Kicking off the 18th edition of EBAday – this time in Madrid, Spain – Wolfgang Ehrmann, chairman, Euro Banking Association, opened the show by gracing the stage and welcoming nearly 1200 practitioners from all corners of the payments and transaction banking ecosystem to discuss the latest trends and share different perspectives.

At the second in-person conference, after two years online, Ehrmann celebrated achievements across the European payments industry such as EBA CLEARING turning 25 as well as STEP2, the pan-European automated clearing house that processes mass payments in Euro and is one of the key clearing and settlement mechanisms in the Single Euro Payments Area (SEPA) turning 22. In addition to this, MyBank’s 10th anniversary, the e-payment solution which enables users to make and receive payments through an immediate bank transfer via their own online banking portal.

EBAday is an event that “actively shapes the future, just like we have actively shaped the past,” Ehrmann said. He continued to say that “coming together here, we have the shared vision and goals needed to drive actual progress and development in our industry. Our hands on approach to building future proof, impactful services and solutions for our customers has always been the defining strength of the EBA community over the years.”

The EBA community, which started out as a group of banks, has broadened and diversified to include other payments services providers and fintech firms. This cross-sector ecosystem allows the EBA and Finextra, the co-organisers of this event, to bear the big picture in mind and zoom in on topics to prioritise next steps. Topics to be covered at this year’s EBAday include real-time and cross-border payments, identity services and fraud prevention, payments as a service, open finance, fintech collaboration, to name a few.

Similar to the past few years, EBAday started with keynote sessions on the main stage and will be split out into two streams. 16 fintech startups and scaleups also had the opportunity to showcase their offerings at the Fintech Zone, and new for 2023, the FinTalks stage welcomed fintech representatives to explore the trends they’re seeing. Lunchtime roundtables on women in finance and sustainable finance also made a comeback and allowed attendees a chance to reflect on structural issues in the industry.

Carlos A. Sanz Luengo, head of payment systems, Bank of Spain, followed Ehrmann and explored payments, the implications of new technologies and changes in legislative frameworks. He posed a question to the audience and asked whether there is a “need for a central bank strategy to respond to the ongoing changes in the payment landscape?”

He added that the sector must comprehend that payments are “undergoing fundamental changes driven by the digital revolution and its impact on the demand for new forms of payment, the provision of innovative payment services in the response to public authorities. The digitalisation of the economy has changed many aspects of different areas of our daily lives and payments are not an exception.” Calling on this revolution and the shift to SEPA, Luengo said that online bank transfers and payment cards raised the level of comfort and security with connected lifestyles.

Amid this demand for immediacy and seamless integration between payments and services, central banks are becoming increasingly concerned about privacy, cybersecurity, and reliability, and are adapting policies to ensure that payments remain resilient, efficient and inclusive, Luengo explained. “Financial authorities are aware these risks can go hand in hand with tremendous opportunities and as a consequence, are forced to follow these developments, that is something that is becoming increasingly complicated.”

Echoing Ehrmann, Luengo added: “Given the speed at which innovation occurs, the Euro system is currently working to overcome the challenges as in the past, combining our strengths and working together with older actors towards a common goal. This collaboration remains the best way to build a more efficient and inclusive European payment system for the future.”

How Deutsche Bank, BBVA and JP Morgan handled the Russia/Ukraine war

Tackling the core subjects to be covered at EBAday 2023 in Madrid, Spain, Marc Recker, global head of product, institutional cash management, Deutsche Bank; Raouf Soussi Laghmich, head of strategy for enterprise payment, BBVA; and Renata Vilanova Lobo, head of global clearing, JP Morgan, participated in a strategic roundtable, led by Anita Hawser, Europe editor, The Banker, Financial Times.

Highlighting the biggest challenges banks are currently facing, Soussi stated that the issues can be grouped intofour: regulation, new technology, competition, and customer needs. Expanding on this point and exploring the current macroeconomic environment, Recker added that these concerns are not new concerns for banks.

“We have been dealing with either economic, philosophical,or political issues, be it a financial crisis or a Euro crisis. How global banks cope with that is to flexibly adapt their respective strategy. Nowadays, we are confronted with the war between Russia and Ukraine, tensions between the US and China and we see it impact from a macro economical perspective in terms of inflation, but also rising interest rates,” Recker said.

Despite this, Recker added, the demand for cross-border payments is increasing year on year and international banks remain well positioned in this space to deliver on this. “We need to find the balance as a financial institution; on the one side, delivering secure and normative solutions and services, while on the other side, being a trusted partner for our clients that can manage these difficult situations.”

Hawser reiterated that the events of 2022 are incredibly different from 2008; we are not in a financial crisis, but a poly-crisis, arguably placing more pressure on banks to do just as Recker stated. He went on to explain that “what is currently top of mind to our end clients is recalibrating the supply chains and you will be there as a trusted global transaction bank to support them along the journey. Also, providing liquidity management or investment options for our clients so they can benefit from the political, economic environment because the biggest point when coming back to payments is changing client expectations.

In Lobo’s view, “we are definitely going through a very unique time, with so many things changing at the same time and when I think about navigating through this very interesting environment, I think resiliency is as critical as possible from a financial standpoint and an operational standpoint. Starting with having a very linear and well-defined long-term strategy can make sure what’s feasible across your organisation, and then the decisions you’re making today are fully aligned with long-term strategy.”

When managing events like the Russia/Ukraine war, prioritisation is key and as Logo elucidated, investments, as well as budget and time, must be allocated accordingly and in a way that provides room for failure. “So, if something fails, especially new, disruptive ideas that will not jeopardise your ability to thrive with your core business and liquidity management. Not only having a very well-defined strategy to manage your liquidity and all the tools in place but making sure that you’re acting fast and you’re making decisions right away.”

Referencing the recent failure of certain US regional banks, she recalled that liquidity management was a struggle in these cases because of a lack of strategy and activity, as well as stability and scalability. Investing into core capabilities and operations is crucial, but banks must continue to innovate and leverage new technologies to automate and remain resilient.

The conversation moved on to discuss sanctions, the impact they are having on banks and the progress within cross-border payments. Recker responded to this and said that the sanctions need to be respected, because if not, this could result in institutions quickly going out of business and having a wider impact on the entire financial system.

This dramatic increase in complexity – in February/March 2023 when sanctions were introduced across the UK, US, and Europe – resulted in banks having to answer their clients’ questions around why cross border payments failed to be executed. He added that “improvement is needed in the dialogue as regulators try to get to a much more balanced approach in terms of sanctions and it would allow transaction banks to handle them more efficiently than today.”

He continued: “A regulator does not know how cross border payments work. They want to establish a sanction for a different goal, but what we have seen since the last couple of months and years is that the dialogue between regulators and transaction banks is getting more open.” Soussi also discussed how BBVA, operating in both Europe and Latin America, handles trading between countries that continue to have a relationship with Russia and have not imposed sanctions.

