As much as 15% of North American banks’ payments revenue — $88 billion — is likely to be displaced by the growth of digital payments and competition from non-banks, as payments become more instant, invisible and free, according to a new report from Accenture (NYSE: ACN). Of the $88 billion, approximately $82 billion is attributable to U.S. banks and $6 billion to Canadian banks.
Titled “5 Big Bets in Retail Payments in North America,” the report is based on a revenue-risk analysis model that Accenture developed to measure trends in how consumers pay and projected changes in merchant behavior, technology and regulation. The research is complemented by a survey of payments executives at the 50 largest U.S. and Canadian banks by revenue to determine how they plan to mitigate and capitalize on the disruption in payments to grow customer loyalty, revenues and profitability.
The report found that while payments revenue among North American banks is slowing, it will likely grow at a compound annual rate of 4% over the next half-dozen years — from $322 billion in 2019 to $405 billion in 2025 for retail payments (see Figure 1), and from $505 billion in 2019 to $653 billion in 2025 for retail and commercial payments combined. Only banks that change their business models to adopt the latest technologies and transform the customer experience will capture a share of the nearly $150 billion in incremental revenue growth, according to the report.
“As retail payments facilitation become increasingly commoditized, customer experience is the new driver of brand value and competitiveness,” said Andrew McFarlane, Managing Director – Payments and Global Open Banking, at Accenture in Canada. “With new entrants introducing instant and invisible payment options, combined with pricing compression, banks that are unable to shift to new business models and continually innovate face a future of revenue loss and diminishing relevancy.”
The research confirmed industry awareness of the threats posed by new players in payments. Six in 10 (60%) of the banking executives surveyed believe they will lose up to 15% of payments revenue in the next three years to non-banks, fintechs and other competitors. When asked to identify the primary challenge to their business, nearly two out of five (38%) respondents cited competition from big technology companies, and one-third (34%) cited competition from fintechs. Payments fintechs in North America attracted nearly $11 billion through more than 800 deals between 2016 and 2018 alone, according to the report.
The surveyed executives also acknowledged the challenges brought on by new technologies in payments. Six in 10 (61%) said they believe that payments are becoming free; nearly three-quarters (73%) believe that most payments are already invisible or will become so over the next 12 months; and even more (78%) said that payments are either already instant or will become instant over the next 12 months.
The report notes that the impact of consumer demand for rewards has squeezed payments revenue, with spending in loyalty and rewards by the top five U.S. card issuers jumping from $11 billion in 2010 to $31 billion in 2018. Pressure on traditional revenue models, eroding fees and increased competition will force banks to invest in value-added services to drive economic performance. Bank executives cite next-generation reward schemes and embedded payments capabilities among their priorities for generating new payment revenue, according to the report.
“Payments is North America’s largest fintech segment, and while banks continue to ponder whether fintechs are friends or foes in retail payments, in most cases the answer is both,” McFarlane said. “Banks need to determine which fintechs they want to beat, buy or join. Banks that don’t collaborate with fintechs will likely fall behind in customer experience, innovation and agility.”
Hampered by legacy systems, bank executives understand that implementing digital technologies will be essential to support innovation and efficiency. One-quarter (24%) of respondents cited artificial intelligence, robotics, machine learning and innovative payments hubs as the key platform technology capabilities they need to adapt their core systems in order to shift to high-speed and continuous payment flows.
CannaTech, the Canadian Securities Exchange & OTC Markets to Convene Cannabis Industry Leaders at the First-Ever Dedicated Cannabis House in Davos
The world’s top cannabis industry leaders will convene in the first-ever dedicated Cannabis House in Davos, Switzerland, January 20-24, 2020.
The Davos Cannabis House is hosted by CannaTech the world’s premier international cannabis summit platform, in partnership with the Canadian Securities Exchange (CSE) and the U.S. based OTC Market Group.
The theme of this year’s World Economic Forum is Stakeholders for a Cohesive and Sustainable World. The Davos Cannabis Lounge will highlight the economic role of cannabis in the future of healthcare, international trade and investment, and environmental and resource security, to create a cohesive and sustainable cannabis industry for all.
Curated for C-level executives and investors the Cannabis House will have a rich and varied program with some of the world’s foremost cannabis-related business leaders analyzing the current challenges and economic future of the hemp and cannabis industries.
Situated alongside world-leading industry and government pavilions, the Cannabis House will host numerous networking opportunities for the Davos community.
“A serious discussion of cannabis and its impact could not be timelier, and Davos is the ideal context given this year’s Sustainability theme. Partnering with the Canadian Securities Exchange and OTC Markets to host the first dedicated Davos Cannabis Lounge gives us the ability to amplify the cannabis and hemp messages and reach attendees. This year at CannaTech events from Latin America to South Africa, I witnessed the growing global industry and intense consumer interest in the hemp and cannabis markets. Today, cannabis is poised to revolutionize everything from health care to the ways people partake in leisure activities. On the global level, the threat of climate change has opened peoples’ eyes to hemp as a sustainable plant with construction, industry, and medicine. These recent developments are creating new international ecosystems that will impact everyone from farm workers in Africa to the CEOs of the world’s largest corporations. It’s time for the delegates at Davos to take part in and impact the economic development,” said Saul Kaye, founder and CEO of CannaTech and iCAN: Israel-Cannabis.
