Redefining Global Transaction Banking with A2A and Cross-Border Payments

Scott Hamilton (Finextra): redefining global transaction banking with account-to-account and cross-border payments.1 I'm Scott Hamilton, contributing editor for Finextra, and I'm here to lead a conversation on that topic and to explore important insights on it with you, our audience. But before we jump into that discussion with our experts today, I'd like to share a couple of housekeeping announcements. First, you're encouraged to ask questions and we'll do all we can to answer as many as we can during the session. You'll also have a chance to win on two audience polls during the session. And then finally, you'll find some links to helpful documents and sources provided by our sponsor, GridGain, available for you to download.

Now, whether you call them account-to-account transfers or pay-by-bank, they're taking the world by storm. If you've read the synopsis for this webinar, you know that A2A transfers, which move funds directly and in many cases instantly between persons, businesses, or from consumers to merchants, tend to avoid traditional BACS or ACHs or SWIFT payment rails on a local basis. And they're projected to grow to a value of more than 15 times what they amounted to in 2023 by 2032. That's substantial growth and it's being driven now and will continue to be by the fact that account-to-account transfers are:

• faster,
• 24/7 real-time usually,
• secure and encrypted,
• no third parties necessary in the middle of the process.

It's just you and your financial provider, full visibility of each transaction, and using your phone if you like. Beyond that, open banking via API connections to other institutions and digital wallets, even ISO 20022 standardization may unlock new possibilities. A really a world beyond cards and other traditional transaction types. And then there are international payments and that market is worth into the hundreds of trillions now and projected to keep growing at a 5% clip per year ongoing. These should not be as complicated or costly as they tend to be for people managing overseas needs or paying suppliers. Whether personal or business related, they can take longer to complete, sometimes several days longer, and they can have lots of hidden charges, especially for FX, and more as certain countries and currencies come into play.2 Not to mention, they can be tough to track sometimes or for some, most of the time.

Now, account-to-account transfers are quite possibly the first ideal solution to transform commerce so substantially in a very, very long time. Yet when you change behaviors, systems, and locales, and speed up something that's slow or decrease costs and barriers to getting transactions executed more simply than before, there can be unfortunate consequences to those who aren't prepared for fraud, for example. Now solutions are needed to keep the momentum going as these new borderless instant payments spread around the globe. Now AI will surely play a role, and very importantly, people in compliance and operations, and of course, product teams. They'll need to work together to make sure that all the I's are dotted and the T's are crossed when account-to-account procedures are commercialized for customer use. And that they're ready to be regional and global regulators' expectations. Now, stablecoins and tokenized deposits, you've probably heard of, they'll have roles to play too and not everyone is going to be happy about all of this. Legacy correspondent banks that don't or can't step up their game to match the new trends in transactions may see many of their presently profitable relationships fade away.

These are the topics we'll be tackling today with our outstanding panel of experts. Oscar Herrera, Global Vice President of Field Technical Services for GridGain Systems, our sponsor.3 Zaynap Sayian, Head of Partnerships, Europe for Visa Direct. And VJ Annan, Head of Digital One, Product and Engineering, Payments and Banking Products for FIS. Oscar, why don't you start us off with an overview of the advantages and also some of the challenges of account-to-account or pay-by-bank transfers and other instant payments, relative especially to fraud prevention and security, and how their advantages are playing out in the marketplace in terms of speed and execution and data handling, and then different fraud detection models, especially for cross-border payments, and why this matters?

