Working together
02 April 2025
The payments industry plays a pivotal role in asset servicing, but there remain serious challenges — including money laundering — to overcome
Image: yingyaipumi/stock.adobe.com
As instant and shorter settlement cycles continue to dominate discourse in asset servicing, the payments space is growing both in scale and importance.
With this increased pressure comes a greater need to advance and innovate solutions that can keep pace with the ever-changing industry. Yet, several challenges remain and the industry is now searching to modernise its practices.
At the click of a finger
Evolving the payments space to help tackle some of the overarching challenges in the industry is paramount, and Bana Akkad Azhari, head of BNY Treasury Services for EMEA, believes that a few steps need to be taken to get there.
“Modernising the payments space requires a shift toward greater standardisation, automation, and transparency, and ISO 20022 is playing a central role in this transformation,” she says.
“While banks may initially question the return on investment, the benefits of ISO 20022 will become more evident as adoption expands. Ultimately, standardisation and automation are key to making global payments faster, safer, and more transparent.”
Likewise, Will Marwick, CEO of IFX Payments, wants greater efficiency and speed. He explains: “If I could click my fingers, I think the interconnectivity of real-time payment systems is what we would want to be able to achieve.”
However, Marwick understands that this is not a simple issue and, as has always been the case with cross-border payments, political complexities can prove to be a large obstacle. “The challenge is more than just technical, it’s political,” he says. “It’s all about cash and who holds what in any jurisdiction. It is not the easiest problem to solve, and it is something that maybe we will never, ever solve, but it is one that I think we can go a long way to improving.”
Jim Conning, banking and alliances director at AccessPay, adds that technological overhaul may not be the way forward. He claims that “we mustn’t innovate for innovation’s sake.
“Where we have trusted payment rails, we can improve those through innovation, but not completely change them because they’re trusted by the community, by both organisations and consumers alike.”
He does point to how AI can be utilised in a more effective manner that will allow for auto-reconciliation which means, “as trust builds in these systems, the manual reconciliation workload could dramatically decrease.”
These arguments are juxtaposed by Steve Marshall, director for advisory services at Finscan. He insists: “Financial institutions, fintechs, and other organisations need a future-proof compliance solution to help them secure transactions, reduce risks, and maintain regulatory compliance — at real-time speeds.”
Marshall believes that the current systems are outdated and are in urgent need of revamping if they are to defend against the biggest challenge the payments space faces — money laundering.
Being smarter
“Traditional anti-money laundering compliance systems were built for slower settlement cycles and much less payments data, so they struggle to keep pace with real-time transaction processing,” Marshall says. “They aren’t built for real-time transactions or complex workflows, requiring more data points to screen against.”
He continues to state that “as financial transactions speed up, so does the potential for financial crime — money laundering, sanctions violations, and fraud.
“With geopolitical instability and rising sanctions activity, organisations must continuously update sanctions lists and customise watchlists for different jurisdictions. False positives remain a significant challenge. Smarter, risk-based screening approaches are essential to maintaining speed without compromising risk management and compliance.”
As per IFX Payments’ Marwick, “money laundering will always be the main thing that I think keeps people in payments up at night.”
But he believes the key to countering this is by the industry working together and through the process of standardisation.
“I think firms can be looking at a whole host of things. From a swift messaging perspective, you’ve got ISO standards being introduced and the additional data is going to be hugely important,” he explains. “The introduction of not just rules based systems, but also behavioral systems — tracking IP addresses, tracking how users use their mouse — making sure that this is the same person, will go a long way.”
Marwick points to how criminals and bad actors will be using their own AI tools to beat financial institutions and their systems — so the institutions must also use the best technology to bolster their defences.
Above all, however, he says that “the industry has an obligation to work together. We’re all in healthy competition with one another, but we also have a community and an industry to protect. I think the only way we can combat money laundering trends is by working together.”
Automation fixation
One thing is clear, members of the industry are adamant that eliminating manual processes is key to taking payments to the next level. Marwick explains that “the reality is every firm across the whole industry will have manual processes that are still operating in the background. How can you truly scale that in terms of digital infrastructure to be operationally resilient from cybersecurity through to growth and scalability?”
