Our work in 2024: Shaping the future of financial services
Strategy 2024: a year in review

Our work in 2024: Shaping the future of financial services

The most pressing challenges in financial services in Europe we have tackled in 2024.

We have had an exciting year tackling some of the most pressing challenges in financial services in Europe.

These efforts not only address current issues but also pave the way for a more robust and inclusive industry. Here are three key areas we have been working on, each with significant implications for the future.

Challenge 1: Tackling fraud

Fraud is a serious headache for financial institutions throughout the world. In the UK customers benefit from strong protections, including reimbursement for losses, with banks shouldering most of the liability. Europe is taking new steps to safeguard consumers. While this may improve the final outcome for customers, it puts a heavy burden on banks and has knock-on consequences for other financial products and services.

There is growing recognition that no single sector of the economy can effectively reduce fraud. Fraud often originates on social media platforms and can be facilitated (unintentionally) through communications infrastructure like texts and phone calls. How banks, social media companies, telcos and others can more effectively coordinate their efforts to tackle fraud is a key question for the year ahead.

Our work extends beyond the UK, encompassing Europe and Latin America, where fraud takes on different characteristics and so presents a new set of challenges. Building on lessons learnt globally, we are contributing to more resilient, fairer financial ecosystems.

Challenge 2: Payment systems and their evolution

The payment system is undergoing significant transformation, revealing both vulnerabilities and opportunities. Europe’s reliance on US-based payment giants raises concerns about resilience, especially at a time of geopolitical tensions. Politicians are coming to recognise that developing independent, secure payment systems is increasingly important for European financial stability.

We have been working on several fronts in this regard. We have considered the potential of central bank digital currencies (CBDCs) to revolutionise payments, concluding that their use cases and implications require careful consideration and that customer adoption is not straightforward. Similarly, account-to-account (A2A) payments present a promising alternative to traditional card-based systems. But significant work needs to be done to establish a sustainable commercial model that provides the right incentives to customers, merchants, banks and payment initiation service providers (PISPs) while promoting growth and innovation.

Challenge 3: Consumer Duty and conduct risk

The UK’s financial landscape is evolving. The Consumer Duty, a set of standards to protect retail financial clients that came into force in July 2023, has shifted focus from input-based conduct regulation to outcomes and what impacts financial products and services actually have on customers. The Labour government is proposing to further enhance consumer protections through a financial inclusion strategy that highlights education, digital inclusion and partnerships with industry players as critical elements for improving financial outcomes.
Our work in this area focuses on shaping policies that promote financial resilience and accessibility. We anticipate innovations such as long-term mortgage products and savings mechanisms designed to bolster financial stability. Ensuring access to affordable credit and protecting vulnerable customers are key priorities.

Consultations expected next year provide an opportunity to influence the government’s strategy. By integrating themes like accessibility, digital innovation and financial health, there is an opportunity to drive systemic change that addresses the needs of underserved segments of the population. These efforts are in keeping with a broader view of financial services as a force for good in society.

A collaborative path forward

Our work on fraud prevention, Consumer Duty and payment systems underscores the imperative for collaboration across the financial services industry. Rising to these challenges requires partnerships among banks, policymakers, technology firms and other stakeholders. By fostering innovation and advocating for fair, inclusive solutions, we are helping to shape a future where financial services can thrive while serving the needs of all consumers.