Payments: Building the future of banking in real-time
Banks are moving fast, embedding new technologies to embrace the push to real-time payments that’s coming from customers, regulators, payment schemes, and new competition within Australia and across the globe. The impact is transformational and will provide better outcomes for both consumers and large institutions.
Four key themes emerged at this year’s four-day Sibos event in Beijing where industry leaders from around the globe convened to share their insights on new models for payments, the transformation of treasuries, and their own operations, as they embrace the real-time era.
The pace of change is rapid, and banking leaders from East to West presented at the ‘Connecting the Future of Finance’ event – both in-person and virtually – outlining recent developments and their plans for the next wave of transformation.
More than strongly aligned, Westpac is leading the way in Australia on many of the innovations covered in this year’s Sibos sessions. This report calls out the big themes and how Westpac is changing the game in real-time.
Theme 1: The move to real-time is changing liquidity, working capital, and payments needs for customers
More than 70 countries across the world have implemented domestic Real-Time Payments (RTP) schemes, creating better cash flow and advantages including on-demand liquidity and payroll. With that, the pressure is on for cross-border payments to deliver faster settlement certainty.
In Australia, the exit of cheques and the target date for the decommissioning of the batch processing system by 2030 has been set.
At Westpac, we are working with our customers on paper-to-digital migration, the move from Direct Entry to the New Payments Platform (NPP), migration plans and the benefits of starting now.
As we shift to real-time, many of our customers are already realising the advantages of adopting new products and services that bring on better cash flow visibility and decisioning for customers, including:
- PayTo – part of an ongoing trend towards account-to-account payment services that leverages the bank’s real-time payments investment in NPP. This payment method allows businesses to set up their receivables in a much faster, more streamlined way, with better control, while also providing a more transparent digital experience for their customers.
- Westpac’s Dynamic Virtual Card (DVC) capability is a secure and efficient way to process payments by generating and delivering virtual cards in near real-time to employees or suppliers via their mobile wallets. Our single-use DVC capability offers speed, control and security for many use cases. DVCs can be integrated with numerous procurement platforms for seamless business expense management and access to working capital. Customers can also use this to replace petty cash for incidental expenses.
The shift to real-time cross-border payments may have started and as discussed throughout Sibos the expectation is to keep at pace with domestic transformation.
- Westpac can accept cross-border payments and settle through NPP giving customers access to their money in real-time. Where possible, we’re also leveraging other countries’ real-time payment schemes to make the settlement faster for customers sending funds overseas – that’s already happening for GBP (Great British Pound) transactions and plans are well underway to expand to other jurisdictions.
Theme 2: New opportunities are emerging as ISO 20022 messaging is adopted across the world
Australia has made significant progress in message standardisation through ISO adoption. In September 2024, the transition of Real-time Gross Settlement (RTGS) payments to ISO standards was concluded, with cross-border payments now taking shape.
- Westpac is upgrading its payments processing system to cater for the new standards and accelerate the benefits from the richer data, along with more straight-through processing, better screening and monitoring.
- Harmonisation of ISO 20022 across real-time, high value and cross-border schemes is planned with the prospect of a more seamless customer experience and will help businesses extend their working capital cycles, because they won’t have to make cross-border payments days in advance.
Theme 3: Strategic partnerships will be required across technology, fintechs, central banks and regulators to deliver real-time disruption
The rapid adaptability of banks to real-time operations calls for collaboration and the right partnerships to help accelerate digitisation and bring solutions to market quickly.
The move to real-time will need to take advantage of enabling technologies and a digital-first approach to solving problems across the entire ecosystem, which includes interactions with regulators and central banks.
The requirement for the G20 countries to adhere to performance indicators for cross-border payments by 2027 across speed, transparency, cost, and access is an outstanding example of how a solution to a challenge can be accelerated through worldwide collaboration.
Theme 4: The rise of more advanced fraud and compliance solutions.
Sibos delegates heard that increasing fraud and scams is a global issue and faster payments innovation demands new solutions to address the always-pressing issue of security. This is something that needs strong collaboration and pre-validation measures across domestic and cross-border payments are needed to add more controls before payments are sent.
The Australian Government has made it clear that innovation can’t come at a cost of increased fraud and scams.
Last year Westpac joined the Scam-Safe Accord, an agreement between banks and other financial institutions to adopt a set of anti-scam measures that deliver a higher standard of protection for customers. In an Australian first, we’ve introduced Westpac SaferPay, which alerts customers to a potential scam through a series of questions when a payment has been detected as high risk. Powered by artificial intelligence and integrated into our fraud detection systems, the service helps to identify red flags without disrupting genuine payments.
Our latest security innovation to market is Westpac Verify for PaymentsPlus, designed to help businesses and government agencies to reduce scam losses by preventing fake invoice or payment redirection fraud involving business email compromise by enabling users to run a check on payee details before initiating payments, alerting them to potential account number and name mismatches.
Roll on 2025
Sibos is always a compelling mix of thought-provoking and practical ideas and insights from many of the banking industry’s global leaders.
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