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Banking Sector Fights Back Against Fintech Rivals

Citigroup’s announcement this week of plans to develop its own consumer-payments platform is the latest indication of a fightback by the banking establishment against fintech rivals that threaten its most lucrative markets.

 

Established banking institutions are fighting back against the fintech companies that are revolutionizing the sector and laying siege to its customer base.

Citigroup announced on Tuesday its plans to development its own consumer-payments platform that would allow payments from many of the world’s most popular digital wallets.

Citigroup’s announcement comes two weeks after the partnership between Barclaycard and Ant Financial was formed, which threatens to open up UK spenders to the digital payment app AliPay, used by 800 million Chinese; nine days after Fidelity’s $35 billion acquisition of WorldPay, which analysts say is a means to “play the structural growth in digital payments”; and six days after HSBC spoke publicly for the first time about its digital-only banking offshoot known as Project Iceberg.

With digital banks like Revolut and Monzo grabbing headlines, money transfer specialists like TransferWise shaving 80 percent off the cost of overseas payments, and with any number of payment apps and e-wallets emerging or expanding their current reach, banks and merchants risk falling a long way behind unless they embrace digital payments and technology.

In Citigroup’s case, it says it wants to “extend our leadership beyond the B2B payment space by developing capabilities to enable institutions to collect from consumers in a globally consistent and seamless fashion.”

What Citi won’t be doing is seeking to develop its own cryptocurrency, in step with J.P. Morgan. Per its global head of innovation for treasury and trade solutions, Gulru Atak, “Citicoin” is no longer on the agenda, and the bank now believes there are better, non-crypto ways of improving payments. “Leveraging the [current] payments ecosystem,” which includes SWIFT, the vast messaging network to which 11,000 institutions have been onboarded, is simply less of a challenge than attempting to move all of those banks over to a new blockchain-enabled system, Atak said.

 

Further Reading

 

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Updated: 20 Apr, 2019

WorldFirst World Account – BER Review

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Updated: 23 Apr, 2019

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TransferWise is now officially offering PayNow as a funding option for users in Singapore, the company has announced.

Updated: 29 Mar, 2019

Revolut Steps Up Brexit Preparations

Revolut CEO Nikolay Storonsky

Fintech hotshot Revolut has written to millions of its customers to warn that new verification documents will be needed in the event of a no-deal Brexit; it has also called on the UK government to get serious about post-Brexit tech visas.

Updated: 25 Mar, 2019

TransferWise Borderless Account – BER Review

TransferWise’s Borderless Account allows users to hold and convert funds in 40 different currencies and send and spend internationally, all at the “real” exchange rate and with exceptionally low service fees. Users can also receive major-currency payments free of charge.

Updated: 23 Apr, 2019

  

Tags: Currency-News , , ,

 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
   

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