Lobo added that when the Ukraine invasion happened, “several different sanctions being imposed on our databases were affected immediately. That was quite challenging, especially considering that the sanctions were not straightforward – they were not new names or new countries added to the list. Technology plays a very critical role in that process, by identifying new data components and systematically implementing them pretty much overnight. We process about $10 trillion a day, and with an STP raise of 99.4%, it would be quite impossible to keep up with all those sanctions without technology, combined with structured data.”

She highlighted that if ISO20022 had been implemented at that time, the process would have been much easier. Sanctions will become more complex, but with ISO20022, there will be more efficiency.

Banking leadership needs just as much innovation as banking technology

For this year’s EBAday Challenge Speech, Claudia Olsson, CEO and founder, Stellar Capacity and Young Global Leader of the World Economic Forum, provided new perspectives in understanding technology’s impact on society, people and leadership.

According to Olsson, while technology is accelerating, the leadership within organisation and the approach to challenges has not been updated at the same time or in a way that would enable the payments and transaction banking industry to fully grasp the opportunities that digitalisation presents.

Using the example of George Hotz, the hacker renowned for developing iOS jailbreaks, reverse engineering Playstation 3 and creator of self-driving car machine learning company, comma.ai, Olsson said that Hotz essentially “open sourced innovation around this and he’s continuing to develop it. That’s just one example of how one individual, one hacker is challenging the entire industry.

Olsson went on to consider the UN, “a global architecture that was built seven decades ago. Many of the structures that we have today are not adjusted for the developments in cloud computing, artificial intelligence, and generative AI. I believe that in the coming years, we will have to rethink our global architecture and how it’s developed, how decisions are made, and how we collectively decide about potential opportunities,” she explained.

With it being easier than ever to connect with communities in different countries and continents, innovation will spread as fast as more of the global population goes online. Referencing Metcalfe’s law, which states every time you add a new user to a network, the number of connections increases at a proportional rate to the square of the number of users, Olsson praises interconnectivity.

“If you add more nodes to the network, the higher the value you will get out of the innovations and this means that in the coming years, we’re adding more and more nodes to the global network and the speed of innovation will only continue to speed up.” Further, with Moore’s law, which claims that the number of transistors on a microchip doubles every two years, Olsson highlighted how computing power has in turn doubled every other year.

“We’re seeing that many scientists believe that this might go even faster with quantum computing, for example. And there’s even a group called the transhumanists that believe that in 2045, our computing power will surpass the wealth of all the human brains and then we will develop a super intelligence that can improve itself. And when it improves itself, it will create new ways of decision making. The question is of course, what will happen with humans as others believe that it will happen even sooner than 2045, given the recent developments in large language models and generate AI?”

Technology adoption will always be on an upward trajectory, and solutions will need to be built that meet these trends and the exponential curve. Olsson provided an example of delivery robots during the Covid-19 pandemic, and that if innovation must continue, the next step is to allow these robots to receive payments. Another interesting example is the creation of new digital currencies to be used in Activision Blizzard games such as World of Warcraft, and in some cases such as Roebuck, the currency is valued at more than 5 million Euros.

Olsson asked: “This is a whole new economy that’s being created, and our future customers are getting used to being in these platforms. The question is: do we as national insitutions have enough strategies to cater to this generation and make sure that we are as modern, updated and as digital as they are?”

Generative AI will be crucial to this; by solving complex problems with synthetic data and creating new scenarios, it can be used for strategic purposes. In Europe, there are currently 80 million people working in the knowledge economy, and 25% of the tasks can be completed with generative AI in the years to come. This will result in substantial job reduction, but also entrepreneurship. However, before this happens, biases will also need to be resolved.

According to a LinkedIn Learning 2020 report, the most in-demand soft skills were:

1. Creativity,

2. Persuasion,

3. Collaboration,

4. Adaptability, and

5. Emotional Intelligence.

However, the most in-demand hard skills were:

1. Blockchain,

2. Cloud computing,

3. Analytical reasoning,

4. Artificial intelligence, and

5. UX design.

Further to this, according to the World Economic Forum, the top 10 skills in 2015 were:

1. Complex problem solving,

2. Coordinating with others,

3. People management,

4. Critical thinking,

5. Negotiation,

6. Quality control,

7. Service orientation,

8. Judgement and decision making,

9. Active listening, and

10. Creativity.

However, the top 10 skills in 2025 are expected to be:

1. Analytical thinking and innovation,

2. Active learning and learning strategies,

3. Complex problem solving,

4. Critical thinking and analysis,

5. Creativity, originality, and initiative,

6. Leadership and social influence,

7. Technology use, monitoring, and control,

8. Technology design and programming,

9. Resilience, stress tolerance and flexibility, and

10. Reasoning, problem solving and ideation.

Customers expect instant payments today

The afternoon of EBAday 2023, day one, in breakout one got straight into a key theme of the event, immediate cross border payments.

Moderator Pilar Claveria, payments advisor, Spanish Banking Association, was joined by panellists Marianne Demarchi,chief executive Europe, Swift; Simon Eacott, head of payments at NatWest Group; Marianne Pauwels, senior vice president, product management, Mastercard Cross-Border Services; and Marc Pomes Bordedebat, senior product manager in Euro clearing solutions, European financial institutions product and propositions and global payments solutions, HSBC Continental Europe.

This panel brought their depth of experience to discuss the progress made in existing cross-border payments initiatives and how regional initiatives fit into a global context. Claveria opened the session with some of the current background in the position of instant cross border payments. While we may not be quite there yet, Claveria pointed out the “strong political will to make payments around the world in seconds.” She further added that in this current climate, this is something “customers are also expecting.”

Demarchi took off from this political point, mentioning how seriously the G20 are taking on the task of instant payments. She commented that looking at what has been achieved so far in cross-border instant payments, there has been “huge progress and success in some areas and some remaining challenges in other areas.”

Eacott followed up on these challenges by saying that while there is a lot of progress that has been made, he would like to see more development into making cross-border instant payments “very customer centric.” He continued: “Our job as payments is to make sure we reflect what that customer need is. Do I see a vision where all cross-border payments are instant, I certainly think that they should have the capability of being instant and then building propositions from there.”

Pomes Bordedebat argued from a global banking perspective that “we see real time or instant payments flourishing in different geographies across the group. […] In other markets, you need to sit back and see whether the initiatives make sense for your customer base.”

He continued that for example, “if you're banking with corporates, for example, most of the time, these are preprogrammed payments and what corporates need very often is predictability and visibility of where the funds are and the time it takes to get there. To a certain extent instant-ability is less important than the certainty it is going to get to the beneficiaries on the other side.”

Pauwells argued that it will in the future: “it’s possible, at least in terms of speed, to have an experience that is similar to the domestic experience if you have a system in the middle.”

