Hosting the second roundtable of the event, Sulabh Agarwal, global head of payments at Accenture, engaged in a discussion with Simon McConnell, European clearing head, treasury and trade solutions at Citi, and Bruno Mellado, global head of payments and receivables at BNP Paribas, about the challenges of transformation in the banking sector.
Agarwal opened the session by recognizing the significance of payments in the discussions at EBAday. He posed a poll question to the audience regarding the primary payment programs their institutions plan to implement in the coming year. An overwhelming 75% of respondents identified instant payments regulation as their top priority, followed by ISO 20022 migration at 58%.
The roundtable began with McConnell outlining the major regulatory changes on the horizon and the challenges they pose for banks. Mellado emphasized that, given the multinational presence of many banking institutions, it’s critical to consider the simultaneous regulatory changes occurring across different countries.
The central issue remains the need for safe and efficient digital transactions that are real-time and data-rich, regardless of the payment method. Mellado noted that while significant changes are necessary, introducing new services for clients will take a back seat in terms of priority.
Agarwal facilitated a second poll asking how major investments are justified within the audience’s institutions. Compliance and maintaining licensing costs emerged as the top priority for 73% of respondents, while only 27% focused on long-term revenue goals.
McConnell stressed the importance for banks to effectively leverage their spending. He highlighted that organizations should not only plan for immediate goals but also look ahead to future requirements. “They must invest in core infrastructure, but this needs to be balanced with user experience and compliance spending,” he said.
Mellado pointed out the significant financial burden of these mandated investments, estimating that the banking sector in Europe would require at least $10 billion to comply with instant payments regulations, a figure he considers conservative.
In a third audience poll, participants identified ‘too many priorities/initiatives’ (69%) and ‘legacy technology’ (66%) as the primary challenges in their organizations’ transformation efforts. Both McConnell and Mellado underscored the necessity of having the right talent and knowledge to navigate these changes.
Transformation must be viewed as an end-to-end experience across the organization, making knowledgeable resources and effective project management critical to overcoming the complexities involved.
Agarwal then inquired about the challenges of implementing instant payments. The audience cited fraud prevention (63%) and real-time pre-processing (52%) as significant concerns. Mellado noted that the challenge isn’t limited to domestic borders; by 2027, an estimated 50% of the world is expected to adopt instant payments. McConnell added that banks must consider both the urgency of deadlines in Europe and the long-term implications of their choices.
A final audience poll examined opportunities for collaborative industry efforts to enable use cases. ‘Request to Pay’ was identified as a leading opportunity at 53%, followed closely by one-leg-out credit transfer schemes at 45%. McConnell and Mellado both highlighted the benefits of building on existing systems to improve interoperability and standard usage.
In closing, Agarwal sought the participants’ final thoughts on navigating the transformation journey.
Mellado emphasized the importance of forward-thinking: “The key message is to think ahead. There are numerous regulations coming in, and if you don’t understand where your current investments are leading, you may find yourself needing to reverse them later.”
McConnell concurred, stating, “It’s crucial to ask the right questions and engage with your providers and partners to determine which aspects you can manage yourself and what can be supported by others. Explore the potential to leverage existing investments.”