Innovations in domestic retail payments have advanced at a gravity-defying pace in recent years, driving previously unimaginable improvements for consumers. The idea that cross-border payments can be as seamless and convenient as domestic ones are becoming a reality. 
As payment systems continue to modernize, the overall customer experience will continue to improve, ushering in a new norm. 

So, What will that norm look like?

With goods and services moving more quickly and across greater distances than ever before, corporates are now increasingly demanding the same experience for their international payments. 
                 Friction-free value transfers are no longer ‘nice to have’.

Cross-border payments will be instant

The advent of real-time domestic payments and 24/7 central bank settlement has been a major catalyst in the transformation of cross-border payments. The industry is reconceptualizing how quickly cross-border payments can be delivered, using new technology, common standards, and improved service level agreements. The speed of transactions will continue to increase as more and more banks move away from batch to real-time processing. 

With enhanced transparency on payments, banks will have greater insight into how fast their correspondents' process transactions. Driven by an increasing number of markets moving to real-time and pressure from their own customers, banks will either speed up or have their business move to correspondents with faster processing capabilities.

This movement will drive banks to extend the working window of backend operations, no longer limited to office hours, 24/7 processing is fast becoming the norm.

Cross-border payments will meet the needs of all

The success of any payment product is dependent on the depth and breadth of its adoption. And there are only two key elements to deliver this.

1. Ability to track cross border payments using a single standard, irrespective of the bank handling the payment. This tracking should include the FX information to ease reconciliation, transparency of fees to boost customer experience. 

2. A confirmation that the funds have been credited to the end beneficiary account on all transactions.

This standard is SWIFT gpi, a revolutionary standard for cross-border transactions embraced by thousands of banks to send cross-border payments fast, transparent, and trackable from end-to-end.

Source - SWIFT

Cross-border payments will be smart and open.

Enabling and maintaining the openness of the cross-border payments system is the fundamental requirement for efficient workflows. 

Hence, building an ecosystem in which banks can differentiate their offerings while delivering innovative products is the key. This is possible with enhanced usage of layering services and APIs. 

ISO 20022 is the driving force in making this happen, opening the door for a tectonic change in the way wholesale payments are made. This standard in terms of common language will drive straight-through processing for financial institutions, which in turn means more streamlined and cost-effective payments. 

This shift will enable fintech and other players to add and create their own additional value by offering new innovative payment services.

Cross-border payments will be future proof (for a while)

With a common purpose, common language, and open standards, the correspondent banking community will be ready to embrace new challenges. 
This will be pivotal in fraud and compliance, regulation is not likely to go away; in fact, the eye of regulators will more likely focus even more closely on the flow of money across borders. Information sharing, raising control levels, and developing ever-more sophisticated tools and capabilities, will be key in meeting these demands. 

Increased and better use of data, along with new powerful technologies such as artificial intelligence and machine learning, is already improving screening algorithms and reducing the number of false positives in areas such as sanctions screening. 

As better data become available, manual intervention will reduce even further, and as a result, so will the cost of compliance.

We at Nth Exception collaborate with Banks and Financial Institutions to analyze, solutionize, and optimize cross border payments processes. To complement our services and product we have partnered with companies in the payments space to deliver best in class payment solutions delivered by our partners.