TREND 1 TREND 2 TREND 3 TREND 4 TREND 5 GEN Z RISING UX IS THE NEW GOLD MOBILE HIT ITS GROOVE REWARDS REVOLUTION THE NETWORK EFFECT TREND 6 TREND 7 TREND 8 TREND 9 TREND 10 FINTECH AND BANK FUSION AN ARMS RACE IN CODE PAYMENTS EVERYWHERE FRAUDSTERS INNOVATE TOO RIP AND REPLACE REQUIRED TREND 6 FINTECH AND BANK FUSION Payments innovation could lose its brilliance without fintechs and banks partnering. Collaboration will make the payments fintech landscape unrecognizable in a decade. Fintech companies are more willing to work with traditional providers. Banks are starting to think and innovate like fintechs. This new marriage of opposites—fin and tech together—is a powerful mutual dependency. A symbiosis of very different organizations with complementary strengths. There is no doubt that fintech companies have transformed financial services, from the mortgage industry to payments. They have disrupted traditional markets by combining bold new business models and cutting-edge technologies. Some have soared. Others have fallen. PayPal thrives. But in the boom-and-bust cycle of fintech in payments, few likely remember the now defunct Beenz and Flooz. The reality of this here-today-gone-tomorrow dynamic points to an Achilles heel that some fintech companies will never overcome. Many lack the infrastructure, industry knowledge, brand reputation and customer base to scale. Traditional players have these things in spades. But they are not the leaders in disruptive digital technologies. What’s more, their organizational structures and risk tolerance do not naturally enable agile innovation. This is why fintechs and banks are better together than they are alone. Investors are starting to think so too. Our analysis reveals that in North America, collaborative fintech investment as a percent of total investment (37 percent) is higher than it is in the rest of the world (18 percent). Banks are in build, buy and partner mode themselves. Non-bank payments providers like card companies are partnering with fintechs as well. A scan of the headlines reveals how prevalent fintech and bank partnerships and strategic investments are in payments. In fact, partners are fast becoming the new disruptors. Chase Pay has turned to scanner company LevelUp to expand its footprint in quick-service restaurants. Working together, Bank of America and PayPal are making it possible for the bank’s customers to link their cards into PayPal to pay in store. TD Bank and Moven came together to bring Moven’s money management app to customers in the United States. The list goes on. Best-of-both-worlds partnerships like these will power the future of payments transformation. Copyright © 2017 Accenture. All rights reserved. DRIVING THE FUTURE OF PAYMENTS 10 MEGA TRENDS | 9