BNY’s Akkad Azhari a suggests that manual interventions are costing the industry dearly. She explains: “While straight-through processing is possible for the vast majority, about five per cent of cross-border payments encounter some friction before they reach their destination, resulting in manual interventions that cost the industry upwards of US$2 billion per year.
“When a payment exception occurs — for reasons such as incorrect payee details or missing information — this can cause frustration for the payer and payee. That frustration may also be exacerbated by how complex and cumbersome payment investigations can be, resulting in additional costs and substantial delays.”
Akkad Azhari continues to add that many banks are acting “merely as middlemen” by performing message forwarding tasks. She argues that this creates additional work and takes up time that could be spent elsewhere.
Martin Hargreaves, chief product officer at Quant, also believes efficiency must be improved. He identifies that “one of the biggest trends across payments is the rise of programmability. The UK has long been a leader in payments innovation, but with international competition hotting up and the challenge of alternative payment forms like cryptocurrencies on the rise, we must continue to find new ways to unlock efficiencies.
“The rising use of stablecoins is a big opportunity for banks too — particularly the cross-border remittance side.”
Data as a driver
You cannot talk about payments without focusing on data. AccessPay’s Conning argues that accurate data is “absolutely vital because we’re not just processing transactions — we’re enabling critical financial decisions.”
Data can be important to tackling money laundering and fraud. “When we enhance payment data, organisations can make strategic decisions that wouldn’t be possible with basic transaction information alone,” Conning says.
“In the payments industry, accuracy is just the starting point — it’s the enrichment of that accurate data that delivers the real value.”
Quant’s Hargreaves goes further, suggesting that “accurate data is the backbone of the payments industry, where even the smallest discrepancies can have significant financial and regulatory consequences.”
He continues: “High-quality, accurate data is a strategic asset too. It can give financial institutions a competitive edge across a range of fronts, from helping them refine risk assessment models, to personalising customer experiences and enhancing fraud detection systems.
“With competition higher than ever, having accurate data is fundamental for banks and PSPs to offer their customers smoother transactions and more robust security.”
What next?
But if all these experts could be granted one wish to improve the payments space, what would it be?
BNY’s Akkad Azhari and Quant’s Hargreaves focus on fraud prevention. The former explains that, “as digital payments grow, so do fraud schemes — especially tactics like credit push fraud and account takeovers.
“Traditional fraud prevention methods often work in silos, with institutions relying on their own data, making it harder to detect emerging threats.
“To combat this, the industry must move toward greater transparency and collaboration in a secure manner. Enhancing data sharing across financial institutions can help identify fraud patterns more quickly and strengthen defences.”
She outlines that “by fostering a culture of shared intelligence and leveraging advanced fraud detection technologies, the industry can create a more unified and proactive approach to combating financial crime.”
Quant’s Hargreaves says: “I expect to see significant investment in fraud detection and prevention over the next year or so. In the first half of 2024 alone, over £200 million was lost to Authorised Push Payment fraud in the UK. These numbers are simply too high, and the scale of the problem demands wholesale change in how we approach the fraud epidemic.”
Offering a different approach, AccessPay’s Conning says he would like to see “a consolidated payment rail that offers choice of payment speeds — this would give businesses the flexibility to offer what’s appropriate for each situation.”
He believes that this would help enable organisations to make immediate payments while customers are on the phone for urgent matters. He adds that this can be done while using standard processing for routine transactions.
Connings argues that, “this kind of customer-centric approach would significantly enhance service quality, particularly in financial services, while maintaining the efficiency benefits of our existing trusted payment systems. It’s not about radical change, but about smart integration that benefits all stakeholders in the payment ecosystem.”
Finscan’s Marshall also calls on the industry to transform.
“The entire world is watching the payments space evolve, and companies are expected to adopt the latest standards and extend the benefits of such tech to their customers,” he says.
“Companies that delay action due to lack of infrastructure investments or regulatory uncertainty risk falling behind in a rapidly evolving financial landscape. Those that fail to adapt may lose their competitive edge and customers in the long run.”
