Highlights from Fintech Week London Event
In the bustling city of London, over 1,000 decision makers from the global fintech space gathered for Fintech Week London, with a focus on payments. One of the key discussions that unfolded was the international payments panel, which delved into cross-border perspectives and the future of this essential financial service.
The panel, which included Stephen Oluwatobi, Operations Lead at Kora, Elizabeth Lumley from The Banker, Breno Maximiano, Head of Strategy at Gnosis Pay, Niyati Joshi, Head of Product at B4B Payments, and Luke Stubbs, Partner at Shoosmiths, explored various aspects of cross-border payments and the strategies that businesses can employ to improve opportunities in this area.
A significant challenge that was highlighted is the lack of core payments infrastructure in many countries, particularly local clearing systems. This gap requires further investment to establish a solid foundation for better cross-border payments. The possibility of multiple cross-border payments initiatives leading to fragmentation in the system or the emergence of a single leader was also raised.
Regulation to improve cross-border payments will continue at a slow and steady pace due to factors such as political instability and a focus on financial crime. However, the panelists emphasized the importance of aligning with global regulatory requirements focused on security, data privacy, and compliance.
One of the key elements for improvement is technical, regulatory, and usage interoperability. This involves coordinating among multiple stakeholders, including central banks, regulators, and financial providers, to enable quick, affordable, and seamless cross-border transactions across any payment network. End-to-end interoperable platforms provide a single integrated gateway that simplifies onboarding, accelerates reconciliations, reduces operational costs, and enables data sharing to scale payment ecosystems economically.
Leveraging standards like ISO 20022, a structured data exchange format, facilitates automation in compliance, fraud detection, and reconciliation, thereby improving communication and compatibility between global payment networks. Digital identity integration, using interoperable digital public infrastructures that combine fast payments with portable, verifiable digital IDs, helps streamline onboarding and reduce fraud, enabling users to access multiple services securely with a single credential.
Innovative technologies like Chainlink’s Cross-Chain Interoperability Protocol and digital assets like XRP can bridge traditional banking with blockchain to enable faster, cheaper cross-border settlements while maintaining regulatory compliance. However, it was noted that blockchain's implementation requires interoperability with local rails.
The panel also discussed the challenges in removing friction within a regulatory landscape protecting data sovereignty when it comes to digital IDs. The potential for AI was discussed, but the conversation felt more practical than hype-led.
In Africa, market-led solutions such as mobile money transfer service M-PESA have been created due to different country requirements hindering collaborative regulatory progress. Orchestration will remain a significant challenge as users seek choice in cross-border payments solutions.
Brazil's Pix, an example of a country implementing successful solutions for local clearing systems, underscores the need for these solutions to be tailored based on the region. The G20 Roadmap for Enhancing Cross-Border Payments, while promoting infrastructure development, has not been a driving force for financial inclusion everywhere.
In conclusion, businesses should focus on holistic interoperability that addresses both the technical infrastructure and regulatory compliance frameworks to unlock efficient, inclusive, and secure cross-border payment capabilities. This approach not only reduces costs and delays but also expands access to international markets for small and medium enterprises.
The panel at Fintech Week London discussed the need for further investment in core payments infrastructure in many countries to establish a solid foundation for better cross-border payments. This includes addressing the lack of local clearing systems, a significant challenge that was highlighted.
Leveraging standards like ISO 20022 and innovative technologies such as Chainlink’s Cross-Chain Interoperability Protocol can help bridge traditional banking with blockchain, enabling faster, cheaper cross-border settlements while maintaining regulatory compliance. However, it was noted that blockchain's implementation requires interoperability with local rails, suggesting that each region's solutions should be tailored based on its specific needs.
