Bringing industry leaders together for a strategic roundtable on ‘The future is now! How do we best employ technology and infrastructure in transaction banking and payments?’, Sulabh Agarwal, global head of payments, Accenture made history with Sara Castelhano, managing director, EMEA payments and commerce solutions, JP Morgan and Kerstin Montiegel, managing director, global head of client connectivity, corporate bank, Deutsche Bank in the first women-only keynote panel at EBAday.

Kicking off the session, Agarwal highlighted the substantial changes that have occurred to customer propositions across wallets and currencies. Further to this, he stated that trust has become increasingly important regarding technologies such as the cloud and new developments in the cryptocurrency, CBDC and metaverse space.

A poll revealed that 71% of the EBAday audience believe that the future of payments is still to come, while 29% think we’re there already. According to Montiegel, technology is now a “must have,” but also mentioned that there are environmental, social and governance (ESG) considerations that must be made. Castelhano agreed that ESG is important, but we must also consider the speed at which the payments industry is changing.

“10 years ago, the quickest way to move money was to fly it on a plane. Last year, real time payments moved cross border. Future strategies for the metaverse and similar topics are moving quickly,” Castelhano said. She went on to say that this shift is occurring faster than every before because the consumer wants more connectivity, but due to everything not being embedded, the customer is currently getting a clunky service.

Using the metaverse as an example, she mentioned that while you’re able to play games and order food at the same time, because of PSD2 and SCA, you still have to move from your computer to your phone to authenticate. However, with all these new technologies coming to the fore, Agarwal questioned where banks should place their budgets, particularly to leverage the full benefits of SEPA, SEPA Instant and ISO 20022. Over time, budgets have “pretty much been made up of mandatory programmes and activities. Moving to the future is very different and the correct foundational building blocks must be established.”

Castelhano added that with ISO 20022, the payments industry finally has a common language and although bank budgets were focused on obtaining enriched data with the standard and adhering to regulation, the future is in structured data that machines can read. With machine learning, those working in operations can go from asking the remitter for information to adding value, in turn, speeding up transactions.

Alongside this, PSD2 has allowed everyone to build APIs, but there are no API standards which has left the industry disjointed. With multiple bank formats, APIs need to be driving more standards for successful future ecosystems. In Montiegel’s view, ISO 20022 has resulted in better reconciliation, better fraud monitoring and agreed that with standardisation, ecosystems can evolve through the use of technology, alignment of workflows and the leveraging of data. “We have spent a lot of our budget on regulation, but it has enabled real-time.”

Agrawal summarised these thoughts: “Payments and technology go hand in hand. Payments is the enabler and technology is the differentiator. While payments is like the salt in food, it has to be there and it makes it work. At the same time, technology has allowed fintech firms and scaleups to move to the next level.”

The digital shift is real and customer demand is fuelling this. Castelhano surmised that although there has been a reduction in cash and a reduction in cheques, everything is embedded and there is a future in micro, invisible small transactions. There is also a need to invest in stability and scale. Montiegel continued to say that the old must be combined with the new.

A second audience poll during the session revealed that a staggering 91% do not think that in five years, 50% of transactions will be in stablecoins, cryptocurrencies and CBDCs. Rohit Talwar, author, foresight researcher and CEO, Fast Future also took to the stage for the long-awaited in person challenge speech on ‘Metaverses, digital currencies and payments’.

“We are living in a world where everything is being monetised and tokenised. […] The world is also being challenged in how we do things differently, take risk and opportunities.” Talwar also said that we must not let anyone let you that one particular trend will be the future, as “the future is not yet decided.”

Returning to the topic of sustainability, he added that we cannot quantify everything about the planet and in turn, we cannot calculate the impact financially. Further, “the ideas are not being created by the people in this room, they are being created by 18 – 25-year-olds.”