Zenabis Global Inc. Announces Transition of Chief Executive Officer with Appointment of Kevin Coft
Zenabis Global Inc. (TSX: ZENA) (“Zenabis” or the “Company“) announced today the appointment of Kevin Coft as interim Chief Executive Officer (“CEO“), effective immediately. Mr. Coft will replace Andrew Grieve as CEO, whose contract was set to expire shortly. While Mr. Grieve will be returning to his investment business, he has agreed to continue to provide Zenabis with his knowledge, expertise and guidance as a continuing member of Zenabis’ board.
Announcing the transition of responsibilities, Monty Sikka, Chairman of the Board of Directors of Zenabis, said, “The Board thanks Kevin for taking on the role of Chief Executive Officer on an interim basis. We look forward to working with him as we complete the final phase of our operational ramp-up into early 2020, and as we further consolidate our position as a leading Canadian cannabis licensed producer. Kevin has a track record as a leader in the cannabis industry, with experience as CEO in a previous iteration of the Zenabis business. We will take full advantage of his knowledge of the company and industry, as well as his steady leadership as we continue to mature as a business. In this phase of our growth, we look forward to Kevin’s leadership as we continue our search for a permanent, CPG (consumer packaged goods) and operations-focused CEO.”
The Zenabis Board has engaged Korn Ferry to assist with the hiring of a permanent CEO and expects to have a permanent CEO in place in the first quarter of 2020.
Mr. Coft was one of Zenabis’ founding members, having previously acted as CEO when it was a part of the Sun Pharm group, and before the amalgamation with Bevo Agro that created Zenabis Global Inc. In that role, he was responsible for Zenabis achieving ACMPR compliance as a Canadian cannabis licensed producer.
Mr. Coft is an operational and supply chain professional with over 30 years of international procurement, facility operations, and managerial experience. His industrial expertise covers a wide range of functions including regulatory licensing, construction, strategy, operations, logistics, warehousing, customer relationship management, and business systems. Most recently, Mr. Coft was responsible for the construction build-out of Zenabis’ facilities across Canada, as Chief Facilities Officer, including one of Canada’s largest indoor cannabis cultivation facilities, located in Atholville, New Brunswick. Previously, he held senior roles at IHL Group and Buy-Low Foods.
“Zenabis developed rapidly since its public listing, with a variety of capital raisings, large-scale construction, and most importantly, increasingly large harvests of high-quality cannabis,” said Mr. Coft. “Zenabis has come a long way in a short period of time, and I am excited about leading the team on an interim basis as we enter the next chapter of our development and seek to establish Zenabis as a cashflow positive, operationally efficient leader in the industry.”
“I am incredibly proud of the construction, licensing, and cultivation achievements of the Zenabis team during my tenure,” said Mr. Grieve. “From just over 5,000 kg of licensed cultivation capacity in January of 2019, to 57,000 kg at this time, with another 39,400 kg submitted for licensing and an incremental 14,800 kg having recently achieved substantial completion, the pace of growth has been exceptional. Kevin, leading our construction team as the Chief Facilities Officer, was instrumental in achieving that pace. I look forward to continue to serve Zenabis on the board of directors, and to continue working with the team.”
Mr. Sikka concluded, “Andrew played a pivotal role in our history. The Board thanks him for his hard work and execution of so many of our business deliverables. We now look forward continuing to deliver stakeholder value under Kevin’s leadership.”
SOURCE Zenabis Global Inc.
Chase Cooper Wins Category Award in Chartis RiskTech100®
Chase Cooper has been named award winner for the Operational Risk category in the 2020 Chartis RiskTech100® rankings.
“We are delighted to have won this award,” said John Kiddy, CEO at Chase Cooper. “It is a testament to the investments we have made in aCCelerate GRC and we are particularly pleased that Chartis have focused this year on the quantification of Operational Risk exposure. Chase Cooper’s key differentiator in the GRC marketplace is that it combines best in class qualitative and quantitative functionality to provide a complete enterprise class EGRC solution – no other EGRC player has this unique combination.”
“Quantification is an increasingly important area of innovation,” said Rob Stubbs, Head of Research at Chartis Research. “Chase Cooper’s achievements in the area of operational risk quantification were instrumental in our decision to present it with this new RiskTech100® award.”
SOURCE Chase Cooper
Latest News5 months ago
Galaxy Digital Announces Approval of License to Underwrite Registered Public Offerings of Securities
8 months ago
The Green Organic Dutchman Receives Global Awards for New Website
Fintech8 months ago
Ally Financial Partners with Better.com to Create End-to-End Digital Mortgage Experience
Latest News6 months ago
Chinsay’s Intelligent Contract Platform Enables Rio Tinto & Cargill to Complete the First Fully Digitalised Iron Ore Trade
Fintech4 months ago
Experian A/NZ acquires Australian fintech Look Who’s Charging to bolster open data offering
Fintech5 months ago
PremFina Makes Final Shortlist for Hottest FinTech Startup in Europe in The Europas Awards
Latest News5 months ago
Core Scientific launches the first AIRI-Ready Datacenter
Fintech4 months ago
Apex Clearing Releases ‘Millennial 100’ Stock Pulse Report