New Ideas, Real Insights, Bold Perspectives

Victoria Cleland, Chief Cashier and Executive Director for Payments, Bank of
England

The renewal of the U.K.’s Real-Time Gross Settlement (RTGS) service, recently delivered by the Bank of England in collaboration with the payments industry, marks a pivotal moment in the evolution of the U.K.’s payments infrastructure. In this article, I reflect on the significant benefits delivered by the renewed RTGS service (RT2) and its transformative potential. RT2 enables innovation in wholesale payments by acting as a platform for innovation, which will be delivered through close collaboration with industry.

Carlos Nasher,Managing Partner, Thede Consulting (part of Projective Group)
Robert-Jan Wekking, Group Practice Lead Payments, Projective Group

The payments industry is undergoing significant transformation as cash loses relevance and innovations such as the digital euro, embedded finance, and European initiatives like Wero gain momentum. Alongside these shifts, regulatory changes including PSD3/PSR, DORA, and the potential FIDA framework, as well as the rollout of the E.U. Digital Identity Wallet (EUDIW), will reshape market operations. While compliance poses challenges, greater data availability combined with Artificial Intelligence offers vast opportunities for personalized services. This article provides an overview of these trends and examines five possible future scenarios, offering strategic recommendations for payment stakeholders.

Jean-Paul Lam, Associate Professor of Economics, University of Waterloo, and Chief AI of Research, Goodlabs Studio
Thomas Lo, CEO and Co-Founder, GoodLabs Studio
Donald McGillivray, Lead Applied AI Developer, GoodLabs Studio
Chris McMahon, Director, AI & Emerging Technologies Research, GoodLabs Studio
Alex Ostrovsky, AI Advisor, GoodLabs Studio

Real-time gross settlement (RTGS) systems are the foundation of modern financial infrastructure, yet many still rely on outdated and liquidity-intensive algorithms. This paper offers a practical guide to improving liquidity efficiency through more innovative payment algorithms, with a focus on liquidity-saving mechanisms (LSMs). We survey recent innovations in queue management, graph-based methods, and AI-driven techniques, including both classical and quantum-inspired optimization. Drawing on our own research and simulations, we demonstrate how non-invasive, real-time reordering of payments can reduce peak liquidity needs without compromising system safety or speed. These insights are relevant not only for central banks and financial institutions, but also to a wide range of sectors, including logistics, operations, and resource-constrained environments.

Paul H. Kupiec, Senior Fellow and Arthur F. Burns Chair in Financial Policy, American Enterprise Institute

Stablecoins are the traveler’s check of the internet era. Once tendered and confirmed genuine by some public cryptologic process, a stablecoin’s monetary value is trustworthy and readily convertible into legal currency. Stablecoins have seen only limited use in commercial transactions, but this seems certain to change. Compared to stablecoins, traditional bank deposits offer more favorable capital/reserve requirements, federal deposit insurance, and the ability to pay interest. New legislation poised to pass the U.S. Congress will enable banks to offer stablecoin financial services. This legislation will likely catalyze the development of hybrid deposit accounts, where bank depositors earn interest on balances that can seamlessly be transformed into bank-issued stablecoins, which can then be traded and subsequently transformed back into traditional deposits.

Koen Vierendeels, Head of Transaction Banking, Belfius
Robert-Jan Wekking, Group Practice Lead Payments, Projective Group

Corporate treasurers already had enough on their plates before the recent geopolitical challenges made their jobs significantly more complicated and challenging. From trying to remain compliant with the numerous regulatory environments, to preventing fraud, keeping up with the latest technologies, and trying to find the best way to manage the funds of the enterprise, corporate treasurers already had quite a bit to deal with. However, the recent trade wars have made that task somewhat more complicated, with expectations that taxes could become even more complex to manage for globally diverse organizations. These challenges come at a time when, like most other functions, corporate treasuries were working on their digital transformation strategies, made somewhat more complicated, and exciting, by the AI revolution. Interestingly, these same new technologies can, and will, have a profound impact on how organizations manage their cash, and with whom they will partner going forward. In this article, we posit that these new technologies will make the corporate cash management market much more competitive, and allow regional and local banks to compete head-on with global players.

Jorissa Neutelings, Chief Digital Officer, ABN AMRO Bank N.V.

In an era where customer expectations are fluid and technology defines experience, banks must evolve from rigid structures to adaptive, customer-centric ecosystems. In this article, I explore the imperative for financial institutions to become “liquid companies” – organizations that seamlessly integrate data, technology, and trust to meet clients in their own digital spaces. I outline the strategic shifts required to deliver hyper-personalized, secure, and intuitive interactions, and argue that trust, once a passive asset, must now be actively engineered into every customer touchpoint. Through insights on digital convergence, intelligent friction, and organizational redesign, the article offers a roadmap for banks to lead the future of customer interaction.