She later concluded: “There's always going to be differences and data requirements and we have to aim to standardise, but I don't see that happening all over the world and therefore we need to look for interoperability solutions that can take care of the differences in format and the differences in screening and data requirements and shield the consumer as much as possible from these discrepancies, that friction it's not possible to do it entirely.”

This session was followed by ‘Payments processing – from commodity to business opportunity?’, looking at the hot topic of Payments as a Service (PaaS).

This panel was made up of Sheri Brandon, chief market officer financial services, Worldline; Rachel Hunt, head of strategy and growth, Volante Technologies; Guy Moons, head of solution consultants, FIS; Juan Olaizola, CEO, PagoNxt Payments (a Santander company); Craig Ramsay, global innovation and partnership lead, GLCM, HSBC; and was moderated by Gijs Boudewijn, general manager, Dutch Payments Association.

This varied panel discussed some of the different perspectives on PaaS. Ramsay described three pillars of a PaaS system: the corporate pillar, which is the venue where the payment actually happens; the banks, they hold the money; and in the middle there is everybody else, this could be infrastructure or SaaS. He argued that when discussing PaaS it is “about taking away the friction by solving a real customer pain point.”

Olaizola argued for the necessity of PaaS, saying “the complexity of managing payments is huge. If we have this problem, everyone in the industry has this problem. You cannot keep tackling this situation country by country. You need to move everything to a single platform and get to a level of abstraction on payments.”

Brandon concurred on this point saying, “[PaaS] is removing all the hassle for a bank. Not those as big as HSBC, because that's your core business. But banks where repayments are not the core business. We look at your business model and become relevant to get real customer.”

Hunt countered this point and argued: “I don't think it's the size of the bank is how important payments is to your core business. It could be a smaller bank, where payments is very important. But just try and think about where are your common challenges and maybe start with simplifying the pre-processing side of it.”

Hunt continued by saying that “there are some commonalities that you can start thinking about, and despite the fact we have ISO20022, we have many flavours of ISO20022. You can start coming to a common set of standards and APIs which helps us.”

Moons argued that you need to look at your PaaS needs from two points of view. “For the customer, you want to give them a seamless experience across whatever channel they come to you with whatever payment they come to you for. That's where you have your bank's corporate identity. If you look at the other side, where you have the bank, then you are more looking at the most efficient and most standardised ways of processing that payment in the cheapest way so that you can make most of the value to your end consumer.”

Banks exploring new strategies in AI, data, and cloud

The afternoon of the first day of EBAday kicked off with the panel ‘How new technologies are transforming banking’ in breakout room 2.

Panellists Cal Corcoran, vice president and global head of banking at Microsoft, Simone Löfgen, managing director of payments platforms at Commerzbank, Andre Martins, head of banking innovation and open finance at NTT Data, and Simone Satan, global head of digital market management and treasury services at BNY Mellon discussed AI, cloud computing, and innovative automation technologies being used to transform the payments industry in a session moderated by Graeme Jeffrey, partner at Bain & Company.

With the rise of ChatGPT and the incoming AI race among Big Tech, AI has become a hot topic in the banking industry. Satan said the three main use cases in AI currently is risk management, fraud detection, and data analysis that can facilitate all of the above. Martins stated that AI can inspire loyalty through hyper-personalisation and enhanced customer experience. He added that by democratising data more meaningful results can be extracted and better customer understanding can be integrating within operating systems.

Commenting on generative AI solutions, Löfgen described a transformation in the AI industry and that Commerzbank has been in conversation with ChatGPT.

She continued: “Everything starts with data because of course an AI can only learn what you provide as input and I think that is something specifically relevant when we look in the payments space. When we are looking to statistics 90% of useful data in banks come from payments. Most of the information is in payments, and fraud is the most important use case. There will be a rise in fraud. Getting faster in our detection of fraud and really understanding that process is where AI can add speed and efficiency. I don’t want to say that AI will replace human interaction, I think profiles are changing and make all operating processes much leaner much more efficient, and then use people for more value added services instead of copying data from A to B.”

On the ethical concerns of AI, Corcoran explained that Microsoft is intent on maintaining responsible AI standards. Corcoran emphasised that AI needs to be designed with transparency and with intention to advance society and the government. It also needs to be accessible. Money must be set aside for policing for technology, and it will take time for all of these measures to be put in place.

Moving on to the talent in the AI field, Löfgen stated that training is essential to enable AI application, and Satan added that skills need to be consistently refined to get a better understanding of new technology:

“Rescaling the workforce is a key topic. To bring everyone within the organisation up to speed, it's not just only about hiring staff retain the right expertise, but it's also how you train your existing employees. For the team that I manage, I want to make sure they keep up with all the technology that's coming in. I recommend them to take time every week to educate themselves, to read whitepapers or to listen to podcasts to get a better understanding of the new technology.”

On robotic process automation (RPA), Corcoran notes that there is a demand for improved customer experience and AI chatbots, but there is an issue with how RPA is being deployed at banks. He expounds: “It is particularly terrible at banks, they have a lot of the bots that run to the thousands. They have used the word RPA tooling as essentially sticking a plaster over the complexity of how they are structured, and are not willing to go through the pain of defining the processes, optimising the processes, documenting the process, and actually cleaning up how they operate. They use RPA tooling as a coping mechanism.”

On the developments that banks are seeing whilst embarking on their cloud journeys, Martins noted that the financial industry is still in its early stages of the cloud. He explained that cloud has not reached its full potential as many banks are still navigating on whether to use public or private cloud, to go hybrid or commit to one cloud provider.

However, he was optimistic on the market for scalability: “From my perspective, cloud it still doesn't reach its full potential that we want from the beginning of the journey.AI will be one of the catalysers of this experience. I think we are going to see a lot more in of it in the future.”

The panellists expressed that there are negative aspects to new technologies, including AI biases, ineffective automation processes, and lack of training, but there is a wealth of innovation in which the banking industry is in the process of adopting, and the kinks can be worked out to create more exciting, seamless, and efficient services.

In the session ‘The clever use of data’, panellists explored the extensive forms in which data is being utilised in the financial industry to boost growth and customer experience. Speakers Paulo Barbosa, COO at Banfico, Edward Chandler, SVP and head of commercial and money movement solutions for Visa Europe, Fabian Khoshbakht, global head of client insight and innovation at BNY Mellon, and Edwin Sanders, strategy payments lead at Rabobank, were moderated by chair elect from ISO TC68 SC2, Lauren Jones.

Data is becoming a commodity and there should be a balance between the commoditisation of data and security standards. Khoshbakht commented that there has been a change in the guidance on how data is protected, as in earlier eras of online presence and digital banking, it was emphasised for data to be protected and private, but now there is a demand for open data and sharing data. He expressed that he does not see data as an El Dorado or Holy Grail, but a piece of a larger puzzle.

