Collaboration: a Key Component of the Global Payments Transformation
By Ross Jones, Product Line Manager, Global Payments Treasury Services EMEA, BNY Mellon
New technological developments are unfolding at a rapid pace. In order to truly benefit clients, this transformation will best come about through collaboration between providers.
‘Fintech’ has become a buzzword in payments, and while the word is mostly associated with an internet-savvy, millennial generation creating a wave of cutting-edge entrepreneurial start-ups, its broader definition encompasses developing technology that is revolutionising transaction banking. This is especially true for payments and, even more recently, regulatory and anti-money laundering (AML) oversight and compliance.
Undoubtedly, technology is enabling significant advances in the world of transactions. For example, over 30 countries across the globe have introduced – or put concrete plans in place to introduce – real-time domestic payment schemes in recent years. In the US, for instance, the Real-Time Payments (RTP) scheme is set to launch in the coming months. This represents a major leap forward with respect to enhancing efficiency and speed, and introducing cost reductions. BNY Mellon will be one of the first participants planning to offer real-time payments in the US.
With such significant innovative advances seen in domestic payments, it was only a matter of time before the industry began turning its focus to applying similar capabilities to global payments. Cross-border transactions are soaring, making real-time solutions – irrespective of location (complete with transparency of payment status and real-time fraud analysis) – a key priority.
While technology will naturally play a significant role, fintech companies cannot address the global payment market’s needs alone. Indeed, to date, it is banks that have been at the forefront of exploring new concepts and their real-world applicability to deliver enhanced global payments solutions. There is therefore a clear role here for collaboration.
Many banks are leveraging the extensive tech know-how of fintech companies to advance their global payments offerings and risk management tools. Such partnerships bring mutual benefits. Banks, after all, have unrivalled payments experience, knowledge of the regulatory and fraud landscape, and an established, extensive client base. Meanwhile, fintechs, as disrupters, are looking at problems afresh, with an eye for innovation, efficiency and marginal gains.
Together, banks and fintechs can combine strengths and optimise their approach to innovation, creating robust solutions that bring enhanced speed, transparency and security – and potentially transform cross-border payments.