The Payments Podcast from Bottomline. 

Episode Transcript

Owen McDonald (host):
Welcome to The Payments Podcast. I'm your host, Bottomline Managing Editor, Owen McDonald. Digital banking, financial messaging, and B2B payments overall are awash in complexity. But a new year brings renewed optimism about a more streamlined future.

Delving into the trends of 2026 and perhaps a bit beyond, I'm delighted to have Bottomline's Jessica Cheney in North America and Vitis Rotzer in Europe joining us today. Jessica Cheney, Vitis Rotzer, a warm welcome back to The Payments Podcast.

Vitus & Jessica: Thanks, Owen.

Owen McDonald (host): 
Okay. Let's dive straight in. Many banks are lagging in real-time payments despite having complied with the ISO 20022 November deadline. Industry voices are saying we need to quickly move past that milestone and start selling the added value of ISO 20022. What are some of the value added services banks should prioritize in 2026 using new ISO messaging capabilities? Jessica, let's hear from you first.

Jessica Cheney: 
Yeah. Oh, and I think the truth is ISO 20022 compliance didn't make anyone more competitive. It just kept them from being left behind. In reality, ISO compliance was the easy part. The real challenge is monetizing it.

The opportunity isn't in the format. It's in the data and the intelligence around that data that it unlocks. Banks should be looking to automate reconciliation, predict liquidity, and deliver smarter, faster, cheaper payments now that we're all on the same ISO playing field. The next phase about ISO isn't about the messaging. It's about monetizing those insights.

If banks don't build that layer, fintechs will. So if you're not selling insights going forward, you're just selling the plumbing.

Owen McDonald (host): 
Right. Vitus, your thoughts?

Vitus Rotzer: 
Can I can add to that that, effectively, ISO 20022 has evolved from a regulatory milestone to a strategic level for growth? It's richness of data, enables banks to deliver faster payments, automate compliance, and unlock new revenue stream, but they have to do it. And it's true that the former will not do it by himself. So we have a few examples, but you just mentioned a few, Jessica. The reconciliation, the embedded API or B2B payment and API monetization by banks should be accessible via API for their partners. Otherwise, fintech will take their place.

Fraud detection is certainly also something where they can invest. This will not monetize, but it will avoid [banks] losing a lot of money. This is another critical area where ISO can help the banks to enhance the fraud detection.

Jessica Cheney: 
Yeah. And I think I'd add one more example, and it's on real-time. Owen, that won't surprise you at all that I'm going to talk about real-time payments for a second! The ISO format is the plumbing for real-time payments in the US. The monetization and the icing on the cake is the fact that the format allows for conversational payments. That's the the transition we need to make in '26.

Owen McDonald (host):
Conversational payments. I have a feeling we're going to be talking more about that as the months roll by. Moving on, a lot is riding on making cross-border payments faster and safer in 2026. I'm going to stick with you for a minute, Vitus. What are expectations around CBPR plus now that ISO 20022 has moved off legacy messaging? What improvements will users notice early on?

Vitus Rotzer: 
The global payment is clearly entering a new era of speed and transparency. And with CBPR+ completing the ISO 20022 migration, banks can achieve near instant settlement, automate compliance, and get full visibility across borders. In terms of speed, you have the last mile that can be now covered with instant payments depending on the region. You don't have this transformation to be done, because everyone is on CBPR+. So we are at the end of this transition period. That will also speed up the process.

You have structures like GPI to help you track where the payment is. That will also remove some friction and and increase speed. I also mentioned the safety, which has nothing to do with speed, but the fact that you can check payments avoids errors and avoids [having] to resend and to check and control. So all this will enable banks to reach the G20 goals and its objective for faster, more secure, and more inclusive payments towards 2028.

Jessica Cheney: 
I have just a bit of a thought on this that I want to share. I think the real disruption in cross-border payments is when they stop feeling like they're cross-border. When banks and other parties treat international payments like they treat domestic ones, consumers have that expectation. So I think when we stop talking about cross-border payments and we just talk about global payments - that is where the industry should go.

Owen McDonald (host): 
That's an excellent point. 
Embedded payments are expected to make big gains in 2026. Jessica, this [question] is for you. How can banks and FIs partner more effectively to scale embedded business payments next year?

Jessica Cheney: 
I'll start with a few comments about embedded payments in general. Embedded payments are not a feature. They're a bank survival strategy. Banks that cling to legacy solutions being provided on their bank branded websites are going to be outpaced by fintechs. Embedded payments are forcing banks to decide who they want to be, a platform, a product, or just plumbing.

The payments infrastructure is an enabler, but the mindset is the real barrier. Banks have to start treating APIs and ERP partners like distribution channels, and they need to focus on compliance as a competitive advantage. You know, really, they need to answer the question, 'Do you want to be the ecosystem, or do you want to sit invisibly inside it?' Both of them are viable strategies, but pretending that they can't make a decision about, or don't have to make a decision about, this at this point in time is really not a situation they can continue. They have to make a choice and decide which path to go down.

Vitus Rotzer: 
Can we say, Jessica, that they need to put basically payment at the front door of everything they do up to towards the top of the chain somehow?

Jessica Cheney: 
Yeah. I think that's absolutely right. That's what they need to decide, Vitus, is where they want their brand. Is their brand going to be associated with being a payments powerhouse, or are they just wanting their brand to be associated with being the plumbing that supports payments?