On Visa’s approach to customer data, Chandler stated: “We believe in this thesis to enable that data to be put to good use, then you need to have some really strong frameworks around them, whether they're local frameworks, consent management frameworks, or others. We will need to evolve as the data ops and be able to deliver to our clients and customers.”

From the perspective of a commercial bank, Khoshbakht stated that BNY Mellon is focused on consuming data and turning it into something actionable for their clients. The specialty of such commercial banks is to consumer data and bring is back to the demands of the consumer.

He explained: “I think the key is more about using data to understand what your clients are doing and why and how, and leveraging that to take it back to them. We talked about mining data. You combine as much data as you like, but it's really pulling out what we see, whether it's trends, analysis, or common patterns. For me, it's more about how can I create value for our clients using their own data.”

Sanders noted that there is a significant difference between Big Tech and banks in the description of data as a pot-of-gold commodity, he explains: “There is a difference in what financial institutions can do with data and for example, Big Tech like Google. There are two differences: we believe that it's the customer's data instead of our data, and there is a social contract between financial institutions and society that we use data, but responsibly. I think when it comes to the El Dorado effect, it's about monetising. I do believe that some kind of El Dorado where we can help customers much more in their daily life by using the data we already have. We did quite well as banks in general to digitise but we didn't digitise the emotional layer, and we can use digitise that with the data we see.”

Open banking opened up a space for fintechs to innovate and it persuades legacy banks to catch up, and it opened up the industry for data democratisation. However, with the wave of data coming into banks and fintechs, security and regulation becomes more important and needs to keep up with the sector and place checks on industry leaders.

Barbosa commented on how open banking has revolutionising the data democratisation process and regulation:

“It a revolution in the sense that it forced banks to keep people away. I think the regulators were quite ambitious. At the beginning, the banks were not so happy with this initiative, but that was in a way a small revolution. We are not at the stage yet where we see fintechs and even banks do everything. We need to include also GDPR and other regulatory initiatives that we saw run into that they gave this notion to the consumer that is, ‘I'm the owner of this thing and I give access to someone else.’ We are seeing that other countries are continuing with regulatory initiatives and turning in new open finance, open data, and the pool of data is only getting bigger.”

Data is rapidly becoming a key aspect of the financial industry and all players are greedy for more data to create better offerings and services for consumers. However, not all data is put to good use and the industry needs to come together with regulators and policymakers to ensure that customers are protected, and that data is used responsibly.

In the panel ‘Bridging the cloud migration gap’, speakers discussed how cloud is driving digital transformation and in what ways banks are leveraging the cloud to enhance their operations. Panellists include head of product in Europe and new markets at Form3, Erik Alstromer, head of sales and marketing at Intercope, Daragh Kirby, senior director of global solution consulting payments at Finastra, Amelia Ruiz Heras, and solution architect at Engine by Starling Bank, Paul Williams, moderated by chief information officer at Payments Canada, Shawn Van Raay.

There are organisational challenges that prevent larger institutions to embrace the cloud, particularly a struggle with adapting the mindset and designing a new architecture. Alstromer advised that major institutions should focus on adapting the mindset within the company first before moving to adopting cloud migration technologies:

“The larger, more mature companies who can dip a toe in the cloud but doesn't really run much on discovered moments. Well, those ones I'd say the challenges are mainly organisational, rather technical. Organisational in a sense that there are inherent features of the company's processes which prevent them from moving to the cloud. The way they design architect deploy cases are not always compatible with unplanned offerings. There needs to be a mindset shift in process around how they do all these steps from top to bottom.”

Kirby explained that fintechs are keen to go to the cloud, but more traditional, tier one banks are more hesitant. “The regulator needs to help with the push towards the cloud so that the pioneers don't end up in the cloud and somebody says they aren't risking their transaction banking career. There are lots of challenges, but I think the buzz has gone out and maturity starting to come into it.”

Heras stated that she sees the cloud as an opportunity to experiment and play with new innovative offerings without disrupting business as usual. The cloud allows banks and companies to create their own fintechs to test the paradigm shift involved with migrating to the cloud and how they can operate under their technical term in a new space.

Heras highlighted her point: “I see it as a very exciting opportunity to play with it to create with a reduced risk and reduce costs, new propositions for customers. At the end of the day, there is a disconnection between the traditional banking and creating products and offerings focus on very traditional values of banking and now, the new means, open finance, open banking, an ecosystem that has different layers connecting to data and services of banks. You can only play into that ecosystem through the cloud.”

Williams added to Heras’ point in that the cloud opens up a space for engineers to play with new technologies and visualise if what they are making can become something of value.

Remarking on the possibility of legacy banks using their traditional infrastructure while migrating partly onto the cloud, Williams said: “Can you run a hybrid system with legacy and cloud? I think my suspicion is a lot of organisations once they start to go down that road, and they look at the relative productivity that people want. You have got a very agile productive team working on the cloud side of things, and then you have a team on the legacy side and theyare struggling with change, whereas the agile team is racing ahead. Why not put in the effort to get the advantage of the cloud? Once you dipped your toes, why would you not go to all in?”

There is risk involved in the transition to the cloud and institutions with legacy infrastructure are struggling to initiate the push to migrate due to being stuck in their current mindset. However, the benefits of the cloud are evident in the possibilities to scale up at a rapid pace, innovate real-time services, and save costs on data. The panellists concluded that institutions do not need to use an ‘all-or-nothing’ strategy when it comes to the cloud, but it is essential for larger banks to keep up with born-on-the-cloud neobanks and fintechs that are leveraging the cloud to get ahead.

Moving money should be just as easy as moving data

The last two sessions of day one of EBAday returned to the theme of instant payments, with the first of these updating the audience on the status of immediate cross-border payments.

Moderator Javier Santamaría, chair, European Payments Council was accompanied on stage by Katja Lehr, MD, EMEA local payments and commerce solutions, JP Morgan; Rafael Linde, head, international development and global relationship management, Cecabank; Steve Naudé, head of Wise Platform, Wise; Petra Plompen, service development and management, EBA CLEARING; and Simon Wilson, MD, transaction automation, valantic FSA.

Lehr began the discussion by stating that from her perspective, immediate cross-border payments “have made great progress from a technical perspective. We think we have done we have connected in various parts of the world, very well-known and tried clearing and settlement systems across jurisdictions. We've done proof of concepts. We've done pilots on new technology using blockchain to enable cross border international payments.” However, she argued there was still improvements to be made in areas like regulation, especially between countries and data exchange.

Lehr further added that, “we know that the moment we use instant payments, fraud goes up.” Plompen argued: “it's good to have the technology in place. But if it doesn't serve the needs of the users of that infrastructure to enable them to create the solutions for their customers, then we won't achieve what we want to.”

One issue Linde wanted to raise was about FX conversion was that “I think sometimes we pick up the concept of multi-currency with cross currency. Multi-currency should be a solution that allows any currency to be sent from point A to point B whereas cross currency in place that the currency will be converted at some point during the payment chain. And this is tricky.”