Phoebus L. Athanassiou, Senior Lead Legal Counsel, European Central Bank, and Associate Professor, Goethe Universität, Frankfurt am Main

The asset tokenization phenomenon – broadly defined as the conversion into digital and marketable tokens of certain rights, and their holding and trading through distributed (shared) ledgers – is taking capital markets by storm, promising to leave a lasting imprint on the issuance and trading of financial assets. This paper seeks to (i) explain, in lay terms, what asset tokenization is about and where its true novelty resides, (ii) provide a high-level account of how asset tokenization and its outcomes are regulated in the E.U., the U.S., and the U.K., and (iii) draw attention to the importance of the private law treatment of tokenized assets in circumscribing the rights that prospective investors can expect to acquire in them, if they should decide to add them to their portfolio, and the obligations that their issuers can expect to incur vis-à-vis their holders, if they should decide to issue those assets. As will be explained in this article, depending on whether certain tokenized assets (also) qualify as regulated financial instruments under the law of the jurisdiction of their issuance, asset tokenization may leave unaffected their fundamental legal nature as objects of regulation, and the obligations of their issuers. For tokenized assets that do not qualify as regulated financial instruments, the nature of the aforementioned rights and obligations is difficult to determine, absent dedicated legislation, inevitably impacting on the decision to issue or to invest in them, as the case may be.

Magali Van Bulck, Head of Public Policy (EMEA), Wise

International payments remain incredibly slow, expensive, and hard to do. This inefficiency stems from financial systems built for domestic needs and the creation of complex correspondent banking chains. The G20 Roadmap for Enhancing Cross-Border Payments was launched in 2020 to tackle this issue. It aims to make international payments faster, cheaper, more accessible, and transparent by 2027 for retail/wholesale payments and by 2030 for remittances. The Roadmap is built on four pillars: cost, speed, access and transparency. This article argues that urgent action is needed in two foundational areas: access, and transparency, or more specifically, direct access for non-bank payment service providers (non-banks) and price transparency. These are prerequisites for achieving broader reductions in price and increases in speed.

Stephen Peters, Head of Enterprise Payment Solutions, FIS
Alan Verschoyle-King, U.K. Payments Practice Lead, Projective Group

Artificial Intelligence (AI) is reshaping financial services operations in ways most banks had not anticipated. This new technology will allow smaller, nimbler competitors to take on the more established players and provide faster, cheaper, and more efficient payments services. Major banking institutions are responding to this challenge by investing significant sums in this new technology. However, the focus, at least at this stage, seems to be predominantly on how the technologies can be used to improve certain aspects of the value chain, such as increasing personalization and speed and reducing human intervention and errors, rather than on the overall infrastructure upon which the entire business model is built. This article aims to change the dialogue and focus the attention of the leaders of banking institutions to establish the kind of payments operating model that will not only allow AI, and its derivative technologies, to be utilized, but will place it as part of the foundation.

Emanuel van Praag, Professor of Financial Technology (FinTech) and Law, Erasmus School of Law, and Counsel, Kennedy Van der Laan

This article examines the evolving regulatory landscape governing retail payments in the European Union (E.U.), with a focus on the competing legal and societal interests that payment service providers (PSPs) must meet. As digital payments accelerate and regulatory demands intensify, PSPs are increasingly expected to reconcile conflicting objectives across multiple domains. A combination of regulatory burdens, the need to continuously increase payment speed while preventing fraud, and the pressure to balance innovation with financial inclusion means that PSPs operate under persistent legal ambiguity and societal scrutiny. Their ability to navigate these competing demands with transparency, accountability, and fairness is critical to the integrity of the European payments ecosystem.

Galitchenko Iouri, Products and Market Manager, SWIFT

This article explores how financial institutions can transform their exceptions and investigations (E&I) processes in cross-border payments to reduce cost, improve customer satisfaction, and meet new compliance requirements. While payments have become faster, investigations are still taking a long time to be resolved; mostly due to manual interventions and old messaging formats. By using tools like SWIFT Case Management, ISO 20022, and AI technologies, banks can reduce costs and gain competitive perspective. Using real industry data and examples, this article explains why modernizing E&I is not just a good idea, but a business imperative.