Oscar Herrera (GridGain Systems): Thanks, Scott. So, just to give a little background. So, a few years ago, banks could afford minutes or hours to validate transactions and spot fraud. Today, it's come down to milliseconds. Customers tap their phones, a payment gateway receives the information, and then an account-to-account transfer between two continents fires off in less than the time that it takes to blink. And somewhere in the middle, someone's always looking to intercept that transaction and make something and behave poorly with it. The benefits today is exactly that. We have the power of payments, whether it be local payments, interstate payments, into country, across border payments, across continent payments, at the tip of our fingers. They're sitting up, they sit in our cell phones, they sit on our, on our browsers. With a click of a button, we must be able to initiate the transfer, validate the customer information, identify the customer, identify if there's fraud, fraud scoring. And basically, figure out if it's an FX transaction, the best corridor, and which rules are going to apply in order to execute that cross-border transaction. And all this must must be able to synchronize ledgers and account balances across different regions. And the, the challenge is this all now has to happen within 1 to 5 milliseconds. Faster than a blink of an eye all these things must occur. So, we now need to be able to create technology and have platform that can do these things in a near real-time fashion. Most, the challenges we face today is that most financial institutions are still running legacy systems that focused around a non-real-time, near real-time being hours to do transactions, versus what customers expect today, which is instant at first within the time it takes to reload your balance. So, today, there's a lot of challenges. But I think the technology has begun to catch up both with different platforms and data fabrics that are out there. Platforms that can do compute near the data, as close to the data as possible. As well as AI and ML, lending their hand in identifying and and doing fraud scoring as transactions come through.

Scott Hamilton (Finextra): Thank you. That's an excellent overview to kind of get us started. And Zaynap, any thoughts you might add to Oscar's comments from your role working especially with partnerships for Visa Direct in Europe? And how well are account-to-account models integrating into banking and commerce now in the, in the continent and elsewhere as well? And what are the biggest challenges you see to correspondent banking as we come into this merging payments environment?

Zaynap Sayian (Visa Direct): Thank you, Scott. I agree. This is off the mark, very great questions. So I totally agree with everything that Oscar mentioned. Maybe let me jump into the account-to-accounts, how it's integrated. So, I would like to start by giving you some stats, because the numbers are really staggering. So, when we are talking about account-to-account market, it's almost exploding. So, going from 60 billion transaction today to over 885 billion transaction in 2029. So, it's doubling, we are talking about 200% increase. And when we look at the cross-border payments, the very engine of global commerce, we are talking about 250 trillion billion, trillion USD in space. So, it is massive, if you think about it, it's larger than GDP of some of the countries. So, and A2A provides convenience, fast, payments, transactions, low, low cost and secure, traceable transactions.⁴ So, you would think that A2A would be an easy win everywhere. But it's not really the reality. So, the path to A2A integration looks completely different depending on where you are in the world. So, for instance, if you are in a market like India or Thailand, the conditions were perfect. So, they could leapfrog old payment system and go straight to the modern A2A. Because, because, like, the digital habits were still being formed and with the there were very strong government backing. And basically these system quickly became the default. But in Europe, we don't see the same. So, it's a very tough market. We are, first of all, we are not starting from a blank page. And there is a very deeply embedded payment culture. So, people are used to reliable cards and direct debits and it's very difficult to change these habits. And historically, there is, the market is fragmented as well. So, I think the change will be triggered probably with the instant payment regulation in Europe. Because this mandates that all the Eurozone banks must be able to receive instant payments. And I would think that that will be a huge catalyst for open banking and making pay-by-bank much more realistic and attractive option across Europe. And I would like to also mention, because you also ask in the previous question, like from my role in Visa, from Visa Direct perspective, so this is exactly, I think, where Visa adds value to the fragmentation. Because our primary solution in the space is Visa Direct. And what it does, first of all, it use our trusted global network to enable real-time payments. And it can be either to a card or directly to an account or a wallet. So, it is across different payout channels. And also this gives businesses the speed of an A2A transfer, with the simplicity, with a global reach and security of the Visa brand. That's, clients are, consumers and merchants have trusted for decades. So, I think that's the probably the combination of unlocking the full potential of account-to-account payments. And coming back to your second question, which was the biggest challenges that I see on the correspondent banking in the emergent payment environment. So, I think this is a very critical question. Because the biggest challenges are actually obvious one and it can be boiled down to three things: cost, speed and clarity, and by clarity, I mean traceability of the transaction. So, if we are being honest here, for decades, sending money across borders has been very slow, expensive, and definitely not a traceable and transparent process. So, if you send money, it can sometimes takes days to arrive. Usually, you have no idea how it will cost because of the unpredictable fees of the intermediary banks. And also you don't really have a traceability, so you don't know when it will arrive. So, it's almost like sending a package without a tracking number on it. So, Fintechs and A2A networks have completely exposed these weaknesses. So, by offering faster, cheaper alternative. And obviously, customer expectation have permanently shifted. So, nowadays, everybody wants to have fast and transparent transactions. And as Visa, we do have visibility to both fintech world and the traditional bank world. So, we recently made an analysis with one of the top consulting firm in the world. And we analyzed the data for retail segment, SMB and large corporates. For retail, as of today, 70% of the transaction sits with fintechs. So, if you think about it, banks lost a huge market share in this segment. And we do see a similar trend on SMBs at the moment. And I think in the near future, we will see a similar shift from traditional banks to the fintechs on the corporate. Corporate segment as well. So, obviously banks themselves are feeling this pressure intensely. But the cost of compliance is increasing. There's a lot of regulatory requests, so especially for anti-money laundering checks that Oscar also mentioned. So, and also, this start to make, like, many of those old correspondent relationships simply unprofitable to maintain. And if we look in Europe, there has been 40% reduction in active correspondent banking relationships since 2011. So, if you think about it, nearly half have vanished. So, largely because of the regulatory pressures that I mentioned. And, and that's why, like, now there is this alternative solution. And Visa Direct is one of them. Because instead of this complex, slow, unpredictable chain of banks, so with Visa Direct, it gives access to, like, single connection of a global network. And it replaces the fragmented system with a modern and unified one. And it also address the speed issue, because most of our transactions are real-time, or near real-time. And majority on the account rails is, if it's not real-time, it is within one day. And as well as the traceability concern that I mentioned. So, you are able to trace the transaction, you can see the status of the transaction at any time. So, I think that's more or less it on my side. And so, basically, it's about delivering the speed and convenience that the customers are currently demanding without the legacy baggage of old correspondent model is the new world.

