Treasury and Payments
Three megatrends disrupting the cross-border payments landscape
Three emerging megatrends across payments, technology and risk will disrupt the cross-border payments landscape and create new opportunities. To remain competitive, financial institutions must deliver faster, cost-effective and more secure cross-border payments to their clients. Here are the implications of these trends and the opportunities to consider.
Megatrend #1: New payments
New payment methods present more cost-effective and faster solutions, and they are becoming more common. Fintechs, digital banks, big tech, payment service providers (PSPs), card networks, close-looped networks and other non-traditional players are helping drive growth in cross-border transactions that are expected to reach nearly $156 trillion in total payment flows.1
The opportunity:
- PayDirect is a solution to support our clients with a better retail customer experience for cross-border payments, crediting in local currency—including faster settlement, greater transparency and lower cost
- Coin Systems2 can serve as a payment rail that provides a domestic network with multicurrency clearing capabilities
Kiat-Seng Lim, Global Head of FIG Sales, J.P. Morgan
Megatrend #2: New tech
New innovations continue to improve cross-border payment processes—creating more visibility, transparency and efficiency. Financial institutions should prioritize purposeful innovation by adopting the right technology and establishing the right partnerships to meet customers’ expectations.
APIs
Artificial Intelligence (AI)
Blockchain
Big data
Cloud
Provides an agile and flexible digital infrastructure that enables businesses to keep pace with the change of innovation—like decreasing costs and time-to-market for new solutions.
Offers financial institutions the flexibility, transparency and control over the integration of data, empowering their clients to connect in their preferred channels and accessing information (e.g., real-time FX rates).
Improves operational efficiency by automating manual, labor-intensive tasks like populating or correcting information found in select SWIFT message fields.
Reduces manual intervention in payment processing and enhances straight-through processing (STP) rates,3 while also mitigating fraud.
Increases speed and reduces transactional costs in cross-border payments, enabling seamless, transparent and secure information exchange.
Improves financial inclusion as companies use the technology to develop new products and tailored solutions for their clients.
Identifies new efficiencies across businesses, helps develop new products and services, and mitigates fraud.
Offers tailored solutions based on a data analysis of critical information like remittance flows and disposable incomes.
Creates a secure cross-border payments ecosystem that streamlines transactions for faster, more transparent payments.4
The opportunity
- Liink, a peer-to-peer blockchain-based network with more than 400 global banks,5 connects banks and enables faster information exchange that can help validate account ownership and status before making cross-border payments
- Intraday Insight is a Liink application that helps treasurers optimize their intraday flows and deploy available cash efficiently
- API developer tools can help financial institutions create seamless connected experiences with greater flexibility, transparency and control over data integration
Peter Zotos, Global Head Clearing Product Solutions Specialists, J.P. Morgan
Megatrend #3: New risks
New risks will rise—including cybersecurity and fraud—as the industry continues to innovate. Multiple players, jurisdictions, systems and regulations make cross-border payments complex in nature. Fraudsters will continue to innovate and develop new sophisticated schemes to take advantage of this system.
The opportunity:
- Wire Positive Pay is a configurable solution that systematically implements clients’ parameters to release, cancel or inquire on payments that meet client criteria
- Confirm, a Liink application, enables businesses to validate account status and account name before sending a payment—creating greater transparency and a seamless end-to-end experience
Gayathri Vasudev, Head of Global Clearing Product Management, J.P. Morgan
Connect with your J.P. Morgan representative to leverage our digital innovations and unmatched scale in cross-border payments for your clients.
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