It is apparent that members of the payments industry want the space to evolve, but they will have to work together to tackle some of the growing fraud and money laundering challenges.
With this increased pressure comes a greater need to advance and innovate solutions that can keep pace with the ever-changing industry. Yet, several challenges remain and the industry is now searching to modernise its practices.
At the click of a finger
Evolving the payments space to help tackle some of the overarching challenges in the industry is paramount, and Bana Akkad Azhari, head of BNY Treasury Services for EMEA, believes that a few steps need to be taken to get there.
“Modernising the payments space requires a shift toward greater standardisation, automation, and transparency, and ISO 20022 is playing a central role in this transformation,” she says.
“While banks may initially question the return on investment, the benefits of ISO 20022 will become more evident as adoption expands. Ultimately, standardisation and automation are key to making global payments faster, safer, and more transparent.”
Likewise, Will Marwick, CEO of IFX Payments, wants greater efficiency and speed. He explains: “If I could click my fingers, I think the interconnectivity of real-time payment systems is what we would want to be able to achieve.”
However, Marwick understands that this is not a simple issue and, as has always been the case with cross-border payments, political complexities can prove to be a large obstacle. “The challenge is more than just technical, it’s political,” he says. “It’s all about cash and who holds what in any jurisdiction. It is not the easiest problem to solve, and it is something that maybe we will never, ever solve, but it is one that I think we can go a long way to improving.”
Jim Conning, banking and alliances director at AccessPay, adds that technological overhaul may not be the way forward. He claims that “we mustn’t innovate for innovation’s sake.
“Where we have trusted payment rails, we can improve those through innovation, but not completely change them because they’re trusted by the community, by both organisations and consumers alike.”
He does point to how AI can be utilised in a more effective manner that will allow for auto-reconciliation which means, “as trust builds in these systems, the manual reconciliation workload could dramatically decrease.”
These arguments are juxtaposed by Steve Marshall, director for advisory services at Finscan. He insists: “Financial institutions, fintechs, and other organisations need a future-proof compliance solution to help them secure transactions, reduce risks, and maintain regulatory compliance — at real-time speeds.”
Marshall believes that the current systems are outdated and are in urgent need of revamping if they are to defend against the biggest challenge the payments space faces — money laundering.
Being smarter
“Traditional anti-money laundering compliance systems were built for slower settlement cycles and much less payments data, so they struggle to keep pace with real-time transaction processing,” Marshall says. “They aren’t built for real-time transactions or complex workflows, requiring more data points to screen against.”
He continues to state that “as financial transactions speed up, so does the potential for financial crime — money laundering, sanctions violations, and fraud.
“With geopolitical instability and rising sanctions activity, organisations must continuously update sanctions lists and customise watchlists for different jurisdictions. False positives remain a significant challenge. Smarter, risk-based screening approaches are essential to maintaining speed without compromising risk management and compliance.”
As per IFX Payments’ Marwick, “money laundering will always be the main thing that I think keeps people in payments up at night.”
But he believes the key to countering this is by the industry working together and through the process of standardisation.
“I think firms can be looking at a whole host of things. From a swift messaging perspective, you’ve got ISO standards being introduced and the additional data is going to be hugely important,” he explains. “The introduction of not just rules based systems, but also behavioral systems — tracking IP addresses, tracking how users use their mouse — making sure that this is the same person, will go a long way.”
Marwick points to how criminals and bad actors will be using their own AI tools to beat financial institutions and their systems — so the institutions must also use the best technology to bolster their defences.
Above all, however, he says that “the industry has an obligation to work together. We’re all in healthy competition with one another, but we also have a community and an industry to protect. I think the only way we can combat money laundering trends is by working together.”
Automation fixation
One thing is clear, members of the industry are adamant that eliminating manual processes is key to taking payments to the next level. Marwick explains that “the reality is every firm across the whole industry will have manual processes that are still operating in the background. How can you truly scale that in terms of digital infrastructure to be operationally resilient from cybersecurity through to growth and scalability?”