Scott Hamilton (Finextra): Thank you very much, Zaynap. I mean, there are some challenges definitely, and VJ, you know, just would get your comments on this. And if you're a banker, an FI of another type, what's most important for you in deploying the strategy to deal with some of these challenges for account-to-accounts, especially when you have multiple regulatory environments you're dealing with around the country? How are end-users really going to measure and value any payment and fraud strategy and the choices involved?

VJ Annan (FIS): I think it's a fascinating time for all the payment practitioners. We are indeed witnessing a paradigm shift where the strategy, technological, and regulatory collaboration is needed to really redefine how global transaction banking is will move ahead. And what we are looking for, it is not just the speed, but the most important thing is how do we build trust and security in the system? Because fraud is definitely becoming one of the biggest challenge which in the my, in the process of our innovation. The question for before us is simple: how do we safely unlock the full potential of instant borderless payment? And if you look at global transaction banking, it is being redefined. Whether it is account-to-account transfer, instant payment rails, tokenized assets. These are definitely challenging the decades old correspondent system. The question is why? Because the point which we just discussed about, speed, transparency, and trust. They, they are now non-negotiable. The old correspondent bank model is no longer working because it was making things unpredictable. And the number which we just heard, it speaks for themselves. We are talking about the, you just mentioned about account-to-account volume increasing 15-fold and cross-border flows to be touching somewhere around 250 trillion. So, it really calls for ultimate convergence. And the challenge before the bank is, how do they move and and evolve from being just the owner of transaction rails to become the orchestrator of data and trust across all the rails? So, if you look at the fundamentals, what exactly is expected from the payment? The payment for the end user, they are looking it to be super. So, if you look at the break the acronym, S stands for speed. They definitely want the payment to be fast. U stand for ubiquitous, because anywhere, anytime they want to have the control with them. They want it to be powerful. They want it to have traceability. They want a lot of information to be there. They want it to be easy to operate. And R stands for reliability, resilience, where the payment really need to be very, very resilient. And they need to be absolutely sure when the payment is being made, it is going to the right recipient. So, if you look at it, the future is not only about moving money faster. It's about moving trust at the speed of light. The questions which are being asked, when the consumer can stream movies instantly, why we need this correspondent banking kind of model to move money across border, which will takes several days and where we do not really know what where the payment is and what what my FX rate would be? So, if you look at it, what is the vision statement for the global transaction banking? Borderless interoperability, that is the most important one. The payment need to be instant, transparent, compliant across all jurisdiction. Trust needs to be embedded in the technology. So, whatever we are doing, it should add trust. It should help bringing the trust in the entire ecosystem. Innovation has to be more human-centric. It should be embedded in the regular scheme of things or the work which the individual is doing. AI, we have to really leverage as the agility engine to bring predictive risk. Make sure that we are more proactive, we are getting more insights. We, we can see AI really dynamically route payments. And last but not the least, tokenization. How exactly stablecoins is going to really make the whole settlement much more fast and bring trust to the system? So, if you look at it, when we are talking about different jurisdiction, your A2A technology isn't designed to be locally compliant by default. A global strategy will fail. So, there are several tenets for making sure that you are your payment is compliant and making sure it takes care of all the multi-local regulatory environment. The most important lever which is today is the universal data standard. ISO 20022 definitely is just it needs to be used so that we can use AML, KYC easily in all the jurisdiction. We need interoperability so that all the modular systems can quickly adapt to the new changes, new regulatory changes which is coming on. The mapping and understanding of the payments, because as we are moving the payment into borderless, you need to make sure that you understand