Financial Crime
January 13, 2025
Established in 2006, Projective Group is a leading Financial Services change specialist with expertise across dedicated divisions in data, payments, risk and compliance, transformation, and talent. Their Payments Practice specialises in the latest developments in the banking payments sector, working to address the big issues and helping banks become as future-proof as possible to not only survive but thrive.
Projective Group partners with its clients in building their market infrastructure, helping to introduce payment innovations, and offering them specialist education, core banking, and corporate payment advice. Projective Group’s involvement across several banking change programmes has also led to deep expertise in specific solution areas, such as DORA, ESG, and maturity assessments for leading financial institutions.
Earlier in the year, Jacob Rider (Projective Group) authored an article considering the findings of the 2023 UK independent review into the Future of Payments. This review, launched by the Chancellor of the Exchequer, also considered plans for new legislation to allow for reform and innovation within the sector. You can read his full article here. Jacob addressed how banks can maintain their competitive edge yet also remain compliant. We are in the year’s final quarter; we wanted to revisit his key points and consider whether the landscape has changed.
Many customers still probably do not consider how many different payment transactions they complete and payment systems they use daily. Tap with a phone to pay for groceries, use a physical card to pay for goods, complete an online contactless purchase or receive salary paid into a bank account; all these use different systems.
Set against a backdrop of falling cash transactions and rising open Banking and API-based capabilities, this is both an exciting and challenging time for financial institutions. The biggest question remains unsolved: how can banks keep their customers happy while juggling the ever more onerous demands of in-person, online and person-to-person transactions? It is also important to note that for banks to truly be able to innovate their consumer payments experience, they need to be guided by outcome-based regulations rather than detailed (and limiting) requirements.
Just what does it take for a bank to remain compliant and meet its regulatory obligations while still managing to change and innovate? In the UK, there is the additional responsibility of working with the dedicated Payment Systems Regulator (PSR) set up to ensure that as payment systems evolve, they work well for everyone.
Being ever-ready to embrace change and improve the customer experience is key to future success and longevity in the financial services sector. We think the landscape remains the same, where a bank’s key objective should be to align and prioritise regulatory initiatives with clear and agreed-upon outcomes. To stay ahead of the curve, firms need to adopt a pragmatic but agile approach to ensure they can adapt and thrive in the face of uncertainty and change.
The development of the alternative payment journey offered by open banking is huge. The payment process in the UK can be painful, involving entering account numbers and sort codes for each transaction. Perhaps there is much to learn from countries like Sweden, where the process is streamlined and much faster.
The UK is already acknowledged as a market leader in open banking development, but issues must be resolved before its full potential can be realised. What main obstacles prevent progress, and how can they be overcome?
No one is immune from fraud, and cases are rising. Banks carry a responsibility to reimburse customers who have been victims of fraud. What practical steps can be taken to tackle and reduce fraud and scams? Is there a collective approach that could benefit both banks and their customers? What should the main objective of any new initiative be?
The use of digital wallets is enjoying a growth spurt. Front-end payment services like Apple Pay and Google Pay were early adopters, but the scope of these transactions is expanding rapidly. Customer satisfaction when using the wallets appears high, and it is important to respond to consumer preferences as their choice of payment option evolves.
Another area to consider is re-platforming. Whilst the outcomes of moving systems and creating new environments are undeniably positive (improving performance, security, scalability, and reducing costs), Projective Group has seen through first-hand experience relocating core banking architecture with many clients that the extent of this change and the process required should not be underestimated.
Regardless of the specific applications, it is even clearer now that Open Banking is already fostering innovation, boosting consumer protection, increasing the scope for investment, and contributing to a competitive Payments ecosystem in the UK.
The Payments Association
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27 Clements Lane
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© Copyright 2024 The Payments Association. All Rights Reserved. The Payments Association is the trading name of Emerging Payments Ventures Limited.
Emerging Ventures Limited t/a The Payments Association; Registered in England and Wales, Company Number 06672728; VAT no. 938829859; Registered office address St. Clement’s House, 27 Clements Lane, London, England, EC4N 7AE.
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