BNY’s Akkad Azhari a suggests that manual interventions are costing the industry dearly. She explains: “While straight-through processing is possible for the vast majority, about five per cent of cross-border payments encounter some friction before they reach their destination, resulting in manual interventions that cost the industry upwards of US$2 billion per year.
“When a payment exception occurs — for reasons such as incorrect payee details or missing information — this can cause frustration for the payer and payee. That frustration may also be exacerbated by how complex and cumbersome payment investigations can be, resulting in additional costs and substantial delays.”
Akkad Azhari continues to add that many banks are acting “merely as middlemen” by performing message forwarding tasks. She argues that this creates additional work and takes up time that could be spent elsewhere.
Martin Hargreaves, chief product officer at Quant, also believes efficiency must be improved. He identifies that “one of the biggest trends across payments is the rise of programmability. The UK has long been a leader in payments innovation, but with international competition hotting up and the challenge of alternative payment forms like cryptocurrencies on the rise, we must continue to find new ways to unlock efficiencies.
“The rising use of stablecoins is a big opportunity for banks too — particularly the cross-border remittance side.”
Data as a driver
You cannot talk about payments without focusing on data. AccessPay’s Conning argues that accurate data is “absolutely vital because we’re not just processing transactions — we’re enabling critical financial decisions.”
Data can be important to tackling money laundering and fraud. “When we enhance payment data, organisations can make strategic decisions that wouldn’t be possible with basic transaction information alone,” Conning says.
“In the payments industry, accuracy is just the starting point — it’s the enrichment of that accurate data that delivers the real value.”
Quant’s Hargreaves goes further, suggesting that “accurate data is the backbone of the payments industry, where even the smallest discrepancies can have significant financial and regulatory consequences.”
He continues: “High-quality, accurate data is a strategic asset too. It can give financial institutions a competitive edge across a range of fronts, from helping them refine risk assessment models, to personalising customer experiences and enhancing fraud detection systems.
“With competition higher than ever, having accurate data is fundamental for banks and PSPs to offer their customers smoother transactions and more robust security.”
What next?
But if all these experts could be granted one wish to improve the payments space, what would it be?
BNY’s Akkad Azhari and Quant’s Hargreaves focus on fraud prevention. The former explains that, “as digital payments grow, so do fraud schemes — especially tactics like credit push fraud and account takeovers.
“Traditional fraud prevention methods often work in silos, with institutions relying on their own data, making it harder to detect emerging threats.
“To combat this, the industry must move toward greater transparency and collaboration in a secure manner. Enhancing data sharing across financial institutions can help identify fraud patterns more quickly and strengthen defences.”
She outlines that “by fostering a culture of shared intelligence and leveraging advanced fraud detection technologies, the industry can create a more unified and proactive approach to combating financial crime.”
Quant’s Hargreaves says: “I expect to see significant investment in fraud detection and prevention over the next year or so. In the first half of 2024 alone, over £200 million was lost to Authorised Push Payment fraud in the UK. These numbers are simply too high, and the scale of the problem demands wholesale change in how we approach the fraud epidemic.”
Offering a different approach, AccessPay’s Conning says he would like to see “a consolidated payment rail that offers choice of payment speeds — this would give businesses the flexibility to offer what’s appropriate for each situation.”
He believes that this would help enable organisations to make immediate payments while customers are on the phone for urgent matters. He adds that this can be done while using standard processing for routine transactions.
Connings argues that, “this kind of customer-centric approach would significantly enhance service quality, particularly in financial services, while maintaining the efficiency benefits of our existing trusted payment systems. It’s not about radical change, but about smart integration that benefits all stakeholders in the payment ecosystem.”
Finscan’s Marshall also calls on the industry to transform.
“The entire world is watching the payments space evolve, and companies are expected to adopt the latest standards and extend the benefits of such tech to their customers,” he says.
“Companies that delay action due to lack of infrastructure investments or regulatory uncertainty risk falling behind in a rapidly evolving financial landscape. Those that fail to adapt may lose their competitive edge and customers in the long run.”
It is apparent that members of the payments industry want the space to evolve, but they will have to work together to tackle some of the growing fraud and money laundering challenges.
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