the difference regulation. Whether it is PSD2, whether it is UPI, whether it is FedNow. You need to really understand the difference and make sure that your system is agile enough to handle different regulatory requirements. Risk and fraud controls, because you definitely is something which is keeping every all of us awake. With so much of fraud volume increasing. I think the cybercrime is at its peak. We see ATP fraud. Synthetic fraud. There is phishing. There is so much of new kind of payment frauds we are seeing that it is something which we really need to bring trust in the system so that we we can really be giving a very, very secure system for the users to operate. And with the kind of transaction volume we are talking about, we really need to make sure that the system needs to be designed for multi-currency, multi-rail routing. So, the question with the in front of the bank is if compliance is fragmented, how do you make trust seamless across border? That is where you really need to bring all these tenets together. Make sure that we are able to build the trust because at the end of the day customer doesn't care about the rails. They care about the payment certainty, clarity, and control. So, it is a time for the all the ecosystem in the in the payments to come together and build the system. Because as you look at it, across the value chain there are multiple players who are touching the payment. And everybody needs to take compliance and use the technology to prevent fraud and build the trust in the system for all for all the users.

Scott Hamilton (Finextra): Super answer, VJ. To play on your, your, acronym there. And it's a great time for us to jump in and get, some thoughts from our audience. Let's go to our first poll, which is how prepared do you feel as an organization regarding your current infrastructure to support these 24/7, 365 real-time payments? Are you fully ready or partially, early stages or you haven't yet prioritized? Please take a moment to answer that, that question. We'll come back to it in a second here a little bit here. Oscar, any other thoughts on what you've heard? And the current A2A and pay-by-bank landscape? What are some of the maybe the less well-known opportunities for this new technology from a product and product development standpoint? And beyond traditional methods and financial services, where are account-to-account payments starting to make their mark right now? Any key examples you can share?

Oscar Herrera (GridGain Systems): Sure. We've got, so at GridGain, we have, quite a large customer base that has focused on doing exactly that. Using the platform to bring the fraud processing, the analytics, the machine learning to the actual data versus the other way around. Traditionally, there's been a lot of data movement going around. So, the traditional problem is, I have all this compute, I have all this, these AI ML models, I have fraud detection models, and processing. And now the challenge is bringing the data to those models. And every hop adds latency. Every hop adds the milliseconds. And every hop gives the opportunities for bad actors to, to execute. What our customers have done is they've started using our platform to bring that processing as close to the data as possible. And in a lot of cases on the same, compute node as the data resides on. By partitioning and distributed data, distributing the data across many different, compute nodes. Financial services organizations, banks can then process that data where it lives. If you are a large multinational bank, you can have your data fabric spread across many different, countries, many different continents. And what our platform allows, allows us to do is move the specific, regulations, compliance, GDPR policies to where the data lives. Versus having to move data in centralized databases to individual countries. So, some of the new techniques out there is solving the data gravity problem. Moving compute as close to the data as possible. And having the data, and having that compute, that those processes have regional context. Compared to in the past, a lot of that information needs to be moved across the network and then applied over on during batch cycles at night. Now all this processing can occur at scale in real-time. Allowing you to handle millions of transactions per second across different regional contextes across different, continents without having to move the data around. Therefore, not violating GDPR. Therefore, not violating, privacy policies as you move, country to country. So, a lot of our customers have adopted that technology, that concept of moving processing to the data versus moving the data to the processing, to allow, allowing you to get to near real-time fraud detection, risk analyzing. FX, rate calculating, all within a handful of milliseconds.

