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European collaboration between countries with different wishes, cultural habits and ambitions

European collaboration between countries with different wishes, cultural habits and ambitions

Edward van Dooren

Strategic advisor

19 June 2019

European collaboration between countries with different wishes, cultural habits and ambitions


In almost every conference room in the Stockholmsmassan - the venue where EBAday takes place - I hear the appeal for collaboration between European banks that I wrote about yesterday. For me, this is an important sign that more and more financial experts understand the importance of cooperation and actually want to take the first big steps in the right direction. It feels like pan-European payment solutions can actually become a reality.

If we want to stay ahead of the unstoppable innovation drive of BigTechs, European cooperation must become reality in the short term. This became very clear during the session 'Technology supporting payment advancements'. In a poll, a majority (56 percent) of the respondents gave a resounding 'yes' to the question of whether GAAFA (Google, Apple, Amazon, Facebook, Alibaba) will have taken a large share of banks' business in payment services by 2025. So, it is clear to me we need to speed up the process of European collaboration. This might require a new way of thinking for banks because so far, they mainly focus on their national markets. The question is whether banks can change their mindset and look beyond their own borders.

Infrastructure is in place

The call for European cooperation in the world of payments is not completely new. The ECB and the EU have been working on this for years by creating an infrastructure that contributes to a healthy and regulated basis for innovative pan-European payment services. There was a solid foundation due to the arrival of the Euro in 2002. After that, actions and legislations were introduced such as TARGET, SEPA and PSD2 and TIPS. We can therefore state that the basis and infrastructure to foster European cooperation is already in place.

During the session it became once again clear to me that we should learn from each other’s use cases and not invent the same wheel over and over again. A good example is Swish, a mobile payment system in Sweden that was launched in 2012 by six large Swedish banks and now has more than 6.5 million users. Swish CEO Anna-Lena Wretman explained today that the new payment solutions experienced difficulties in the first years, because the network needed to grow. Wretman explains: "But now Swish is largely embraced in Sweden." Charlotta Wark, Vice President and Head of Banking Sweden of CGI agrees on this as she nowadays regularly hears 'mom, can you swish me' instead of 'mom, can you send me money'.

Wretman: "The payment landscape is changing rapidly. The Swedish banks came together and created a new solution. We have the assets, so we started working together. This collaboration is the most important success factor: banks did it together. Yesterday we were competitors and now we are partners who make great use of their customer base."

The adoption rate of new solutions

Frantz Teissèdre, Head of Interbank Relationships at Société Générale, acknowledged that France is not quite as far developed as Sweden yet. The adoption rate of new solutions is also lower there, and more people still pay via cash and checks. It is a cultural difference that is not only applicable to Sweden and France, but to the whole of Europe. Every European country has its own wishes, habits and ambition. The Nordics and the UK, for example, are at the forefront of the adoption of new payment technologies. They are on the way to become a cashless society, while in countries such as Germany and Spain cash is still one of the most important means of payment.

In my view, overcoming cultural differences in Europe is essential if we want to work together successfully and come up with new pan-European payment solutions. In addition, the mindset of many banks is now focused on the domestic market. On the one hand, this has advantages because the payment solutions of BigTechs are based on a worldwide one-size-fits-all-approach, which means that they cannot offer the customized solutions per community that banks can offer. On the other hand, it is difficult to integrate local solutions into a pan-European payment scheme.

I am curious to see whether we can find a solution for these hurdles. Fortunately, one thing that is clear to me: European banks are indeed willing to work on solutions that exceed their own and local borders.