1. Australia’s rapidly-evolving payments
landscape may throw up a host of security
and investment challenges as financial
service organisations try to keep pace with
technological advancements.
FST Media and Juniper Networks hosted
an exclusive luncheon in Sydney with
senior executives of leading financial
services organisations to discuss the
environment for innovation in the
payments industry in the coming years.
The promise of NPP
With Australia’s New Payments Platform
(NPP), an industry-driven initiative to
create a fast, data-rich, low-value
payments infrastructure now underway,
executives highlighted the need for an
architectural approach to have a cohesive,
multilateral framework.
According to Mangala Martinus,
Managing Director, Payments Consulting
Network, Australian financial services
organisations will have to leverage the
ISO messaging format of the NPP, which
provides for advanced data capabilities.
Banks should also consult with their
customers to evaluate opportunities,
Martinus added. A payments hub like the
NPP will support innovation and banks
are likely to see more opportunities arise
on the corporate side than customer.
“There are also more payment hubs
coming together within banks compiled
through single interfaces, and multiple
channels and systems,” Martinus said.
“Being able to see all their different
payment channels on a single portal has
been good for [banking] clients.”
Louise Boreham, Director, CB&S
Operations, Group Technology &
Operations, Deutsche Bank, which offers
payment services globally, noted “The
NPP or other initiatives could make it
easier from an infrastructure perspective
to set up a global transaction banking
model in the local market.”
According to Matthew Brotherton,
Director Payments Technology, Westpac,
the innovation envisaged by [Reserve Bank
of Australia] should not stop with NPP.
Top row (from left to right): Paul Jennings, Chief Technology Officer, eftpos; James Lind, FSI Account Director, Juniper Networks;
Kieron Fitzpatrick, Head of Capability Development, Citibank; Eren Dogan, Chief Engineer – Network and Communications, IAG;
Trevor Dixon, General Counsel and Company Secretary, BPAY; Adam Townsend, Program Manager Pi, CBA; Mangala Martinus,
Managing Director, Payments Consulting Network. Bottom Row (from left to right): Steven Spizer, Vice President, Banks,
FI & Public Sector Group, Citi Treasury & Trade Solution, Citibank; Brett Death, Head of ASP – Life & Investments, Zurich Financial;
Natasha David, Editorial Director, FST Media; Louise Boreham, Director, CB&S Operations, Group Technology & Operations,
Deutsche Bank; Nathan McGregor, ANZ Managing Director, Juniper Networks; Matthew Brotherton, Director Payments Technology,
Westpac; Absent: Tony Ritchie, General Manager, Digital, Technology & Operations, Virgin Money.
Revolutionising the Australian Payments
Landscape to Deliver World-Class Banking

2. REVOLUTIONISING THE AUSTRALIAN PAYMENTS LANDSCAPE TO DELIVER WORLD-CLASS BANKING
“Many of the innovative things that
will materialise have not been thought
of yet,” said Brotherton. “The NPP will
be an enabler of some of those
[innovations].”
Martinus noted RBA’s efforts to
introduce a level-playing field through the
NPP and a core infrastructure that can
create the opportunity for innovation,
whether through a more flexible
messaging platform or by boosting real-
time payments.
“It is about giving your own internal
systems that flexibility to adapt for change
going forward,” said Martinus.
Kieron Fitzpatrick, Head of Capability
Development, Citibank, noted an often-
cited challenge with industry-wide
initiatives is that it could potentially
inhibit innovation.
“There will be a lot of smaller bank
initiatives targeting the real estate sector
or getting rid of a particular niche –
whether it is cheque payments or
leveraging data. That is where we will see
innovation happening a lot more quickly,”
said Fitzpatrick.
Brett Death, Head of ASP – Life &
Investments, Zurich Financial Services,
questioned if standardising all the
messages in data will stifle the ability of
organisations to differentiate themselves
against competition.
According to Martinus, banks should
spend 18 months to two years talking to
their customers about their problems,
as well as with value-added service
providers in the industry verticals they
liaise with.
“That is where they will get quicker
coverage and access expertise,” said
Martinus. “Expertise will be on a bank-by-
bank level, leveraging the platform, rather
than necessarily at an industry-level.”
According to Martinus, the next couple
of years will see a few battle lines emerge
in the payments space. For example,
there will be friction between eftpos and
card schemes, as eftpos is facing flat-line
in transactions for the first time because
of contactless payment technologies.
There are also changes underway in the
ATM space.
“In two or three years banks might re-
evaluate the utility for ATMs,” said
Martinus. “There will be a battle line with
Apple Pay and where they are trying to
take a click.”
