The pivotal trends redefining the payments world | Interview with EY Canada

Wednesday 23 November 2022 08:05 CET | Editor: Oana Ifrim | Interview

Diana Halder from EY Canada discusses the most influential areas impacting payments today, including Open Banking, real-time payments, cross-border payments, BNPL, embedded payments, and CBDCs


Diana, can you please introduce yourself and your professional background?

I am EY Canada’s payments practice leader with over 18 years of experience in the payments space. As a practice leader, I work with the local and global leadership to help define our Payments strategy.  This strategy informs our go-to-market offerings, our talent recruitment and growth, as well as our alliance partnerships and thought capital development, to list a few of my responsibilities.    

Could you please elaborate on the key trends that are redefining the payments world? 

There are several major payments trends that are redefining the payments landscape, some occurring in the near term while others are still 10+ years out.  Our report, The rise of PayTech – Seven forces shaping the future of payments, outlines the level of innovation enabled by PayTechs across the most influential areas impacting payments today: Open Banking, real-time payments, cross-border payments, Buy Now, Pay Later, digital wallets and super apps, embedded payments and central bank digital currencies (CBDCs) and digital currencies. While the pace of adoption, scale and impact of these individual forces may vary across markets, each one signifies fundamental change and opportunity.

Additionally, I would like to elaborate on two more trends I believe will impact the industry: 
  • The convergence of high value and low value payments onto a single real-time network: With higher limits, greater value-added services such as RtP, Fraud and the interoperability of the networks and message standard (e.g. ISO20022) this convergence is inevitable.  We are already seeing evidence of this with SWIFT and the traditional card networks like Mastercard. 
  • Social media companies will be the next channel for payments:  Social media platforms are already putting in place a mechanism to move money across their ecosystem.  For example, some social media platforms allow their content creators to receive payment for specialised content, funds from their followers or patrons and viewership credits that can be redeemed for cash. Given the transactional volumes, it logically follows that these companies will bring in-house payments processing by applying for MSB licenses, while standing up their own payments processing technology and operations.  


Which payments-related trends stand out for you lately?

The payments trend that stands out to me in the near term, is the growth of value-added services (VAS) on real-time payments. VAS such as real-time fraud monitoring and scoring, liquidity management and request to pay, etc., will likely be the next battleground for payments service providers, banks and fintechs. With 43% of Canadians stating that COVID-19 had changed their payment preferences to digital and contactless for the long-term, and 48% paying their bills through online banking or pre-authorised debits (PAD), it’s clear that financial institutions must prioritise the successful execution of their payment modernisation journey to remain competitive.


The economy is facing massive disruptions (inflation, great resignation). When it comes to payments, how are customer needs changing and how can fintechs help? 

Advances in technology, changes in regulations, new competitors and increasing customer demands are transforming financial services and creating a new digital ecosystem. Enabled by technology, it is becoming increasingly easier to bring together the capabilities of the incumbent institutions and the strengths of the fintechs. This will result in financial services at lower cost, higher speed and at a better quality to more consumers. Based on our thorough understanding of the market and customer demand, we believe that a well-functioning fintech ecosystem is built on four core attributes: 

  • Talent: The availability of technical, financial services and entrepreneurial talent
  • Capital: The availability of financial resources for start-ups and scale-ups
  • Policy: Government policy across regulation, tax and sector growth initiatives, including the presence of digital public infrastructure to facilitate financial services innovation
  • Demand: End-client demand across consumers, financial institutions and government
To support their customer base’s need to maintain financial health, financial institutions must understand that there is no one-size-fits-all approach to financial wellness. Institutions must examine the unique challenges facing a diversity of the demographics they service, as well as how the past few years of massive disruption have impacted each group differently. Only then can they offer an adequate and personalised solution.  In recent years, financial institutions have made huge investments in products and services that should aim to bring better financial well-being to all. But financial well-being is not exclusive to those 'financial moments' when consumers make purposeful decisions on their finances. It is driven largely by everyday behaviour and decisions. Now, strongly motivated by innovative competitors, financial institutions have an opportunity to leverage data and technology in new ways. To do this successfully means providing an outstanding experience, where ‘good’ financial behaviours are suggested without people having to engage in a lengthy process with their financial institution. 


How can banks stay relevant as customer preferences and needs change?

Banks can stay relevant by proactively providing services to their customers, while leveraging their trusted brand positions to provide contextual and timely services well before the customer asks or needs. Banks have access to vast amounts of data that reside within their four walls – they need to analyse the data to look for signals that anticipate or forecast a client’s next action.  For example, providing cash flow forecasting lets their clients know when they are going to get into a cash shortage situation well before the problem occurs – alternatively routine cash surpluses could result in a recommendation to increase investments or pay -off debt at a faster rate.  In short, banks can become more proactive to better anticipate the needs of their clients, (consent provided of course).

About Diana Halder

Diana is a visionary leader with a proven track record of leading transformational change in complex environments. She is an executive with over 18 years in payments, banking, and technology delivery. Her work focuses on strategy design and execution across retail and commercial payment initiatives. Diana has a Bachelor of Commerce from the University of Toronto and believes that payments is a key enabler of digital commerce and financial inclusion. 


About EY

EY exists to build a better working world, helping create long-term value for clients and society. Enabled by data and technology, diverse EY teams work across assurance, consulting, law, strategy, tax and transactions in over 150 countries. They ask better questions to identify solutions to complex issues facing our world and help clients grow and transform their businesses.


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Keywords: Open Banking, real-time payments, embedded finance, CBDC, digital wallet, super app, cross-border payments, financial inclusion, BNPL, ISO 20022, financial institutions, banks
Categories: Banking & Fintech
Companies: EY
Countries: World
This article is part of category

Banking & Fintech


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