Scott Hamilton (Finextra): Novel approach, seems to make a whole lot of sense. And I want to thank you for that, for that, Oscar. I'm kind of curious, VJ, you gave us some pretty deep detail. We're going to show the results of our poll here, and first, maybe any thoughts you have on the results? Looks like right in the middle, partially ready, 50% of the people are partially ready. And we got maybe a third who are fully. And then there's others who are in the early stages or not yet prioritized. Any surprises here?

VJ Annan (FIS): I'll say no, to be honest. Because I think the question is, it is just the foundation. Real-time payment rail is a foundation on which all the value-added services has to be built. It is like a foundation for driving innovation. You have to really look at how overlay services need to be built over it. And the question is whether we have really been able to extract all the potential? I think we still have a way to go. We there are different geographies who are in different stages of maturity of leveraging this real-time payment rails. But the next stage is, how do we really make the payment completely borderless? We have seen some great example where UPI and Singapore payment India, Singapore coming together as a corridor which is taking away the intermediaries. Some of the fascinating stories of UPI or PIX talks about the huge potential where we can really be able to make the payment accessible to everyone. In India, we are talking about 20 billion transactions every month. That is a huge number. And we still see it growing. But the most important thing is making the payment accessible through very, very cheap QR code. Payment has just 10 cents are being made through the QR. The question is, the volume is increasing, but it has been made accessible. So, that is where I feel that we still have to really take the most important, you can say, sacred sauce out of it. How to make it profitable to all the players? Have we been able to monetize the investment that is being made on real-time payment? I think we still have a way, distance to cover. And that won't happen if we restrict it to only the retail payments. That is where B2B has a lot of potential. Cross-border, there is so much of redundancy, there is so much of frictions in the system. There is so much expense being incurred on that. If we are able to build trust, that is a place where we will see a lot of exciting use cases. It is a hub for really making payment profitable for each of the players. Whoever touches the transaction. Because you are not going to make payment anymore by making payments. Nobody wants to pay for making payments. The question is, how do you use the data which is there to really give value to the user and that is what the user expect today? They definitely want value. They want intelligence. If you are having my data, I want my system to tell me, my app to tell me, hey, whether this is the right rail for us? And that is where many of the banks are investing in the multi-rail strategy.

Scott Hamilton (Finextra): That's where AI can come in too, as right, yes, seven agents that are better, better involved here. By the way, we had some questions from the audience asking if, you know, how are we going to do this? I think we've just answered a lot of that, a lot of the, you know, the nuts and bolts questions. You're going to have to parse it out a little based on where you're working. But the agents you design, the, the way that they flow through your system, how they accommodate your compliance needs, fraud prevention, all of these things. This is kind of what we're talking about here, or it's exactly what we're talking about with some of the audience are asking. If you don't mind, I'm going to switch to, and thank you for that, appreciated VJ. When we go to Zaynap, there were, there was one question from the audience you thought you might want to answer. Feel free and then we'll move on.

Zaynap Sayian (Visa Direct): Sure, I don't know which one, because I actually answer all the question on my name. But there is a question about stablecoins, if you want, maybe I can talk more about the stablecoins here.

Scott Hamilton (Finextra): Well, we'll we'll go into that in a bit. I think we'll go into that a bit. There were some questions about the channels that are being used and so forth. You know, we're not focusing in here specifically on one company or their, or their approach or whatever. But the question is, what kinds of channels and models? I'm sure they can get that from you offline, right? You know, and, and all those things we're talking about here. What kind of rails you use?

Zaynap Sayian (Visa Direct): Yes, I already answered the question. There one of the question was about whether Visa Direct work in Europe and which rails it's used? There is a question specifically about SEPA Instant. Yes, as Visa Direct we are connected to SEPA Instant, so we are using it. As well as our own rail network and the Swift connection. And there is another.

