The cross-border payments landscape is undergoing a seismic shift, driven by the G20 roadmap, regulatory pressures, and a wave of innovation from banks, fintechs, and network providers. At the forefront of this transformation is a growing spirit of collaboration and partnership, poised to deliver a superior experience for customers sending and receiving payments globally.
During the BAFT (Bankers Association for Finance and Trade) Global Annual Meeting, industry leaders, including Scotiabank's Matthew Parker-Jones, Senior Vice-President, Global Transaction Banking, convened with global peers to discuss the shifting payments paradigm. The panel explored the client appetite for seamless, transparent, and real-time cross-border payments, mirroring the convenience of retail experiences.
Parker-Jones emphasized, "Our corporate clients are seeing what is available now on the retail front - incredible convenience, speed, transparency, including the ability to do payouts with tools like digital wallets - and there is great desire to access the same features in the corporate world."
The Race for Payment Innovation
The panelists highlighted the dramatic innovation unfolding within their organizations, fueled by partnerships with agile fintechs, particularly in regions like Latin America and Asia, where legacy systems pose fewer constraints. Regulatory bodies in these regions are actively fostering an environment conducive to cross-border payment innovation, recognizing its potential to drive economic growth and financial inclusion.
Harmonizing the Landscape: Interoperability and Standardization
Amidst this localized innovation, the panelists acknowledged the need for interoperability and standardization to avoid fragmentation and achieve true global cross-border B2B transformation. The G20 roadmap emphasizes standardized data exchange and payment system interoperability to reduce friction among disparate systems and regulatory frameworks.
Swift and VISA peers detailed their efforts to create network harmony, including Swift's push for ISO 20022 adoption and shared infrastructure projects to bridge cross-border gaps beyond individual bank networks.
Parker-Jones underscored the significance of standardization, stating, "The real change-makers in transaction banking will come from standardization and scale, such as the rollout of prevalidation, when we get everyone on the same ecosystem for correspondent banking."
Accelerating Change through Partnerships
To quicken the pace of payments transformation, banks and network providers are embracing partnerships and collaboration with fintechs. Parker-Jones highlighted Scotiabank's approach: "We create the channel and product, and manage the 'front door' for our client, whether that's an API, portal or host-to-host, and we take care of the complexity for our client by being the aggregator of those different partners behind the scenes."
The Path Forward: Collaboration for Innovation at Scale
The panelists expressed optimism that collaboration among partners to roll out technology and standardization will enable the industry to achieve the G20's ambitious goals, satisfy regulatory compliance, and revolutionize B2B cross-border payments, enhancing user experience, reducing costs, and promoting financial inclusion.
Parker-Jones summarized the role of established industry players in this dynamic environment: "The value we provide as a bank is more than payments. It's about advice, trust and value-added services that go on top of that. Our strategy is to stay close to our customers, welcome new ideas, and work with others to curate the best mix of differentiated services. We are better together, by bringing the global community of partners to the table and leveraging those innovations at scale, to create significant value for our clients everywhere."
In the next era of cross-border payments, collaborative innovation that preserves client trust will be the driving force, reshaping the industry and delivering unparalleled value to customers worldwide. For more insights on the next era of competition in cross-border payments, watch the full panel discussion on YouTube.
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