According to Wilson, “end users and as clients that I want to look at things in a way that says this is the kind of payment I want to make. They want those payments to be at a level where they're just choosing what service and what cost they want and ultimately, they want a good service at a good price and whatever is applicable and the exact route the exact network exactly why those payments are happening. They don't care about.”

Naudé commented: “there's no reason why moving money isn't as easy as other forms of data. Yes, there's some friction that needs to be in the system around some of the checks and screening and controls. But then the question is, how do you minimise the impact of that? So, if we can perform real time sanction screening on the beneficiary, and is a potential match, we can surface other questions to the customer in the flow immediately.”

The final panel of the day, titled “On the cusp of the instant payments era”, proved to be an exciting forward-looking session for the payments world.

The panel was moderated by Camilla Åkerman, secretary general, Nordic Payments Council and was attended by Luke McAlpine, director of product, payments, Thought Machine; Fredrik Tallqvist, regional representative, Finland and the Baltic countries, EBA CLEARING; Dr Hubertus von Poser, member of the management board, PPI; and Michèle Zaquine, director, head of propositions and commercialisation Europe, Global Payments Solutions, HSBC.

Regarding whether regulation should be the right way to increase usage of instant payments or if it should be market driven, Zaquine stated: “I think that when it's driven by regulation, it really pushes solutions into the into the market within a given framework. And what that does is it allows all actors to transact in a secure and optimal manner.”

McAlpine concurred with this position and said that: “sometimes having a regulatory driven approach and having a little nudge I think can be really useful when it comes to delivering innovation for the end consumer.”

Dr Von Poser also said: “It's very important that we have this regulation because if we look at many initiatives we see at the moment, for example, request to pay or EPI, they're connected or they are relying on instant infrastructure. And that only works when everybody's reachable.”

Looking at some of the risks presented by instant payments, such as fraud, Tallqvist argued that “a key focus we should be looking at is actually using instant where there is value and maybe not go for a mandatory push.”

Looking at what some of the biggest challenges are for instant payments going forward, each commentor gave their perspective. McAlpine stated: “I think it is a technology platform problem. I think consumers will adapt pretty quickly, but I think getting corporates in business as long as there's another challenge.”

Tallquist’s position was to not go “for any more regulation. Let the market run itself. Banks do know what to do and use their resources where they see market potential.”

Dr von Poser argued that one major challenge is a “lack of human resources. So, we should be open as an industry to work together and not everybody has to do everything by themselves. That's also valid for the service providers as much as for the banks.”

Zaquine concluded: “I think it is it's about the different actors coming together. It's about ironing out all the barriers that we see today to actually allow for those instant payments to operate in a safe environment and to actually be used as a default.”

CBDC is coming to Europe, but are we ready for it?

In the final session of the evening in breakout room 2 for EBAday day one, ‘What is the outlook for CBDCs in Europe?’, a panel of experts discussed where CBDCs are heading in Europe and what possibilities could arise for banks, merchants, and consumers in the future.

Moderated by deputy editor of the The Banker, Liz Lumley, speakers included Alessandro Agnoletti, group head of digital currency and DLT at Nexi, Manuel Klein, product manager of blockchain solutions and digital currencies at Deutsche Bank, Emma Landrault, vice president of J.P. Morgan Onyx Coin Systems, Daniel McLean, digital euro and business model lead at European Central Bank, and Gilbert Verdian, founder and CEO of Quant.

When asked about trends emerging in the CBDC sector, Landrault commented that she sees trends in commercial bank tokens and tokenised deposits: “The asset tokenisation ecosystem is growing. We are seeing a growth in the conversation around tokenized deposits and commercial bank tokens, how we can design commercial bank money and central bank money on chain. For the last few years, we have had various iterations of different PoCs for wholesale CBDC, and only now are we seeing Swiss banking Association, German Banking Association, starting to publish consultations on commercial bank deposits. We are starting to see the whole commercial and central bank money come onto this digitised conversation.”

On the development of the digital euro, McLean stated that it is in progress and the Governing Council will soon move on to the next stage of the process and provide a digital framework for the digital euro. “A digital central bank currency is needed. We believe its future, and we believe the central bank needs in addition to the wholesale components, needs to also offer a digital alternative to cash for the future.”

On the benefits of retail CBDCs, McLean said that now is the time to act to provide options to the consumer. He boils the essence of retail CBDCs down to trust, in that users will have multiple options in payments, and the digital currency will be sources from an institution that they can trust.

Verdian described Europe as having a very mature financial system that is at the forefront of innovative global payment systems, therefore primed to lead in CBDCs.

“The ecosystem is ready for the next transformation, for the next generation of money. What we have seen with CBDCs is they are coming. It really comes down to putting logic and programmability at the core of money so that you can automate workflows and solve challenges of fraud in a new way, use innovation from the private sector to create new flows, new journeys, new experiences on retail and wholesale sides,” Verdian remarked. “This leads to a huge efficiency in the financial system and growth through innovation. It leads to better choice to consumers and businesses because they can automate a whole bunch of things that they couldn’t before.”

When polling the audience for how they would use retail CBDCs, the majority response was that they would use it for payment of services, with the second most popular choice being for cross-border payments. In the poll on how useful wholesale CBDCs are, the most common response was that it is not needed as other solutions such as RTGS exist, while equal parts of about 30% believe that it will ease cross-border payments issues and reduce costs.

Commenting on how the infringement on privacy and rights when it comes to data collected when using digital currencies,

Klein remarked that there are processes involved that can increase privacy involved when using digital tokens that are still in the research process. He described tokens that can be transferred digitally and are assigned to numerous public addresses, but the provider would not be able to know who held those tokens or how much they spent. He expands on the developments in an in-built privacy on backend infrastructure within the Eurosystem where the European Central Bank (ECB) would not be able to know the details of users’ transactions:

“One of the advantages of this new technology is to have inbuilt privacy where the ECB cannot know exactly how much money I have for what I spent. Obviously, the intermediaries that provide these accounts are these wallets would have to do image checks and NFC checks. The legislator currently looks into whether this privacy can also be increased up to a certain threshold, especially with the digital bureau, so that you not only have higher privacy against the ECB, as the provider of the ledger, the backend ledger, but also against the intermediary that provides the wallet. I do think there is a possibility to create privacy in a digital central bank, digital currency system.”

On the topic of mass adoption of crypto and CBDCs in everyday life, for example using it to pay for your coffee in the morning, Agnoletti responded that crypto and CBDCs have different purposes:

“They are two different things. Crypto, from what I see today, is based on investment means, and so does not have the same purpose as CBDC. CBDC is expected to be stable by design, integrated into the payment systems by design, and always fungible with another form of central bank money. So I could not associate them together.”