Scott Hamilton (Finextra): Yeah, no, that, no, that's great. And one of the things we try to do here is connect people with the people who they can learn from. So, afterwards, feel free to connect with any of our panelists. But it is a good time to talk about where stablecoins fit in. You know, what, you know, what are some of the pain points that are coming up when you start talking about, you know, fraud? You and I spoke before this session about, you know, how fraud fits in, these new applications to old problems. And what, you know, recommendations that, that you can make or that you, you've, you've seen work well for compliance and enhancing fraud protection that you can share?

Zaynap Sayian (Visa Direct): I think I'll start with the stablecoin one because also there was a question in from the audience. So, first of all, I really find stablecoins a fascinating and potentially transformative one. Because if, I think the easiest way to think about stablecoins is, is like a new set of payment rails that is global, right, out of the box. And they promise to deliver exactly what the old system struggled with. So, it's near instant and 24/7 settlement and really significantly low fees. And where we see the adoption the most at the moment, mainly in the emergent markets. Because they are like, almost powerful living labs for this kind of payment innovation. And for the reasons that we know, mostly, currency volatility, high mobile phone adoption and reliance on remittances are main drivers of this change. And as, as we discussed, like, stablecoins are filling the gaps that the legacy financial systems can't. And I think the real question here, so how does a legacy system will interact with the new digital world? Because it's separate at the moment. And as Visa and the players like Visa are building this critical bridges. So, at the moment, we are piloting in two, two different ways. The first one is on the settlement side, on the pre-funding. So, historically, our partners settle used to settle with Visa via traditional wire transfers. So, now we are providing them the option, the flexibility to pre-fund using stablecoins. So, the main difference is that, you know, the traditional one used only works during banking hours and sometimes it's slow, depending on when the transaction is triggered. But with this, pre-funding option, via stablecoins, so now they can use stablecoins like USDC and then settle with Visa in real real-time. And whenever they want. So, this is really, the change the game of our back end. And also it makes settlement faster and more efficient and in 24/7. And the second part is more about the consumer experience. Because if, the stablecoins are the new rails and people need a simple and trusted way to get off those rails, and back into the currency that they spend every day. So, that is the payout piece that I mentioned, which is also powered by Visa Direct, in within Visa. So, we are now piloting with Visa Direct payouts to stablecoin wallets.⁵ So, basically businesses, like think about a global platform or marketplaces, to pay their workers or creators or their users, with a new pay with a, sorry, with a new way in stablecoins. So, if you think about it all together, stablecoin is not a new model replacing the other. So, I think the, the key here is to have a multi-rail and interoperable ecosystem. So that we can ensure that the whole digital ecosystem works for everyone and based on their needs. And the second question, that you asked me is about the pay point, pain points that I am seeing, in the real world, and about the fraud standpoints. So, fraud is definitely a critical topic. And probably the most important conversation in payments right now. And Oscar and as well as VJ mentioned about it as well. So, while we move to the instant payments, and which is great and incredible, it's offers incredible convenience, something that we are enabling services like Visa Direct or other alternative providers. But it also opens the door to new vulnerabilities. And the biggest pain point we see today, by far, is the explosion of authorized push payment fraud, APP fraud. So, this isn't like a classic card fraud that we used to where the criminals steals your details. So, this is really different. And this is even, a little bit, if I may, like, psychologically damaging. Because it's when a scammer tricks you into personally sending them money. And because you, like, as the victim, authorized the payment. So, the transactions are instant and most of the time irreversible. And it really calls, a huge losses from the consumer perspective. So, just to give you an idea of the scale, in UK alone, APP fraud losses were around half a billion pounds last year.⁶ So, we are talking about massive loss here. And the good news is, like, Visa and other companies are developing powerful ways to fight back. And and I think like as Visa, what we think is, if we provide a fast payment rail, it's also our responsibility to make it secure. So, this is why, like, one of the solution that Visa introduced to the ecosystem is Visa Protect for account-to-account payments. So, the idea is simple, to be honest. So, we use data and AI, similar to other providers. But what Visa brings to the equation is that what individuals bank cannot see alone. Because we have the power of the network. So, if you think about it, a single bank can only sees a payment from their customer to another account. So, they have no idea if the receiver account has been part of a scam campaign. Or also, hit five hit by five other banks in the last hour, like things like that. So, but at Visa, we can see this. So, we can, we are able to analyze billions of transaction across the globe. And we can identify suspicious patterns and signals. And we are basically connecting, dots across the ecosystem. So, so it's not just one bank data, but it's a multiple bank and the network data. So, we are using the power of the network. And we do have an incredible proof that works with Pay.UK. So, we did work with them, and our solution successfully detected 54% of fraudulent transactions that had been cleared by banks. And think about it, banks are really have sophisticated detection system. So, it's a, it's a really like massive win on our side. Because we caught more than half of the fraud that was getting through. So, I think this is a testament to the power of the network level view. So, the, the progress has been made there. And and we're we're we're solving some of these pain points. Especially when it comes to fraud. And I want to thank you, Zaynap, for sharing those examples. Because we've had some questions from the audience on examples. I think you've given some good ones there for both stablecoins and also for instant payment in general. And how how the compliance is being dealt with. Oscar, before we run our next poll, any quick questions or thoughts you've seen examples you can share with the audience?

