Mobile banking and instant payments have been the hot topics at Sibos, with their commercial viability becoming increasingly evident to banks.

From out of the mists of regulation and cost cutting, a new banking model is emerging. For the first time in years, regulation and compliance have not dominated the discussions at Sibos.

In Singapore sessions on blockchain have been standing room only. But perhaps even more significantly (opinions on the relevance of blockchain are highly skewed) new business opportunities are being perceived in a world of faster and hidden payments and mobile technology.

With mobile phones on sale in some emerging markets for as little as $15, banks are starting to realise that serving the financially excluded could make commercial as well as charitable sense. Mobile banking can be offered at such low cost that even low-income immigrant workers become viable customers. Credit scoring algorithms are being developed for this target group based on mobile phone top-ups and social media information.

Another development is faster/instant payments, with new schemes proposed in various countries including the US. On the retail side, the service will likely be given away for free but there is upside on overlay services such as peer-to-peer transactions – providing the banks can get there before the fintech players.

On the corporate side, faster payments and mobile services can be charged for along with business advice based on the transactions data that banks have. The aim should be to fill the revenue gap that the loss of flow and interest rate earnings has created.

This is all a work in progress but at least the direction of travel is sufficiently clear for the basic dimensions of a new business model to take shape.

Brian Caplen is the editor of The Banker.

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