Owen McDonald (host): 
There's a lot to think about there!
Bank consortia sharing data isn't necessarily a new idea, but there are new areas where banks need to start sharing data to assist the wider payments ecosystem in preventing fraud. Will this become a bigger priority in 2026? Vitus, please take it first, and then I'd like to hear Jessica's point of view.

Vitus Rotzer: 
I think it has to be, because if fraudsters are leveraging more and more AI, they are leveraging a multi-bank approach - so they are checking on multiple banks. And if you remain in a silo approach, protecting yourself within the bank only and without taking into consideration the whole ecosystem, you're going to fail. So first, you need to use AI to protect yourself, to improve your systems. And secondly, I think the ecosystem needs to combine knowledge, share data, and protect themselves as a whole. It's like animals. They put themselves in groups basically to protect themselves. You will see the same effect.

Jessica Cheney: 
I could be a little bit more blunt about this! Right? Fraudsters already sharing data better than our banks do. Right? We need to change that!

If we can't create or be part of a consortium exchanging real-time fraud then, you know, we've got a real problem. Privacy concerns cannot be an excuse. We need to take advantage of federated learning and tokenization to support the privacy concerns that we have, yet being able to share data in a very, very needed consortium. If we don't, the fraudsters are just going to continue to own the space. And it's a little sad that we know the solution to this is to continue to share data across institutions, but that we [still] need to break down those silos, and we need to do it without having a regulatory push to do it.

Vitus Rotzer: 
It's true that banks have a long history of trying to protect the data and the privacy of data. So it's a long way to go for them, but it's a necessary journey that they have to do, definitely.

Owen McDonald (host): 
That's right. We all have to change in this environment. Jessica, from greatly enhanced chatbots to automated loan approvals and fraud detection, AI and automation are creating new opportunities for banks. Where should banks focus AI and automation efforts for B2B payments next year, and why, Jessica?

Jessica Cheney: 
Yeah. I think that now is the time for us to really think about this, but think about it under the context of 'AI isn't about replacing people, it's about replacing inefficiency'. And it's also an area where we need to not get crippled by the art of the possible and ignore the table stakes and the easy things that we should focus on, like using AI to eliminate manual reconciliation, deal with automated onboarding, ideally.

We get very comfortable with allowing AI to do predictions around cash positioning, you know, providing answers to the questions that treasurers have every day. And we know what those questions are. So it's not something that really needs to be, 'from the future'. These are things that we know today and have the technologies to be able to incorporate into solutions. That's why I really think we need to start with AI.

Owen McDonald (host): 
Vitus, a few words on AI?

Vitus Rotzer:
Is it still a question? Can we avoid AI? I think it's becoming very complicated. And there are many, many opportunities that we can leverage AI for - we really need to go into it. It's a productivity improvement across all companies, including our banks.

It can bring added value. And I agree with Jessica. It's not about replacing people. It's really about enhancing, being faster and more productive, and having time to do something else where we can automate with AIs, get more creativity. I would encourage any and all the banks and providers to really jump into it and to positively jump into it.

And this is maybe the the most important aspect. It's not a threat. It's an opportunity. And we need to see it like that.

Owen McDonald:
Okay. Last question. It's about AI again, but hard to avoid. AI is a game-changer for the fraud underworld. Deepfakes and account takeovers are already stealing billions. Commercial quantum computing is only four years away. These technologies in the hands of criminals is a very serious situation. How can banks and FIs combat this new breed of fraudster while balancing data privacy regs? Vitus, please take this first, and then let's hear from Jessica.

Vitus Rotzer: 
It relates a little bit to the previous question. So first, you have to jump into AI, you have to understand it and you have to leverage it. So I would also adopt, for a bank, a multi-layer approach to fraud. First and immediately, making sure that all the different layers are covered with multiple solutions including AI into the scheme.

Then we spoke about the consortium. So a collaborative approach to protect themselves is key and is very important. It will not work without that. 

And finally, quantum safe encryption is coming, as you mentioned, but we still have four years. So we also have four years for the banks to anticipate this, having cryptography and going much further in encryption than what we have today - the one that's first will unlock the key. Definitely.

Jessica Cheney: 
Absolutely. You cannot fight fraud-oriented situations today without AI. The fraudsters are using AI, so you need to use AI to protect yourself against them. If not, you know... what's that proverbial saying?... you're taking a knife to a gunfight!

So it's really something that people need to take a step back and think about. The fraudsters are certainly collaborating. The banks need to collaborate. And we need to collaborate in terms of the technologies that we're going to use in our defenses - just as much as they are collaborating in the technologies that they're using in their offensive. So I really think that's when we'll actually turn the tide on preventing some fraud. You know? Right now, we're in a back foot position in dealing with fraud. We're not truly preventing it on a large scale.

Vitus Rotzer: 
Yeah. And maybe a last comment on that is to collaborate with regulators. This has to be combined. In the ecosystem, we need to include the regulators that should facilitate all this. Otherwise, if they are blocking data privacy and exchange of data, it will be much more complex. So we need to include them into this reflection.

Owen McDonald (host):
There we have it. There are pivotal years in business payments. We think 2026 will be one of those years. We urge you to listen again to this 2026 Outlook chat and adjust plans accordingly. A huge thanks to our guests, Jessica Cheney and Vitus Rotzer.

To our audience, the smartest people in B2B payments, thanks for listening. Hit subscribe. Catch us again on your favorite podcast platforms, including Apple, Spotify, Blueberry, iHeartRadio, and YouTube. Bye for now. 

The Payments Podcast, from Bottomline.