The panellists explored how CBDCs are advancing and becoming more prevalent in the banking industry, however they are still in process of widespread adoption and being trusted by digital wallet users. While there is further research being conducted into CBDCs, there is still a long journey ahead for Europe to fully embrace both wholesale and retail CBDCs.

Collaboration and the future of fraud prevention in PaaS

The second day of EBAday 2023 started off with the hot topic of Payments as a Service (PaaS), and specifically some of the preventative measures which need to be undertaken to secure PaaS against cyber-attacks and fraud.

The session was moderated by Deepa Sinha, VP, payments and financial crime, BAFT. She was joined by Enrico Canna, head of antifraud, Intesa Sanpaolo; Thomas Egner, secretary general, Euro Banking Association; Aravind Narayan, global director, sales strategy and execution, Refinitiv, a LSEG business; and Jenny Winther, head of payment schemes, Svenska Handelsbanken.

Regarding the fraud risks to PaaS, Winther argued that one thing PaaS can do is share the technology and solutions between each other so the industry is prepared for the risks. However, she also argued that this proposes its own set of problems as it may result in each provider behaving the same way, opening everyone up to the same vulnerabilities.

Canna pointed out some of the steps they had been making to improve fraud risks for their customers but also that they have experienced an increase in the sophistication of attacks and in turn, an increase in the number of scams.

Narayan added to this sentiment, stating that, “if you don’t have the right guardrails in place then fraudsters are basically waiting for an opportunity to get in and I think PaaS has probably given that opportunity. PaaS does have controls in place, but the attack vectors have gone up. That’s something we need to be mindful of.”

Sinha asked what measures can be brought in through cyber security to help defend against these attacks. Winther responded that the key is “collaboration. We need broader collaboration. Private and public collaboration. Authorities and financial market players working together.”

On this point of collaboration, Egner emphasised the importance of having standardised language about the issues of fraud and cyber security, he used of the example of phishing and smishing, where often there were different company-specific definitions for these. The aim here is to create unified attack vectors.

Preparing for the new European legislative landscape

The role of the legislation is a core part of any EBAday, and this was not missing from EBAday 2023. A session on the second day of the event aimed at highting how to prepare for the European legislative landscape of the instant payments regulation and the upcoming Digital Operational Resilience Act (DORA).

This session was moderated by Maria Adele Di Comite, research director at IDC Financial Insights. Also appearing on the panel were Daniele Astarita, principal solution consultant, ACI; Niklas Lemberg, head of payment industry, Nordea; Laura McDermott, head of SEPA product, NatWest Group; and Bridget Meijer, new markets manager, SurePay.

McDermott discussed that most banks have digital transformation and adapting technology for instant payments is part of most bank technology. Looking at what is actually changing, McDermott commented that: “the legislation that we expected has gone further than we expected. It has looked to make instant payments mandatory for anyone who provides SEPA payments.” She went on to describe that the legislation looked to make instant payments as affordable as possible, as well as addressing some of the friction concerns.

Meijer agreed that Confirmation of Payee was an important aspect in the context of fraud and gaining the user's trust of their payments. She used the example of name check, which she reported was introduced to the Netherlands in 2016 and resulted in an immediate lowering domestic and cross-border fraud. She concluded that: “fraudsters will always find ways to commit fraud, so that’s why it’s important one system in Europe, one consistent messaging so that customers can trust what they see on their screen and trust instant payments.”

Lamberg began by making the case for pre-validating payments so that this lessens the amount of fraud and also lowers the amount of friction within payments. However, he raised concerns about the expectations in the proposed legislation for non-Euro countries to be able to meet the same level of instant payments as Euro countries when they are dealing with additional hurdles.

Yet he noted that there is, “a lot of coordination going on.”

Asrarita commented that from a customer centricity perspective, “we will be surprised by the proliferation of use cases and the increased volumes we will be witnessing.” He argued that customers are likely to be welcome the security which is provided through proper instant payments.

Banks are seeking new approaches to level up sustainable strategies

In the panel ‘Sustainable finance: Assessing shades of green across payments and banking’, hosted by Finextra’s own Madhvi Mavadiya, speakers explored how the European banking landscape is adopting sustainable strategies.

Panelists included Ines Alonso Rodriguez, executive director of Advisory GTB Global at BBVA, Andrea Giuliani, head of payment solutions at NTT Data Italia, Stephen King, vice president of sustainability solutions at Visa, and Ainsley Ward, vice president of payments solutions at CGI.

King opened the conversation by saying that sustainability is an economic and industrial shift, significant in size and speed, meaning that there will be plenty of opportunities for disruption. He added that the consumers are trying to express their values for how they shop at an increasing rate, and companies are facing regulation or an opportunity to differentiate themselves in the public eye.

Ward mentioned that surveys conducted by CGI found that banks list sustainability as a top priority, but it should have been a priority a decade ago as well. The quicker institutions move on initiatives and make the change, the easier it will be to put the brake on global climate issues, however gathering data and reporting correctly is also an issue in the banking space.

On the regulations that banks and organisations are currently facing, Ward comments on how there is multiple layers of regulation: “There has been a lot of local regulation over the years because we have different problems in different areas of Europe. We have a certification is going on in Spain, we have large amounts of water where I am in Scotland, we have to deal with large amounts of wind and we are looking to turn that into electricity. What is coming next are a number of pieces. If you look at the DORA, which is the resiliency regulation, and CSRD which is environmental reporting regulation, things are about to get interesting. We are in that phase where we will transition from regulation and taking over from just best practice and third party certifications.”

There are both innovation and revenue opportunities when it comes to engaging in sustainable practice; if companies do not embed sustainability into their operations there will be significant cost involved.

King pointed out that sustainable items are often more expensive as they are longer lasting and better quality, but reiterated Giuliani’s point that sustainable products must be inclusive and available to all institutions.

Ward posited that sustainability does not need to cost more money, and that it can go hand in hand with modernisation. As an example, he cited that work from home and hybrid working environments that have become more popular amongst companies post-pandemic demonstrates how businesses can modernise and cut emissions.

Commenting on the role of a system integrator, Giuliani outlined the two ways that NTT Data is working towards sustainability: “We are going in two different directions. The first one is sustainability of IT, and the second one is sustainability by doing IT. In the first one we redesign IT services to be as sustainable as possible, and in the second we act on how sustainability can support and accelerate customer experience. If you think back to two to three years ago, payments and sustainability were two different topics, and what we are seeing today is that the payments and sustainability have an overlap.”

Giuliani highlighted main points for implementing and integrating sustainability on all fronts: to focus on measuring data accurately and regularly, to universally standardise regulation, and to ensure sustainable products are accessible to all organisations.

