Digitization and the benefits of modern technology were central themes during the afternoon sessions at EBAday in Lisbon, Portugal.
In the first digitization panel, Olivier Denecker, an expert partner at McKinsey & Company, moderated a discussion on emerging trends in payments technology. Panelists included Erik Alstromer from Form3, Martin Bentele from Accenture, and Krister Billing from SEB. Alstromer highlighted the current challenges payment service providers (PSPs) face, balancing the management of existing infrastructure with the need to adopt new technologies.
He noted, "Clients are excited about new innovations, but they also have to deal with outdated infrastructure. There’s significant pressure on clients to innovate, prevent data breaches, combat fraud, and maintain 24/7 cloud-based solutions for scalability—often leaving them with little time or resources. A lot of clients are spending 80% of their time and budget just to keep essential operations running."
An audience poll revealed that 44% viewed "open and instant payments" as the most impactful trend in the payments industry, followed by generative AI at 19%. Billing emphasized that regulatory compliance drives much of the industry’s agenda, stating, "To comply with regulations, we must deploy both existing and new technologies." Bentele concurred, expressing concern over banks’ struggles to modernize their systems while contending with regulatory demands.
A follow-up poll indicated that 57% of participants identified regulatory changes as the primary driver of technological transformation in their organizations, with efficiency and operational improvement trailing behind at 17%. The panel stressed the importance of partnerships, noting that collaboration within the industry is essential as banks cannot tackle these challenges alone.
Is Embedded Finance Key to Digitization?
In another panel dedicated to successful digitization, Adam Davis from Bain & Company led a discussion with Carlo Panella from Be Shaping The Future, Simone Satan from BNY, and Paul Thomalla from Unifits. Davis introduced the concept of open banking, which integrates bank and third-party data and services, and how embedded finance disrupts traditional banking models.
Satan remarked on the necessity of digitization for banks, pointing out that companies must focus on seamless digital customer journeys while also managing talent effectively. As organizations shift towards agile, platform-driven approaches, the potential of open banking remains largely untapped. However, banks continue to contend with legacy systems and significant investments in compliance, often at the expense of innovation.
A poll assessing long-term impacts of open banking versus embedded finance found that 46% of respondents believed both would have equal importance, while 31% favored embedded finance and 17% preferred open banking. Thomalla referenced Maslow’s hierarchy of needs to illustrate the sequential nature of digital transformation, emphasizing that without a strong foundation in open payments, higher levels of open banking and finance cannot be achieved.
The panel also raised concerns regarding privacy as industry collaborations expand. Panella outlined three key hurdles to successful open banking and embedded finance initiatives: regulatory challenges, customer adoption, and fostering innovative mindsets within financial institutions.
A subsequent poll gauged the effectiveness of bank/fintech partnerships, revealing that 57% of respondents felt their collaborations fell short of expectations.
The Role of Cloud in Digital Transformation
Nils Jung from Capgemini Invent moderated a discussion on cloud-based managed services with panelists Daragh Kirby from Intercope, Nadish Lad from Volante Technologies, and Michèle Zaquine from HSBC. The panel acknowledged the rapid evolution over the past few years towards flexible cloud models, such as subscription and pay-as-you-go services.
The panel emphasized that reducing time to market is one of the main advantages offered by cloud technology. Kirby noted, “Clients are eager to offload maintenance responsibilities," and Zaquine added, “This isn’t just an IT issue—it’s a bank-wide topic that requires a clear strategy.”
Lad observed that different tiers of banks are adopting cloud services in varying ways, with Tier 1 banks leaning towards private cloud solutions and smaller banks favoring public cloud options. The discussion highlighted a trend where banks tend to outsource commoditized services to the cloud while retaining expertise and differentiators in-house.
As the session concluded, the panelists speculated on the future of cloud, with Kirby mentioning commoditization, Lad discussing cross-border payment solutions, and Zaquine highlighting the need for disciplined cloud management.