Diederik Bruggink, Senior Director, Payments, Digital Finance and Innovation, European Savings and Retail Banking Group (ESBG)
Douglas Lockhart, Payments and Digital Finance Advisor, European Savings and Retail Banking Group (ESBG)

This article explores ongoing efforts to establish European sovereignty in retail payments amidst increasing geopolitical pressures and regulatory advancements. It highlights the rise of non-cash payments in the euro area, with card payments being the most prevalent method. Regulatory measures such as the Instant Payments Regulation and the proposed digital euro are being designed to promote innovation, efficiency, and European independence in payment systems. It points out concerns over Europe’s reliance on international card schemes and foreign-owned processing infrastructure, which underscores the pressing need for strategic autonomy in this sector. Private-sector initiatives like the European Payments Initiative (EPI) and EuroPA focus on developing pan-European payment solutions, leveraging technologies such as SEPA Instant Credit Transfers. These initiatives aim to reduce fragmentation and enhance interoperability within the European payments landscape. The collaboration between EPI and EuroPA demonstrates promising advancements toward achieving seamless cross-border payment solutions. Despite these efforts, challenges remain in public and private approaches, particularly regarding cost efficiency and adaptability. Questions linger over the feasibility of proposed solutions, including the digital euro, in meeting diverse policy objectives and market demands. In conclusion, this article underscores the complexities and challenges involved in creating a unified European payments system. While significant progress has been made, achieving a comprehensive solution will require balancing public institutional oversight with private-sector innovation and adaptability, all while addressing the various policy issues and technical challenges at hand.

Christophe Bonte, Senior Policy Adviser, European Banking Federation

Europe’s payments sector is facing significant and unprecedented changes. With the constant emergence of new technologies, payments are probably the financial activity most affected by innovation. Furthermore, regulation continues to impact all aspects of payments. With the fast geopolitical changes and considering the crucial role it plays in the economy, the payments sector is increasingly driven by political imperatives. Sovereignty, competitiveness, and resilience have become key issues that strongly influence the future of payments in Europe. In this article, I examine the challenges and opportunities associated with the accelerating digitalization of the payments landscape in Europe, a trend intensified by the rollout of instant payments. I will also discuss the European authorities’ plan to create a state-backed retail digital euro, in contrast with most other jurisdictions across the world, and how this may impact the functioning of the European payments market, the innovation capacity of banks, and potentially financial stability if the project is not properly framed. All these developments lead to increased pressure on security of payments, which with fraud levels remaining high, has become an issue that must be combated by all relevant actors.

Piers Reynolds, Partner, Freshfields LLP
Laura Feldman, Barrister, Freshfields LLP, and Lecturer in Law, University of Oxford

The digitalization of payments has elevated the role of technical service providers (TSPs), such as e-wallet providers, in the client-facing layer of the payment chain. Their growing involvement poses challenges for card-issuing banks, particularly regarding their obligation to apply strong customer authentication (SCA) under the Revised Payment Services Directive (PSD2). This article argues that TSPs involved in the authentication process act as outsourced service providers for the purposes of SCA, triggering compliance with the broader outsourcing framework – including the EBA Guidelines on Outsourcing and DORA. As TSPs are not typically subject to direct supervision by financial regulators, banks may struggle to enforce the contractual safeguards required by outsourcing rules. This tension raises questions about enforcement and accountability in the current regulatory architecture

Jan Jans, Partner, RegCounsel Financial Services

The digitalization of payments has elevated the role of technical service providers (TSPs), such as e-wallet providers, in the client-facing layer of the payment chain. Their growing involvement poses challenges for card-issuing banks, particularly regarding their obligation to apply strong customer authentication (SCA) under the Revised Payment Services Directive (PSD2). This article argues that TSPs involved in the authentication process act as outsourced service providers for the purposes of SCA, triggering compliance with the broader outsourcing framework – including the EBA Guidelines on Outsourcing and DORA. As TSPs are not typically subject to direct supervision by financial regulators, banks may struggle to enforce the contractual safeguards required by outsourcing rules. This tension raises questions about enforcement and accountability in the current regulatory architecture.

John A. Bottega, President, EDM Association

For the past 20 years, data management has transformed from a back-office function into a core strategic capability across industries. The 2008 financial crisis accelerated this transformation by exposing the risks associated with failing to properly curate and understand our critical information assets. It pushed data management to the forefront, and today, all industries are recognizing how improved data management discipline will not only avoid risk but create competitive opportunities and improved operational efficiencies. In this paper, we explore, through a number of real-world case studies, how deploying improved data management capabilities is helping to improve corporate efficiency. Across all industries, data management is now a critical function and key factor in the success of organizations competing in an ever-increasing digital economy. And to be competitive in this new world of AI, data is the fuel that feeds our AI programs and proper data management will increase the probability that our AI implementations will be accurate, ethical, and trusted. Data integrity is critical in complex business systems where any weakness in data quality or security threatens the entire process. This paper underscores the need for disciplined data management practices, ethical standards, and investment in data-centric leadership to support a stable and innovative global economy.

