The transformative technologies unleashing a new unified financial era

Nick Botha, Global Payments Lead at AutoRek

The payments industry is on the brink of a new financial era, driven by breakthrough technology, evolving customer demands and shifting regulations. Despite this, many organisations are struggling to keep up, especially when it comes to  data interoperability, infrastructure limitations and leveraging the potential of their data. With 86% of firms lacking data quality required for accurate reporting, one thing remains clear – there is a significant gap in the industry’s understanding of data capabilities.

To bridge this gap, greater education surrounding the benefits of implementing innovative technologies could allow firms to enhance data sharing, security and reconciliation processes. AI and machine learning in particular can streamline the reconciliation process by extracting relevant data fields, reducing complexity and operational costs. As a result, in the long term, organisations will begin to see an increase in their margins.

What is ISO 20022?

While the transition to ISO 20022 is transforming the future of financial messaging and cross-border payments, the standard presents both opportunities and challenges for payment firms.

According to Capgemini’s World Payments Report 2025, industry initiatives like ISO 20022 and Swift GPI are streamlining digital domestic and cross-border transactions, making them faster, cheaper and more transparent.

However, there is a common misunderstanding that ISO 20022 will simplify reconciliations, whereas in reality, it actually introduces more data to manage. This means that for effective implementation to take place, a robust infrastructure and consistent processes are required. In addition, external vendors must also be interoperable and scalable. Only then can the real benefits of ISO 20022 be experienced.

Automating reconciliations with ISO 20022, can optimise matching processes, reduce costs, and boost profitability, provided organisations invest in scalable technology and interoperable systems.

The importance of real-time payments

The concept of virtual accounts offers the illusion of instant payments, but true settlement is often delayed due to complex processes. For accurate financial reporting and higher client satisfaction, reconciliation processes need to evolve to match payment timelines in real-time, minimising unnecessary delays.

Capgemini’s World Payments Report 2025 reveals how inefficient cash management practices such as poor forecasting and a lack of visibility can result in costing businesses nearly as much as 7% of revenue annually, translating to billions of dollars in trapped liquidity.

In contrast, the adoption of instant payments and open finance can hold transformative potential to revolutionise accounts payable and receivable processes. By providing real-time cash visibility, these innovations can drive operational efficiencies, enhance decision-making speed and provide the ability to keep up with competition.

As a result, to thrive in the evolving landscape, leading firms must embrace open finance and instant payments. This proactive approach enables them to drive innovative value propositions and meet the changing needs of customers and businesses.

The impact of open banking

While open banking has made it easier for financial institutions and external parties to interact more seamlessly, corporate banking Application Programming Interface (APIs) are still not as advanced as those in retail.  Even though corporate banking APIs are becoming more available and accessible, they still need greater global presence and coverage for reconciliation as a service to become more widespread. Until this happens, corporate banking APIs will continue to lag behind those in other industries.

Undeniably, the impact of open banking on the payments space is significant as it empowers the creation and sale of new data-driven financial services, leads to better customer experiences and simplifies and modernises traditional banking processes. However, open banking also has its challenges, and these cannot be overlooked. In fact, the sort of challenges that open banking brings include, non-standardised APIs, little control over data use and sharing and the lack of incentives to share bank data with third parties.

With this in mind, further work is needed to bridge the gap between the challenges and benefits of open banking.

A unified approach to technology and collaboration is critical

With further technological advancements on the horizon, the payment landscape is unlikely to be revolutionised by one single piece of technology.  Instead, the future of payments depends on the seamless integration of varying technologies that address the increasingly evolving market demands.

To stay competitive, businesses must therefore pay particular attention to instant payments, open banking, API challenges and the transition to ISO 20022. By adopting a unified approach that combines technological innovation, regulatory framework, and advanced data analytics, businesses will be in a  much better position to streamline the reconciliation processes, allowing for a significantly enhanced overall customer experience.

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