Radha Survana, Chief Product Officer at Finastra
Global commerce and digitalization have transformed cross-border payments into a critical capability for banks. Customers now expect transactions that are instant, transparent, and cost-effective, which places modernization at the center of strategic priorities. The market is evolving rapidly, driven by international trade, the emergence of cross-border alternatives, and new technologies. Banks that fail to adapt risk losing ground to agile fintech competitors who are setting new standards for speed and convenience.
The forces driving modernization
There are many forces reshaping the cross-border payments industry today, creating both challenges and opportunities for banks. Partnerships between traditional institutions and fintechs are becoming increasingly common, as they allow banks to leverage their scale, regulatory expertise, and established trust while benefiting from the agility and customer-centric innovation that technology firms bring. These collaborations are helping banks deliver faster, more intuitive payment experiences that meet rising customer expectations.
Emerging technologies such as blockchain, digital assets, and stablecoins are also driving transformation. They promise near-instant settlements and significantly lower costs, but their adoption is tempered by regulatory uncertainty and interoperability issues across jurisdictions. Meanwhile, current payments systems pose challenges. Built for traditional rails, these platforms often limit the flexibility and speed required today, resulting in slow processing times, limited transparency, and high operational complexity. Those payment solutions must be modernized to overcome limitations by introducing microservices based modularization, AI based automation, real-time data exchange, and scalable architectures that create a foundation for sustainable growth and innovation.
Why modernization matters
Modernizing cross-border payments is not just about keeping pace with technology; it is about unlocking tangible benefits for banks and their customers. Operational efficiency is one of the most immediate gains. Automation and straight-through processing reduces manual interventions, minimizes errors, and simplifies complex workflows. Modularized platforms allow banks to onboard new payment mechanisms quickly, supporting diverse options such as digital assets, cross-border instant payment schemes, and fintech integrations.
Customer experience is another critical area. Today’s customers demand speed and visibility. Modernized systems enable real-time tracking, transparent pricing, and intelligent routing that optimizes payment flows. These capabilities can help banks compete with fintechs by offering superior service and flexibility – while retaining trust and resiliency. Beyond efficiency and experience, modernization also drives financial inclusion. Affordable cross-border solutions empower small businesses and underserved communities to participate in global commerce. According to the World Bank, faster digital payments can stimulate economic growth and inclusion, particularly in developing regions.
Technologies powering transformation
Several innovations underpin this transformation. The migration to ISO 20022, a global messaging standard, enhances data quality, compliance, and interoperability across payment systems. Cloud-native and SaaS platforms deliver scalability, cost-efficiency, and rapid deployment, enabling banks to modernize without the heavy burden of on-premises infrastructure. Solutions such as Finastra’s Payments To Go and Global PAYplus exemplify this approach. Open APIs and microservices further enable seamless integration with domestic and international payment rails, creating contextual, real-time payment experiences that meet customer expectations.
Strategic levers for competitive advantage
Modernization offers banks three strategic levers for competitive advantage. First, it enables innovation and enhancement of end-customer value. By embracing emerging cross-border payment rails, including digital assets and cross-border instant payment schemes, banks can reach new markets and customer segments. Partnerships with global players such as Visa and Mastercard can further enhance reach and agility.
Second, modernization allows differentiation through superior solutions. Smart routing capabilities optimize settlement routes based on cost and speed, reducing latency, and improving reliability. In a market where service excellence drives loyalty, these features are crucial. Third, modernization strengthens compliance and resilience. AI-powered tools can now enable real-time fraud detection, anti-money laundering screening, and identity verification. Aligning with ISO 20022 and adopting modern technologies ensures security, regulatory adherence, and operational resilience.
Modernization as a strategic asset
Cross-border payment modernization is no longer an operational upgrade; it is a strategic lever for growth. By partnering with fintechs, banks can combine regulatory strength with innovation, expand into new use cases, and deliver customer-centric solutions at scale. Platforms like Finastra’s payment hubs consolidate domestic and international payments into a single, configurable system, reducing complexity and supporting intelligent routing.
In today’s competitive environment, modern payments are a key differentiator. Banks that embrace modernization will not only meet customer expectations but also unlock new revenue streams, enhance financial inclusion, and secure long-term success in the global payments ecosystem.