King emphasised the need for sustainable choice in payments systems: “Most of what we hear on the customer side in particular, is the lack of sustained choice. Where can they exhibit sustainability, what can they do, and where do they navigate to get that? Services are popping up such as climate friendly pledge marketplaces, ratings on certain travel sites, but they are searching and seeking trustworthy people to help them navigate because it's not easy. Again, it's not to say for everyone either, but for the ones that are seeking that, how can they find a trusted source to help them navigate to the decisions that are made in things like how they're living, how they move, how they eat, and everything else they buy?”

Rodriguez outlined the differences between scope emissions: Scope 1 emissions are what the companies control, Scope 2 emissions is from electricity purchases, and Scope 3 are indirect emissions caused by stakeholders such as clients, employees, and suppliers. To achieve Net Zero, all scopes must be taken account of, but the problem lies in that many companies do not have all three scopes included in their reporting and data measurements and therefore are not in their sustainability agendas.

She added: “Companies are worried about compliance sustainability targets for which they need the collaboration of the rest of stakeholders. Those sustainable assignments has shifted sustainability into climate change and the reduction and measurement of Scope 3 emissions, because companies need to control the value chain in order to comply with regulations and the reporting requirements.”

Rodriguez mentioned that there is a butterfly effect that takes place once financial institutions enact sustainability practices, that it leads their stakeholders to do the same and create a sustainable ecosystem.

Ward closed by noting the mindset towards sustainability in the banking sector: “We are in the business is towards economics and risk management, so we have to talk in that language from the perspective of sustainability. We have to transform the way that we are doing business cases so we always make these considerations. We have to show our internal organisation how to be advocates for sustainable practices in everything that our organisation. At CGI we are hoping to take our partners on that same journey and we are doing it in a way that they understand profitability is not necessarily impacted by taking a sustainable route. You can do things that are smart and good for the environment, and you can make money at the same time. We have to do this with an eye for profitability, but sustainability at the heart.”

Overall, the panellists explored how financial institutions are prioritising sustainable initiatives and what strategies they are employing to become greener in future years. They concluded that sustainability is and should be a top priority within every aspects of an institution, and that it provides a big opportunity for advancement. The journey towards Net Zero and becoming sustainable institutions will be long and not without obstacles, but is essential for companies to undergo. The session advised financial institutions start small with sustainable actions and then grow their practices as they progress into more environmentally friendly institutions.

Liquidity management is a balancing act that can be improved by instant payments

The penultimate session of EBAday 2023 covered the myriad of challenges currently being faced in liquidity management. The impact of regional conflicts and subsequent sanctions, as well as supply chain issues, have made the future volatile.

Bonni Brodsky, managing consultant at Lipis Advisors. She was joined on stage by Koral Araskin, head of Liquidity Solutions, Institutional Cash Management, Deutsche Bank; Joshua Cohen, co-head of Liquidity and Corporate Treasury Solutions, iGTB; Peter Dehaan, global head of Business Development for TLM Cash & Liquidity Management, SmartStream; Frank Dux, managing director, CoCoNet; and Martijn Stoker, head of Liquidity and Account Solutions, J.P. Morgan Payments.

Araskin started by offering a positive perspective that despite the problems being faced in liquidity management, there is in increase in the amount of overall investment. He later raised concerns about the role which instant payments will play on liquidity management for treasurers. He argued that in a scenario where payments are all instant, treasurers have less time to play with and this may trigger “buffer costs” which have not been accounted for in instant payments.

Stoker noted three key trends: the first that is in the context of the macroeconomic framework of increasing inflation and rates, what are central banks going to do more for tightening liquidity and what will be the impact on the business environment; the second is around technology and how it is changing the way clients operate. This is impacting how banks operate and changing the expertise they can provide to clients; third is about changing business models impacting the way liquidity management needs to be dealt with. He argued that in the past the model was a business to business model, then a business to consumer model, and now is moving to a consume to consumer model.

Dehaan stated that the future of liquidity management is about accurate real time data. He argued that banks are naturally driven by metrics and ratios, for example budget deposit ratio or liquidity coverage ratio. He argued for better controls of data and having the technology to make data more visible.

Dux brought back the topic of instant payments offering two use cases in the liquidity management context: the first is cash pooling, which he argued offered complete control over pooling and multibank pulling; the second is about timed instant payments, which allows more control over the timing of payments, for example salary payments to go out on a Friday and employees to receive them that day.

Cohen countered Dux’s perspective, arguing that there is the need for real time payments from the liquidity management perspective, but not so much from the corporate side. Later in the panel Cohen discussed AI Cash forecasting. He argued that current models are not able model more than a few days in advance because of insufficient data, but the pattern identification that is offered by AI may be able to advance these predictions, although he emphasised that these AIs are not yet ready.

The rise of Banking-as-a-service

The final session of EBAday 2023 covered the rise of Banking-as-a-service (BaaS). The PANEL looked at the benefits of BaaS and Payment-as-a-service (PaaS) for financial institutions and whether it will increase efficiency, or diversify revenue.

Patricia Hines, CTP, head of corporate banking and payments, Celent, acted as moderator for this session, alongside panellists Fabrice Denèle, payments partnerships, BPCE Digital & Payments; Fernando Lardies, general manager, PagoNxt Trade (a Santander company); Bruno Mellado, global cash management and global head of payments and receivables, BNP Paribas; and Justin Silsbury, lead product manager for Cash Management, Infosys Finacle.

Denèle first discussed what they have done in BaaS in the last year. He stated that PSD1 and PSD2 completely changed the banking landscape and took the monopoly of payments away from banks. In light of this, they invested in their capabilities and have leveraged that to package their own capabilities as an offer on the marketplace.

Looking to the future of BaaS, Lardies argued that the closer you get to retail and individuals, the quicker the changes happen. He argued that the big change has been in smaller value payments and retail, and companies are looking for partners for these payments. He stated that the further you go into the corporate world, the less you will see the evolving business models and the need for BaaS partners.

Mellado argued that the first level of BaaS is providing banking services and some of the “harder” parts of banking to smaller players who do not have the capability to do this themselves. The second level, he noted, was at the corporate level, where he argued that they will need to do in house banking setups. The third level is banks, who he argued will eventually need to make the decision over whether they are going to keep providing banking services themselves or seek an outside partner.

Silsbury argued that banks are now all feeling the need to move into this space and partner with these providers in order to provide the full range of solutions to their clients. He further argued that BaaS offers the opportunity to reach the unbanked people by working with non-banking institutions to reach people who might not be able to easily access a bank.

Payments trends to watch out for in 2024

EBAday, the premier event for industry professionals across transaction banking and payments covers all aspects of the sector, in degrees of depth unseen at other conferences. The second day of the event saw senior executives listen in to sessions on instant payments, correspondent banking, regulation, innovation, Payments as a Service (PaaS) and models for public and private sector collaboration. Here’s a roundup of the most discussed themes and what to expect in 2024.

