futurePayments 2020 trends and strategies

2020 is set to be another transformational year in the payments industry. Regulatory and innovation-driven trends set in motion in the 2010s, such as real-time/instant payments, open banking and ISO 20022 migration, willbecome the de ning themes of the 2020s.

Global, regional and domestic payments infrastructures will experience drastic overhauls in the coming years, as market participants race to connect and transact with greater speed, data transparency, and interoperability.

In each area it identi es the major trends that will continue to foster developmentand innovation throughout the decade. It also outlines how, with strategic thinkingand the right technology choices, nancial institutions of all sizes can navigatethese pressures and stay ahead of regulators and competitors.

As we look at the trends considered in this impact study, some common themes emerge.

One is that compliance and innovation must always be taken together. While sometimes necessary to avoid regulatory penalties, short-term solutions rarelydeliver long-term bene ts. Better to build capabilities for innovation and value-added-service provision directly into the compliance programme, to improve competitive positioning and market share.

Another is that when seemingly disconnected trends are looked at holistically,
new ef ciency opportunities emerge. For example, since most new instantpayment networks are ISO 20022 based, it makes sense to combine ISO 20022modernization with real-time enablement. Similarly, the power of open banking can best be unleashed when combined with faster payments and richer data owingthrough APIs.

Finally, whatever the initiative, it is clear that legacy systems cannot by themselves deliver the needed results. New technology choices must come into play: microservices based, real-time enabled, open banking and API ready, ISO 20022uent, and ready to run in the cloud as a service. Only then will the seeds ofchange have sown in the last decade bear fruit in this one.