Oscar Herrera (GridGain Systems): So, you know, it it really, the EU started this going back a while back ago. It was about keeping data where it where the owner lives. GDPR continues to be a challenge for customers. Cross, moving data cross-border continues to be challenging for customers. India last year enacted very similar GDPR rules. Very similar rules to what GDPR did in Europe, many years ago now. And we're beginning to see more and more countries implementing those types of rules. So, for us, our ability to localize processing associated with that rule set helps our customers kind of overcome some of those challenges. You can have a single platform have rule, rule processing in India, in in Europe, in the UK, in the US, in North America. All within one data fabric, all talking to each other but not but never sharing that data. So, we can, we can isolate and localize processing and data at the same time.

Scott Hamilton (Finextra): So, this is a complex problem with solutions that are that are available. That certainly can be put together. It's probably not going to help if you have a legacy system that is really, really inflexible, as both VJ and Zaynap have also pointed out. As we move to our results on our poll, we'll go to, to VJ. VJ, you get another chance to weigh in right away. What do you think in terms of organizations' biggest challenge in modernizing systems? And it looks like managing real-time fraud and compliance checks. No big surprise there. But also needing to integrate with the legacy systems. They played right into what I was talking about. But of course, the regulatory mandates, in throughout Europe and elsewhere in the world as well are going to have a play too. Now, one thing I would say about ISO, ISO may end up helping even though it's taking up emphasis in time away, may end up helping in the end. VJ, best practices, cautions you've got from what you've seen so the companies can make the right choices and choose their priorities when they're upgrading their systems. And anything you can share on AI specifically, how it's going to help them both manage now and future-proof their systems in the future?

VJ Annan (FIS): I think the most important thing is the sponsorship and having a clear vision. What do you want to really do? If there is a regulation, you take example of ISO 20022. You just want to be compliant or you really want to take full advantage of it? Because ISO 20022 is all about having so much of information. It is data-rich. But if all your upstream and downstream, your core banking system, your investigation system, your sanction is not able to really take you take advantage of the data which you are having, if they are not really modernized. Then you are just doing a tick mark. So, the most important thing is, how do you want to really progress? And that is where there are, it has to be a difference between being strategic and tactical. Yes, many of the banks, if you look at open banking, have they taken really the might of what open banking can do? I, I don't think so. Still, there are we are struggling to really monetize all the new use cases. And the reason is, all the system, we have not been able to modernize. So, in order for us to really look at how to modernize it, it is all about design. How do you really think about your services? How do you clear and make sure you are nimble and easy to integrate? Microservices-driven architecture, API-based, how easily people can really consume your data and how you can integrate, how you can expose your services? Because today, if you have to be in the ecosystem, any partner can be a competitor. There are different ways you have to really play. You, you, I think we just heard about Visa A2A Protect. We have Mastercard having its own decision intelligence. The idea is, unless all the parties come together and collaborate, we are going to struggle to really compete with the, with the threat of fraud. Because with the real-time payment coming, coming in, with the help of blockchain, the payment disappear in second. It is you've just cannot trace it. So, the important thing is how easily you can really share the data? Whether it is about using things like confirmation of payee, is a great example. How do you share the data together? So, in order for for any organization to successfully modernize, they need to have a very clear mandate what and a roadmap. It is a mindset change where you really need to look at and break your entire system into different services. Make sure that it is nimble. It can integrate. And it is ready for the changes. Because regulations are changing. And with the with the new rails coming in, you have to be prepared. Because every innovation will become a challenge for you. So, unless you are able to really accept the change, whether it is coming from the technology, whether it is coming from the regulation, whether it is coming from some of the new global handshake. You have to be prepared. And that is, I feel that whichever organization have a very clear roadmap, they have blueprinted their capabilities. And they have laid down the foundation. It has to be across all the layers. Your data layer need to be very clearly defined how you want to leverage the data. Your messaging layer, your integration layer. And of course, you have to see how the system is scalable. Resiliency is definitely something which you cannot compromise on. And the most important thing is, how do you use the identity management? Because in order for us to be very, very sure and the payment to be secure. You really need to make sure that you have the right kind of protection built in your system. So, design it right. Make sure that what you are designing, it works. And you have a future forward view of the industry. You need to really think through. You cannot be really just catching up with.

