Hello everybody, welcome to C&F Talks and the latest in our series of talks is with Dan Moore, who's Head of Strategy, Analysis and Engagement at the Payment Systems Regulator. Dan's going to be joining us to speak at the Payments Regulation and Innovation Summit, which is being held in London on the 21st of January. Dan, welcome.

Thank you very much, it's great to be here.

Very good to have you with us.

Dan, you're joining the panel discussion at the Summit on key challenges and opportunities in the future payments landscape. And I know that some of the topics which have been suggested for that discussion include APP scams, automation technology, account to account payments and streamlining payments orchestration. Which of these do you think is going to have the most impact on the industry?

So, I think there's a huge range of significant opportunities in UK payments over the next year. So, there's both a significant range of technological and market developments, but also following the National Payments Vision, I think there is a big opportunity for us to be able to tackle some of the significant challenges that we faced in payments.

When I think about the opportunities, I think there are significant opportunities when it comes to Open Banking, to really driving forward Open Banking and getting some of the real benefits that could be provided to customers. I think there are really significant opportunities to get the infrastructure that we need to make payments into the future work even more effectively supporting resilience, competition and innovation. And I think there are opportunities to better protect customers, make the process simpler and easier.

I do think there is a challenge. There will be a real challenge for the industry around fraud. We have taken significant action in relation to authorised push payment fraud, but fraudsters are sophisticated. They do move to where they can exploit markets to use a phrase, opportunity. And we think that vigilance in relation to fraud will continue to be a really, really significant issue and addressing fraud as a whole system, not just the payment system, will be an important part of that.

Yeah, yeah, no doubt.

I mean, you sit in a unique position as a regulatory body for the payments industry. And I suppose that there are quite a few challenges being in that position that perhaps you can share with us. But also, I suppose, you've also got the objective, the secondary objective now of enhancing competition in the industry. And how does that work, getting the right balance between that and protection of consumers?

So, I would say, first of all, just as a quick point, I mean, our objective on competition is very much at the heart of everything that we do. And so, I think there are some real challenges in this particular sector of being a regulator. So, I think this is quite a fragmented industry.

So, trying to obtain consensus to move things forward, I think is something of a challenge. The ability to coordinate between regulators is something we work really, really closely on. But I'm really clear that, following the National Payments Vision, there is more to do in that particular area.

But absolutely, on this sort of sometimes there's a tension between effectively advancing competition, providing the sort of opportunities for growing businesses and consumer protection. In my view, in payments, I don't think there's much of a tension. So, I think by customers, by companies delivering competitive products which protect customers, there is a real opportunity for them to grow and develop their particular businesses.

So, from our perspective, we want to see well-protected, well-informed customers able to exercise a range of choice. And by doing so, that will drive effective competition and even greater innovation in the sector. So, we see them very much as fitting together.

Yeah, being mutually complementary.

Absolutely.

Maurice

When you look forward over the next, I suppose, let's say five years, how do you see Open
Banking progressing over that period? When we're looking back in 2030, what sort of developments do you think we will have seen, and what sort of challenges perhaps that will need to be overcome over that period?

Look, I think that's a really big issue. And I think making progress with Open Banking, account-to-account payments has so many potential benefits in terms of competition, serving customers and innovation.

And innovation is a really significant issue for the Payment Systems Regulator. It's one of our statutory objectives, but it's much more than that. It's the heart of what we do and it's something we'll be pressing more on following our strategy review.

But turning to Open Banking specifically, so the National Payments Vision, I think, sets out a really positive vision both for Open Banking and for Open Finance into the future. I think it clarifies regulatory responsibilities in extremely helpful ways so that everybody's clear within the system who should be doing what and can be held accountable for doing that. So that's a bit of the architecture.

But in terms of what I'd like to see, I would like to see the work on variable recurring payments deliver real opportunities for customers to be able to use that at scale. Those products provide significant benefits in terms of potential control, but also in paving the way for further competition. So I'd like to see a commercial model which really does encourage that rollout. And I think that's a really important area.

But five years down the track, and I'm looking at other markets which have seen significant growth in account-to-account options, I would like to see Open Banking options taken advantage of at scale within broader e-commerce. And that is absolutely a really important area for the FCA in particular to lead on.

But I'd like to see those sort of Open Bank use cases for e-commerce being something which customers use, customers trust, and is exercising greater competition to cards and providing customers with real benefits.

I think there is a really significant opportunity. The UK led on a huge amount of Open Banking. We now have the opportunity, if we really move these things forward, to be able to trailblaze further for Open Banking, really getting those competition and choice benefits. But to do so, we absolutely need to have products which deliver functionality, products which enable customers to be effectively protected, and commercial models which incentivise innovators to deliver products and to expand them at scale.

Yeah. Well, that's a very interesting forecast for the next five years. Let's hope all of those things come true.

So, for our viewers, if you'd like to hear further discussion about the future of Payments and Regulation and Innovation, it's not too late to book your place at this conference, which is being held in London on 21st of January. Please do visit our website, www.cityandfinancial.com.

It only remains for me to say, Dan, thank you very much for sharing those thoughts.

It's a very great pleasure, and I look forward to seeing you all at the conference.