Tapping into the future of finance: 3 experts discuss the ways frictionless payments will revolutionize digital banking within the decade

• Technological advancements in banking mean that now people and institutions can pay for goods and services frictionless.
• Experts share their insights into how frictionless payments are changing the way people engage with online banking.
• The conversation was part of Insider's event "Finance Meets Its Future," which took place on Thursday, March 23, 2023.

The world is constantly inundated with technological innovation. Frictionless payment systems, a type of new payment technology, are an outcome of technological innovation in finance. Applepay, Googlepay, and Paypal allow people to unlock their purchasing power with the simple tap of a device, avoiding the added steps of physical authentication.

"I think friction is important when it comes to payments, especially when it can actually stop fraud. When I'm sending money out, I always want that friction from a second-factor authentication," Soups Ranjan, co-founder and CEO of Sardine, said during Insider's virtual event, presented by Amberdata, "Finance Meets Its Future," which took place on Thursday, March 23rd.

Carter Johnson, senior finance reporter at Insider, spoke with Douglas and other financial experts about frictionless payment systems.

Jackie Reses, chair and CEO of Lead Bank agreed, "In many cases, friction can be a benefit. And if I think about what it does, friction really limits you from having a real time transaction going through." Reses acknowledges the complexities with friction in banking and payment methods today, but hopes that in the next decade this friction will be resolved.

Sarit Amir, innovation and emerging tech for payments lead at JPMorgan agreed, "We want to prevent fraud, but we also live in a day of instant gratification and on-demand, so we want to make sure that we can address real time payments because there's just consumer expectation around that."

As banks continue to digitize their platforms crises like the collapse of Silicon Valley bank and the sale of Credit Suisse breed apprehension and fear among business investors. Amir said, "SVB clearly created a platform to help entrepreneurs and startups, and, if you think about it, from the idea itself all the way to scaling a company, that was a unique value proposition, and I'm sure that's very difficult for a lot of entrepreneurs and startups".

Reses said, "Once someone starts to scale, they need to pay far more attention to who that partner is, how successful they are in working with regulators, what kind of quality clients do they have." Reses maintained that prioritizing the highest level of integrity mitigates the risk factors and fraud in banking.

Rajan agreed that building loyalty and trust in banking technology and frictionless payment systems requires due diligence. He said, "One thing I'm really bullish on is that in the near future, we will have much better technologies, which is going to align all the different participants in this ecosystem."

The future of finance is digital

The experts agree that in the next decade, digital wallets and frictionless payments will be the banking rule, not the exception.

Reses said, "I think it means that where we started with money being digital-only amplifies, and money movement around the world, such that borderless commerce can take place, for both supplies and people, where friction is far reduced from what it is today."

While she sees the importance of digital-only money, Amir predicts that in a decade the digital wallet will be in more of the B2B space. She said, "When you're thinking about B2B and the digital wallets and real-time payments, you have to incorporate the nuances of cross-border and that makes it even more challenging."

Rajan noted that each person is going have a unique way of engaging with frictionless payment systems.

He said, "With faster payment methods, you get faster ways of losing money or faster fraud." Rajan concluded, "We need to now start thinking about protecting users' money, which is really in their phones, in a digital wallet, from very different ways."