Scott Hamilton (Finextra): Can't be living in the past. Can't be trying to catch up. You got, you got to have it right from the start. You know, it's funny, you just mentioned silos. That was going to be another question we were going to ask. But it actually plays into our final question. Which I want to run by each one of you. And just, just take a minute from each one of you to answer. Because it ties into what you just said. How do you develop these internal champions? And these internal champions are the ones who actually make sure that you do address all the elements you mentioned. That you have a a plan and you follow through for your needs. Not every institution or organization is the same. There's no doubt about it. So, the question really is, what would you prioritize right now regarding putting these goals, these account-to-account payments with AI, with the fraud protection you need, with cross-border implications? You know, if you're going to choose one thing that you're going to do right from the beginning, that key ingredient. I just need a short answer from you, VJ, what would that be?

VJ Annan (FIS): I think security. Payment security. Because speed without security is chaos. Just like innovation without compliance is futility. You really need to make sure speed is important, but you cannot compromise on the payment security. If the trust is broken of the end user, whatever innovation you are bringing in, it will never see the adoption. The reason why Visa worked, the reason why Mastercard worked, because there is trust. So, banks and the payment network bring in trust which is helping the entire financial services ecosystem. And that is the trust which is expected from each of the players, whoever is touching the payment transaction.

Scott Hamilton (Finextra): Thank you. And by the way, that was the very first word you ever mentioned, I think, was trust. Definitely in between you and I. And Zaynap, from your perspective, what key ingredient? What key priority?

Zaynap Sayian (Visa Direct): I, I think I will almost repeat VJ. Because I also believe that, like, without trust, nothing will work. And and as Visa, as he also mentioned, like, trust, Visa is one of the most trusted brands in the world. I think it's, it was ranked sixth. I didn't check the last year, but I, I believe it is still within the top 10. So, that's why, like, we need to emphasize on the security of the transaction. We are already, like, I think improved a lot the speed. So, on the card rails, everything is real-time. On wallet, everything is real-time. And on the account, we are improving the percentage of the network where we are able to provide in real-time transactions. But everything needs to be layered by security and non-fraudulent transactions. So, I would almost repeat the same thing.

Scott Hamilton (Finextra): Awesome. Well, thank you for that. And Oscar, you get to take us home here. Your thoughts? What's the key ingredient? The key priority?

Oscar Herrera (GridGain Systems): I would, I would echo my colleagues' statement. I think security is front and center for everyone. But what I would also add would be resiliency. Whatever platforms we're moving to have to stay up and running at whatever scale they need to. Right, we can no longer. If we are in a 7x24, 365 payment world, real-time world. Systems have to stay up. There's no time for downtime. There's no time for taking systems down for upgrade. Every, every moment, every second, every hour that something is down gives a bad actor an opportunity to compromise a transaction, a system, a payer, a customer. So, I would add in addition to security and trust, it would be resiliency. Up and running all the time, 7x24, 365.