Brotherton sees hurdles coming from
several fronts – security, dealing with
non-traditional partners, changing
expectations of customers to changing
the way organisations will do business in
the future.
“The battle lines will be multi-
dimensional,” said Brotherton.
Constant innovation
a challenge
According to Martinus, constant inno-
vation is a challenge for financial services
organisations. “There is always a new
innovation every six months,” said
Martinus. “The challenge for banks is they
havetobackeveryhorse,andunfortunately
it is hard to pick a winner.”
Like retailers, banks are also making
a push into branch transformation and
self-service check outs, Martinus added.
“For some branches, 50 per cent of
deposits that were previously over-the-
counter are now being done through a
self-service device,” he said. “Eventually
we will have cheque truncation and
automation. Banks are also potentially
looking at cash recycling – and that creates
issues around infrastructure and how to
support that in back-end systems.”
Martinus noted Australian banks’ strides
in the contactless payments space, citing
data from Visa that pegs 58 per cent of
face-to-face transactions in Australia are
now contactless. He also noted ANZ Bank’s
recent foray in contactless ATM.
According to Brotherton, it is important
for banks to have a business-led strategy.
“We have to understand what we are
trying to achieve, the drivers, and how
we will derive value from it – whether it
is financial, social or other… And then
from there we select the right technology,”
said Brotherton.
“We have to build and design our
architecture to ensure that we are able to
adapt as the technology or the market
demand changes.”
Tony Ritchie, General Manager, Digital,
Technology & Operations at Virgin Money
Australia, said the challenge of mobile
payments goes beyond merely bringing
together financial industry players. Lining
up handset manufacturers and operating
system and network providers is also a
key hurdle.
“People do not know which horse to
back,” said Ritchie. “In the absence of that,
“The challenge for banks is they have to
back every horse, and unfortunately it is
hard to pick a winner.”
– Mangala Martinus,
Payments Consulting Network
“We have to build and design our
architecture to ensure that we are able
to adapt as the technology or the market
demand changes.”
– Matthew Brotherton, Westpac

3. REVOLUTIONISING THE AUSTRALIAN PAYMENTS LANDSCAPE TO DELIVER WORLD-CLASS BANKING
they choose to wait – both at the
institutional and consumer level.”
Ritchie cited the example of eftpos,
which started out in the 1980s as a series
of bilateral arrangements, and took nearly
eight years to garner critical mass.
Canada’s payments system, as a counter-
example, launched a multilateral system
that was supported by all banks, and
reached critical mass within three years,
he added.
Paul Jennings, Chief Technology Officer,
eftpos, emphasised the importance of an
architecture-driven approach.
“You need to think about capabilities,”
said Jennings. “If you are entirely business-
led, you tend to back the horse that is
currently leading, which could easily be
overtaken.” Focusing on capabilities allows
financial organisations to think about
running projects like infrastructure
projects that lend flexibility in go-to-
market strategies, according to Jennings.
“Despite having large shareholders and
members, we are a company of modest
means,” said Jennings. “We have to be
careful to not back too many horses
because of our limited resources. Hence
that capability-based approach becomes
particularly important.”
Trevor Dixon, General Counsel and
Company Secretary, BPAY, a leader in bill
payments services for its member banks,
sees BPAY’s role as an enabler of innovation
for its banking partners.
“Weworkcloselywithourbankpartners
to make sure the experience of paying
a bill or other financial activities using
BPAY is as seamless on whatever device
they use,” said Dixon. “Our goal is making
sure we are channel agnostic for our
bank partners.”
Steven Spizer, Vice President, Banks, FI
& Public Sector Group, Citi Treasury &
Trade Solution, Citibank, also noted that
banks face the challenge of building the
right international payments architecture
while rationalising multiple different
correspondent partner relationships. This
rationalisation has been driven by the
complexity of managing counterparty,
regulatory, and market risk – in addition
to understanding the payment systems
developments in multiple jurisdictions
around the world.
According to Spizer, the questions facing
financial intuitions revolve around “[how
to build] the very open architecture that
will plug into legacy and next generation
payment platforms around the world,
while at the same time building out a
unique customer value proposition.”
Fitzpatrick added that financial services
organisations will have to think across
consumers, merchants and corporate
requirements.
“You have to move across a spectrum of
[stakeholders], not just ‘Oh, I am in retail,
that is all good’,” said Fitzpatrick.
Fighting fraud
Innovation in the payments space is also
increasingly fraught with security and
fraud-related risks that financial organi-
sations must address. With the emergence
of real-time payments for even large
transactions, fraud monitoring becomes
even more critical, noted Martinus.
