Deltec Bank perspective – Disruptive Innovations in Payment

Deltec Bank perspective - Disruptive Innovations in Payment

“Deltec Bank, Bahamas”
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

Two of the most important ways the payment industry is using disruptive innovation in their services is by keeping it simple and connecting globally, say the experts.

Many traditional financial institutes including the legacy banks and large financial players are looking to the future and a world without cash.

Products and services are developing using new disruptive technologies creating new innovations in finance, for example, digital wallets and tokenization. These new methods of providing services to customers hugely increase the security of digital payments.

Companies such as Visa are already adopting these new disruptive technologies and are looking to move forward into the future by offering customers more flexibility and more security within their payment processes.

What Is Disruptive Innovation?

Disruptive Innovation is a term formulated by Clayton Christensen. He describes disruptive innovation as a “process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors“.

According to Clayton, disruptive innovation is not a breakthrough innovation that immediately makes a product much better. Instead, disruptive innovation transforms a product that was historically expensive, complicated and inaccessible to one that is affordable, uncomplicated and available to a much larger population.

“Disruptive innovation transforms a product that was historically expensive, complicated and inaccessible to one that is affordable, uncomplicated and available to a much larger population.”

Payments are already moving away from cash as consumers are ever-increasingly, purchasing online and via mobile channels. A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines the disruptive forces that are shifting the payments landscape.

With the advancement of these new disruptive technologies, businesses will need to adapt to ensure they remain relevant in the digital age. According to a report by MarketsandMarkets, the global digital payments market is set to be worth $86.76bn by 2023, an increase from $38bn in 2018.

This clearly demonstrates that the payments industry is experiencing significant transformation, due to many criteria, including changing consumer behavior.

Payment firms such as Stripe, Adyen and PayTM are disrupting banks, credit card companies and payment processors. Still using out of date infrastructure, these more traditional banks are attempting to remain relevant by expanding into other markets, including point of sale and peer-to-peer services.

Tech giants like Apple, Google, and Samsung all now provide cash and card-less payment solutions for consumers, along with many retail chains are already using their platforms. The sophistication that Big Tech brings poses a unique competitive threat to traditional legacy financial services providers.

“Payment firms such as Stripe, Adyen and PayTM are disrupting banks, credit card companies and payment processors.”

The fintech revolution is changing the way banks and payments companies have won and continue to retain their customers. Traditionally, one institution would serve the entire financial needs of its customers. In the near future, businesses and consumers will interact with multiple companies in a more decentralized and technology-driven system.

Disclaimer:  The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.

About Deltec Bank

Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.

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Phone: 242 302 4100
Country: Bahamas
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