Chris Mager, Head of Global Innovation within Treasury Services’ Global Product Management group, and co-author of BNY Mellon’s new fintech research paper, “Reinventing Payments In an Era of Modernization,” brought a BNY Mellon perspective on innovation to the “How can technology help in treasury strategy?” session at Sibos on Wednesday, September 28.
Commenting on the evolving payments landscape, Mager says: “We are on the cusp of great change. Like never before, a confluence of market forces – including rapid technological developments, the competitive threat from fintechs, globalization, heightened regulatory and compliance requirements, and the millennials-driven rise in consumer expectations related to all things digital – is fuelling the need for a new payments ecosystem that meets modern day demands."
"Undoubtedly, this is a call to arms for banks. As this and other sessions here at Sibos this week are making clear, banks are ready to take up the challenge, and ultimately help to deliver a real-time global payments experience for clients."
"It's clear to all of us in the industry that meeting the challenges we face will require unprecedented levels of collaboration," Mager said, adding that increasingly, banks are teaming up with other banks, as well as fintechs, in efforts to leverage new technology capabilities and bring about transaction enhancements.
"Blockchain, of course, is a particular area of interest in this respect, though it is still in early stages of development. The SWIFT global payments innovation (gpi) initiative is already undergoing its first pilot phase – in which BNY Mellon is actively involved – and in the U.S., The Clearing House's Real Time Payments system, an initiative in which we're actively engaged as one of the pilot banks, is slated to debut in 2017. This is a collaborative effort by the 24 owner banks of The Clearing House," Mager said.
“Such substantial investment into new payments infrastructures can be a huge challenge for many banks however,” explains Mager, “and it is here that the value of local-global bank partnerships can really come into effect."
Mager noted that through correspondent and client banking relationships, smaller banks can capitalize on the technology capabilities of their global partners to provide their clients with enhanced solutions. For example, BNY Mellon has developed a ground-breaking, one-stop-shop digital ecosystem – NEXEN – integrating solutions and data from BNY Mellon, clients and select third-parties (including fintechs), which clients can access through NEXEN’s digital portal or electronically via APIs. NEXEN, with its API and App stores, provides a gateway to BNY Mellon's services and information, for both corporate and bank client relationships.
"The extent of the technology transformation taking place in the transaction space is astonishing, and banks need to ensure they are positioned to embrace change, drive forward modernization – and ensure clients receive an optimized payments experience fit for the digital era,” Mager says.