Instant payments

Tackling the long-discussed, yet to be achieved goal of instant payments in Europe and across the globe, Vincent Brennan, senior advisor of banking and payments, Accenture led a panel on this topic which included Carmen Dengra, SCIB customer success officer, PagoNxt Payments (a Santander company); Annie Gilchrist, product director, Currencycloud; Uwe Klatt, CEO, GEVA Group; Isabel Schmidt, co-head of payments products, treasury services, BNY Mellon; and David Watson, President and CEO, The Clearing House.

In this session, it was evident that all participants across the banking ecosystem are prioritising the end user and the speed and transparency that instant payments delivers will benefit the end customer most of all. For this to be offered in an efficient manner, the panelists agreed that this will require cooperation from the treasury department and infrastructure is designed in such a way that it will meet the needs of all those in the market.

Furthermore, the purpose of making a payment must be clear – to get internal departments on board and for an infrastructure to be designed that is fit for the purpose. The panelists explored the questions that must be asked, such as: what problem are we trying to solve for our clients? Why is the client moving the money? Is it the result of something else? It is also of importance to make the distinction between the needs of retail, consumer-based use cases and the corporate use cases, as the answers to these questions will be different for each case.

As an industry, when it comes to instant payments, the panelists agreed that we are more familiar with consumer-related use cases because the B2C sector rarely interacts directly with their clients. At the same time, in 2024, the industry will need to acknowledge that transparency is key and while there is a lot of innovation happening, we must always question what the problem we are trying to solve is.

A discussion was also had on remittances. For instance, if an employee can work a shift and receive payment instantaneously, if cross-border, real-time payments were as sufficiently connected, we could end up with a situation where workers can get paid and their funds are deposited into the account of a family member in another country on the other side of the world, instantaneously. However, this use case does not get as much voice and attention as a large corporate demanding to move their supply chain.

Correspondent banking

Another topic that has been discussed for many years, but issues continue to permeate and need to be addressed is correspondent banking. While international correspondent banks face increasing costs and compliance burdens, correspondent could risk losing relevance.

Susana Delgado, global head of consumer & SME payments strategy, Swift led a discussion on this threat and welcomed Dayana Borrero, head of institutional cash management and trade sales & client management – Iberia, Deutsche Bank; Danny Butvinik, chief data scientist, NICE Actimize; Raquel Galan Martinez, senior sales and relationship manager – global trade and international banking, BBVA; Simon McConnell, EMEA head of clearing and FI payments, treasury and trade solutions, Citi; and Jose Maria Seisdedos, institutional banking – Southern Europe, Banking Circle.

While some may consider correspondent banking as a failure, others are looking to new technologies such as distributed ledgers, blockchain and cryptocurrency to ensure that payment market infrastructures in different geographies can interact with each other, without the industry turning to the likes of central bank digital currencies (CBDCs) to fill the gap.

The panelists explored some of the challenges with correspondent banking and reiterated that in 2024, practices around the Swift network must become seamless. Now, connectivity may be being improved at home and in certain areas, but it is not being done so to a fuller extent. Looking at the client experience, players might be driving innovation, but this is also not ubiquitous.

Financial market infrastructures (FMIs), which allow the clearing, settlement, and recording of financial transactions can enable millions of transactions to take place each day. This is a major step forward for operating 24/7 and therefore, a huge opportunity for implementation and software providers to support financial institutions with delivering across borders.

Empowering payments with regulation and customer-centric innovation

Taking stock of discussions over the two days, Sulabh Agarwal, managing director and global head of payments, Accenture welcomed to the stage David Janas, global head of clearing and FI payments, treasury and trade solutions, Citi; Fanny Solano, head of digital and retail regulation, transparency and implementation management, Caixabank; and David Malley, payment schemes and regulatory lead, NatWest Group to participate in a strategic roundtable.

Citing the catalyst for the instigation of change within the financial services industry, the panel agreed that new technologies have driven a shift from safety, soundness, and customer protection to prioritising the cost, transparency, and speed. Doubling down on the conversation of cost, the panel highlighted that executives must consider both the fees associated with the transaction and the effect of the fees.

Today, and in the future, clients will require more choice when sending cross-border payments, and therefore, new channels that are emerging must be regulated and there must be enough upfront transparency when it comes to fees. The bottom line is that clients would like to be able to deliver payments to the beneficiary when the beneficiary needs it, and that should be made possible in 2024.

Further to this, if cost, transparency, and speed is not provided by financial institutions, then they will lose market share, which is quite significant in the regulator’s view because of the network effect that exists within the ecosystem. Just because one bank resolves an issue, it does not mean it is resolved for everyone, and this has got regulators thinking about revising standards such as PSD2, implementing ISO20022 and considering BNPL guidelines.

Payments as a Service strategies

Daniel Hellmann, director, payments, Deloitte led a discussion on the benefits and risks related to implementing a PaaS approach, as well as the strategic enablers that are required to individualise the payments experience.

He was joined by Sara Berujon, executive director, country product head for JP Morgan SE, Luxembourg branch, JP Morgan; Clara Garcia Benedito, head of global solutions and business development for commercial and corporate banking, BBVA; Mario Mendia, senior vice president international markets, TAS; and Andrea Pennacchia, head of banking & PA solutions, Nexi.

The panel kicked off the session by questioning whether what banks have historically provided could be regarded as PaaS; serving payments to all profiles, whether those clients are fintechs or smaller banks, they are also PaaS providers. The goal for all financial institutions is to service their clients so that they can service their own clients, offering them a single gateway or a single point of entry.

There are also many models of PaaS which can be used to evolve the management of existing payment infrastructure as well as evolving the offering that banks are providing. Global transaction banks will continue to dominate the market, but the reality is that the market is changing.

Models for public and private sector collaboration

Gareth Wilson, executive vice president, head of UK banking and capital markets, Capgemini led the final discussion of the day and explored how commercial banks, other PSPs and central banks can improve global reach and interoperability for payments. He welcome David Cunningham, global head of strategy and partnerships for digital assets, Citi; Dirk Schrade, permanent representative of the head of the central department payment transactions and settlement system, Deutsche Bundesbank; Alan Verschoyle-King, head of business development, EMEA, RTGS.global; and Tarik Zerkti, CEO, PRETA.

Cooperation was a word that became prevalent across both days of the event, and during this session, the panel discussed how closer collaboration between the private and public sector can drive increased interoperability, greater transparency, and secure global reach. In order to achieve this, it also requires partnering with regulators to ensure that when new technologies such as digital assets come to the fore, legacy banks must incorporate truly, digital 24/7 capabilities. Whether or not digital assets are digital liabilities, it remains to be seen.

Closing the show, Debi Bell sat down with Thomas Egner, secretary general, Euro Banking Association; Wolfgang Ehrmann, chairman, Euro Banking Association; and Jose Vicente, deputy manager, Banco Comercial Portugues to talk through the key themes explored at EBAday 2023. They also revealed that EBAday 2024 would be taking place on the 18th and 19th June in Lisbon, Portugal.