Standard Chartered: Building the digital growth engine of the bank 27 September 2021

Jayant Bhatia, Chief product officer, Group retail products – payments, discusses how Standard Chartered is balancing all the necessary payments concerns while continuing to innovate.
What are your customers’ priorities in terms of payments improvements?

Following are the critical pillars that are driving innovation today in the payments space: a frictionless payment experience, speed of payment, fees, and security.

With the amount of choices available to customers for every decision they take, they are looking for a frictionless payment experience so that they don’t need to think about something as simple as
making a payment. The time customers spend on smartphones has been steadily increasing and that has led to mobile payment journeys being an imperative for transaction initiation.

Speed of payment is quite evolved for card payments, but it is lagging for local payments and international remittances. Speed of local payments are increasingly getting solved through local payment infrastructure being created by regulators and it is imperative for incumbents and new players to bring this experience to their customers. With the improvements in local payment infrastructure, international remittances also need to move to faster settlements.

Fees associated with international remittance have always been a traditional pain point and with new remittance models being introduced, this should be improved by not only reducing the fee but also improving transparency.

Security is always an important element of payments. The key aspect here is that security measures are designed to leverage available information with customer inputs being needed only for risky cases thus striking the delicate balance between security and experience.

To what extent are fintechs, retailers, or telcos becoming key payment players your country?

Fintechs have been successful in taking a specific payment or part of the payment journey and adding value to it where traditional players are facing challenges due to the legacy systems in place. Transferwise and NIUM have been able to revolutionize the international remittance space. There are super apps like Grab in South East Asia, PayTM, PhonePe etc. in India which are enabling person-to-person payments and person-to-merchant (online and offline) payments.

Players like Singtel are using the Dash wallet ecosystem that supports both closed loop and open loop with cards. Even big techs like Google, with the launch of Google Pay, are participating in the local payments space and in markets like India have over 75 million users.

Wallets like ApplePay have taken off in markets which are big on contactless payment acceptance like Hong Kong and Singapore.

What are some of the latest achievements in terms of your payments capabilities?

Payments is an evolving space and we have been part of many emerging payment innovations. We have launched a mobile first international remittance solution for our clients in Hong Kong, Singapore, UAE, and African markets. The typical challenges that a client faces  in  doing international remittance are high fees, lack of clarity on the amount received by recipient, time taken for transfers, and inability to track payment status which is running through a maze of correspondent banks. We have partnered with fintechs to offer an instant or near instant transfer for major remittance corridors with clear fees and charges. Clients initiate a transfer knowing what the recipient would get and are able to track the status easily. This all comes with a revamped user experience.

We have continued our participation the wallet ecosystem. We recently launched the new journey on GPay in Singapore and we were one of the first three participating banks in the market on the revamped journeys. This follows the model from India where the revamped GPay journey was first launched and we will continue to look at opportunities to bring this experience to our clients. We were among the first in market to integrate with ApplePay and SamsungPay as well and we continue to work together with them when they expand to a new market with our presence.

We have invested in ramping up the security infrastructure by enabling tokenization on SCB credit and debit cards. It helps reduce fraud risk and improves the customer experience when using SCB cards. We have also built 3DS 2.0 protocol, which is the latest protocol release by EMVCo for authenticating ecom transactions. The new protocol allows merchants to pass additional information to the bank which allows them to authenticate the transaction which in turn opens up the possibility to allow frictionless approval of ecom transactions.

Additionally, we continue to participate in local payment, network-based capabilities involving FPS in Hong Kong, PayNow in Singapore, RPP in Malaysia, UPI in India amongst others.
We have enabled contactless credit and debit cards in 14 markets within our global footprint. We were the first in Hong Kong to enable cardless cash withdrawal on ATMs.

There is a lot of competition in the payments space, with people competing for a slice of the payments pie. What drives this competition? And where does the value come from in terms of payments (transactional data, services, data, others)? Is your institution working on payments data monetization?

Payments data is one of the richest forms of data as it gives a day to day read on customer purchase and payment behavior. Today, customers expect solutions tailored to their needs instead of one-size- fits-all services and offers. The data available in the payments space can be what kind of payment
is being completed, when, where, and to whom it is being made which gives insights into customer behavior and helps build solutions and offers based on these inputs. This can create the wow factor for customers. We get insights on the channel through which a customer is doing the transaction, which allows us to offer a more accurate next best product. There is a huge potential for players to leverage account / debit card transaction data to lend to new segments. SCB is enhancing its data infrastructure as well as digital platforms to get a read on these events and triggers to enable real time choices being offered to a customer based on their actions.

How do you see payments evolving over the next 10 years?

Digital payments will continue to increase as they displace cash. This will be fuelled by innovation, increasing smartphone adoption, acceptance of accounts as funding sources, as well as regulatory infrastructure being enabled. Payments will become more and more invisible and frictionless and we will continue to see evolution on security measures to make it more efficient while operating in background. Card on file and tokenization has created a base on which contactless payments like mobile payments, wearable payments, and voice-based payments will see significant growth in the
next decade. Customers expect international remittance to happen at a pace at which local transfers are being processed. SCB is monitoring all the emerging trends in this space as we continue to innovate to bring the best payments experience to our clients. Additionally, there are 3 interesting areas which can potentially see a lot of innovation:

Open banking & partnerships: With banks and fintech players increasingly using open data, opportunities will emerge across client solutions and will lead to innovations in the payment space as well. There will be increasing use cases where banks and fintechs collaborate with each other especially in the partnership space leveraging the payment information available to create specific offerings for customers.

Cryptocurrency: We have recently seen payment networks like Mastercard & Visa accepting payments in crypto on their network. We will continue to see crypto use cases coming in which will enable crypto as another mode of payments.

Big Tech: We will see Big Techs exploring payment ecosystems and solutions. Facebook is already exploring this with its wallet solution Novi to enable payments and we will see more involvement from Big Techs to usher in a new set of innovations in the payments space.

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