploring non-dollar-based instant payment systems. Gareth describes this as both a competitive threat and an opportunity to drive innovation.

He points to Asia's success with QR code-driven payment solutions as a model of how competition can elevate the industry.

Gareth Wilson, Executive Vice President at Capgemini