Tino Kam, Nordea’s Head of Product Management for Transaction Banking, offers his take on the value of P27, the platform’s expected benefits, and the importance of having a robust and resilient payments platform that serves the entire Nordic region.
As Nordea’s representative on the P27 Advisory Board, Tino Kam is an important driver of Nordea’s engagement with P27.
With more than two decades of transaction banking experience across Europe, Kam has had a front-row seat to the evolution of payments, from initial discussions about the Single European Payment Area (SEPA) through the rise of fintechs and the establishment of P27.
“Transaction banking is all about payments,” he points out.
Thus Kam and his colleagues at Nordea are keenly aware of P27’s potential to reshape the payments landscape in the Nordics.
“P27 is very relevant for a Nordic bank like Nordea and it’s customers. It’s definitely one of Nordea’s transaction banking key priorities in the coming years,” says Kam.
And P27 is unique compared to payment initiatives that have come before, he adds. Unlike SEPA, for example, P27 is an industry initiative rather than a project driven by regulators. In addition, SEPA was focused on one currency, whereas P27 is being developed to accommodate several currencies.
Technology developments as well as customer expectations have also shifted the payments landscape significantly over the last decade meaning “instant is the new normal,” Kam adds.
Kam expects P27 will empower Nordea to provide a “harmonised and standard offering” to customers regardless of where in the Nordics they are based. As he puts it, P27 will enable a Nordic “Starbucks” experience for Nordea’s customers.
Regardless of whether customers walk into a branch in Helsinki, Copenhagen, or Stockholm, or log into any of Nordea’s digital channels, the “menu of options” and overall customer experience for making a payment should be the same, he explains.
With P27 as the underlying payments infrastructure, Nordea will be able to offer customers across the Nordics similar products and services, as well as comparable price tags. Especially merchants and corporate clients will get a similar payment or collection experience, whatever channel they choose and what specific collection instrument like invoicing or direct debit.
“P27 will allow us to offer a truly Nordic customer experience,” says Kam.
P27 will also be more “resilient, scalable, and compliant” that the domestic infrastructures it replaces, some of which are “nearing the end of their life-cycle”, he adds.
And as payment volumes and regulatory pressures continue to increase, P27 can offer Nordea and other banks a stable, robust platform that also complies with the demands of central banks, FSAs, and other regulators.
“Having a resilient and robust platform may not be as sexy as some of the other benefits of P27, but it’s hugely important for our customers,” says Kam.
P27 also has the potential to enable global interoperability as it’s based on the global ISO standard.
“P27 will ensure our payments services have a 100 percent reach, not only in the Nordics, but that our customers can reach people and merchants globally,” says Kam.
This will open up new benefits for Nordea, as well as its corporate customers, consumers, and society as a whole.
On the corporate side, Kam believes P27 will facilitate the creation of value-added services, especially when it comes to expanding e-commerce and cross border flows. This will in turn make it easier for businesses to expand domestically and internationally by providing payments that are “low cost, low risk, and instant.”
For consumers, P27 has the potential to spawn more instant digital banking services, in multiple currencies and across borders, making cross-border, cross-currency payments as “fast and easy” as domestic mobile payments are today.
“The true value of P27 is what we can add on top,” says Kam.
Note: P27 is still in a preliminary stage, and the establishment of P27 is subject to regulatory approvals and requirements.