Tobias Trütsch, Managing Director and Head of the Center for Financial Services Innovation (FSI-HSG), University of St. Gallen (HSG), Switzerland

While cash use is steadily declining in favor of digital payments, its societal relevance remains strong. This paradox reflects cash’s enduring role as a store of value, symbol of financial autonomy, and trusted medium in times of crisis. Although fewer transactions involve cash, public resistance to its abolition is growing. Declining access and acceptance risk triggering a self-reinforcing downward spiral, raising concerns about inclusion and resilience. Maintaining cash as a public good may require legal and policy measures. The debate over cash’s future, therefore, transcends technology, touching on fundamental issues of trust, equity, and systemic stability

Dominique Allebroeck, Product Manager, The European Payments Council

As the European Payments Council (EPC) prepares to launch its Verification of Payee (VOP) scheme in October 2025, this article explores the scheme’s implementation, regulatory background, and broader implications for fraud prevention, user experience, and financial interoperability across the Single Euro Payments Area (SEPA). Introduced in response to the E.U. Instant Payments Regulation (IPR), the scheme aims to reduce fraud and misdirected payments by enabling name-IBAN verification before transactions are authorized. The article explains how the scheme functions, including the role of Routing and/or Verification Mechanisms (RVMs) and the EPC Directory Service (EDS), which together enable real time verification and secure data exchange between Payment Service Providers (PSPs). It also outlines the responsibilities of payers, payees, and PSPs in adapting to the new process, along with the compliance steps required from PSPs. Finally, the article considers future developments for the VOP scheme, positioning VOP as a key pillar for safer, more trustworthy digital payments in Europe.

Buck Rogers, Professor in Cyber Security, University of Gloucestershire, and Cyber Advisor, Projective Group
Scott Beange, Head of Data Management and Cyber Strategy, Projective Group

This paper explores the growing threat of ransomware to self-hosted payment systems, which are increasingly targeted due to the sensitive financial data they handle and their operational importance. It examines the evolving tactics used by ransomware actors, including double extortion and backup destruction, and identifies common vulnerabilities in payment infrastructure such as weak access controls, unpatched systems, and insufficient segmentation. Drawing on industry best practices and peer reviewed research, this article outlines a multi-layered defense strategy incorporating strong access controls, endpoint protection, immutable offline backups, staff training, and incident response planning. It also stresses the importance of threat intelligence and compliance with standards like PCI DSS. The paper concludes with actionable recommendations to help financial organizations enhance resilience, minimize operational disruption, and reduce the likelihood of ransom payments.

David S. Krause, Emeritus Associate Professor of Finance, Marquette University
Eric P. Krause, Assistant Professor of Accounting, Iowa State University

This paper explores the transformation of global cross-border payments at the intersection of technological innovation, geopolitical fragmentation, and auditing complexity. It evaluates the limitations of legacy infrastructures, such as SWIFT and correspondent banking, and examines the emergence of distributed ledger technologies (DLT), central bank digital currencies (CBDCs), and newly institutionalized stablecoins. Special attention is given to the implications of the U.S. GENIUS Act, which provides regulatory clarity for fiat-backed stablecoins and has catalyzed issuance by major financial institutions. While these digital assets promise faster, lower-cost, and more transparent cross-border transactions, they also raise new challenges regarding taxation, custody, interoperability, and auditability. This paper analyzes how programmable financial architectures alter compliance and assurance dynamics and how stablecoins may support geopolitical objectives by reinforcing dollar dominance in digital networks. It concludes with policy recommendations focused on technical standardization, regulatory harmonization, and modernization of auditing practices to enhance the resilience, integrity, and inclusivity of the evolving global payments ecosystem.

Christian Sillaber, Senior Researcher, Department of Private Law, University Bern

The emergence of CBDCs, and specifically the development of the digital euro, presents a complex landscape of challenges and opportunities within the AML/CFT framework. This article provides an analysis of the bifurcated AML/CFT approaches embedded within the digital euro’s design, highlighting the tension between legacy compliance models and novel privacy considerations. The online variant of the digital euro showcases enhanced KYC, continuous transaction monitoring, and robust digital identity integration, with oversight centralized under the recently established AMLA. These mechanisms promise to exceed traditional banking surveillance and traceability, leveraging real-time data and audit trails to set new benchmarks for AML efficacy. Conversely, the digital euro’s offline variant – intended to emulate the anonymity and immediacy of cash – depends primarily on transaction limits, presenting intricate calibration challenges. This paper argues that the digital euro’s AML/CFT regime is poised to serve as a regulatory bellwether for broader E.U.-wide adaptation to rapid technological change. As public attitudes and stakeholder resistance evolve in response to policy trade offs, it is essential that AML/CFT objectives are pursued without compromising innovation, fundamental rights, or equitable economic participation.