“Sixty per cent of Apple Pay transactions
are done on fraudulent cards,” said
Martinus, adding that fraudsters are taking
advantage of any cracks in Apple’s
authorisation mechanism.
Nathan McGregor, Managing Director,
ANZ, Juniper Networks, added that the
scenario of real-time international payments
could make the fraud risk exponential.
“Banks need to prepare themselves for
the fraud risk as much as the new entrants
risk that comes with other capabilities,”
said McGregor. “The risk is that the
new entrant will take the customer
relationship and customer experience,
which translates to the app on the smart
device, dumping the risk of fraud on
traditional banking players.”
Death noted that the insurance industry
faces similar issues.
“We want [payments] to be easy, but
there is a risk that people will not see
the value in what we are selling,” said
Death. “Are customers seeing apps as
the thing that is valuable above the
promise that a bank or an insurance
company provides?”
Ritchie added the approach by financial
services organisations is driven by market
forces, risk, and customer demand.
“When you look at complexity in
payments, it is in the operational require-
ments to manage risk,” said Ritchie. “This
is not just a payments issue, there is a
broader issue around IT security and it’s
becoming tougher.”
McGregor sees opportunity in financial
services organisations monetising data
Steven Spizer, Vice President, Banks,
FI & Public Sector Group, Citi Treasury
& Trade Solution, Citibank discusses
payment’s strategy
“We work closely with our bank partners to
make sure the experience of paying a bill
or other financial activities using BPAY is as
seamless on whatever device they use.”
– Trevor Dixon, BPAY

4. REVOLUTIONISING THE AUSTRALIAN PAYMENTS LANDSCAPE TO DELIVER WORLD-CLASS BANKING
they glean from customers, and not just
from payments. “You can monetise data
that you extract about a person in many
ways. It does not need to be direct
correlations,” said McGregor.
Disruptive threats
Executives noted the threat from non-bank
disruptors taking increasingly larger
market share of the payments space that
could potentially dis-intermediate banks.
For example, players like Apple have a
presence in payments and command a
huge mind share, according to Death.
“Whether it is a toe in the market to
[Apple] doing something in the future,
that is a hindrance to us doing something
else ourselves,” said Death.
Spizer added that many banks are still
assessing the right value and how they
should target a changing market.
“The next generation of payments
platforms are capable of passing much
more information; what is the information
that we are going to value and how will
that data allow for improved client
experience; intelligence and automated
reconciliation?” asked Spizer. He added
that banks and their clients will need to
work out the value the data provides and
who will be conducting the analysis.
“There is a part of the banking
transaction that will always stay with a
traditional bank; the ‘rails’, as we call
them” said Spizer. “But what portion of
the payment and client experience moves
into this next social money interaction
environment remains to be seen.”
According to Ritchie, the trust element
connected with banks will remain an
important consideration.
“It will be of importance, irrespective of
age, as to ‘Can I trust where my money and
information is going and being dealt
with?” said Ritchie.
Increasing regulation is another
challenge for many banks. “All the markets
around the world are doing something
different. They are all constantly
introducing new changes,” said Spizer.
“We live in this global ecosystem. The
financial flows are becoming ever
more international and intertwined,
and we have significant amounts of
rules, technological, regulatory, and
social that we constantly have to stay on
top of.”
According to Jennings, the next few
years could see a contest between open
and closed network.
“The iPhone 6 added an NFC controller
which allows tap-and-go, but it is only for
Apple users, whereas Android allows open
use of NFC,” said Jennings.
James Lind warned against the exposure
to multiple platforms across the world and
transacting inter-country with the
emergence of several digital wallets.
“If we can set the standard [in Australia]
for a model that the rest of the world would
want to emulate, that would be the
ultimate goal,” said Lind.
“There is an opportunity for a healthy
discussion among the banking and
payments fraternity of Australia to set best
practices for other markets to emulate.” *
“We want [payments] to be easy, but there
is a risk that people will not see the value in
what we are selling.”
– Brett Death, Zurich Financial Services
About FST Media
FST Media produces the most successful technology conferences,
roundtables and publications for the banking, insurance and
wealth management sectors across the Asia Pacific region. With
extensive management experience in conference production,
journalism and business development, FST Media prides its
reputation on unparalleled access to senior financial services
executives, and the delivery of high-quality information on trends
and disruptions in the financial services sector.
About Juniper Networks
Juniper Networks is in the business of network innovation.
From devices to data centers, from consumers to cloud providers,
Juniper Networks delivers the software, silicon and systems
that transform the experience and economics of networking.
The company serves customers and partners worldwide.
Additional information can be found at www.juniper.net/au