How Banks Can Solve Commercial Payments Pain Points

Banks are moving beyond basic payments connectivity toward better data, greater visibility, flexible infrastructure and intelligence across the commercial payments lifecycle.

Commercial payments modernization has moved beyond connecting to new payment rails. Banks now need better data, end-to-end visibility, and adaptable infrastructure to make faster, more accurate decisions across the payment lifecycle.

Banks, PSPs, and fintechs now operate in an environment where payments move faster; customers expect greater transparency, and each transaction carries more information. Institutions must use that information to make better fraud, compliance, and routing decisions without creating friction for legitimate payments.

It’s becoming less about whether an institution can connect, and more about what it can do with the information flowing through those connections.

That shift is central to Bottomline’s newly released study, The Payments Intelligence Gap. In a recent interview, Edward Ireland, Product Director, Financial Messaging, and Natasha Lapierre, Principal Product Manager, discussed the operational problems identified by the research, and practical ways institutions can address them.

 

Modernization Now Encompasses the Full Payment Journey

Solving today’s commercial payments pain points requires a broader view of the payment lifecycle and infrastructure that can change with it. That idea framed the discussion.

Going on 10 years ago, Ireland said, modernization typically meant establishing connectivity to emerging payment schemes. Banks have made enormous progress on that front. Today, the challenge extends further into the transaction itself.

“Modernization today is really looking at the full payment journey,” Ireland said.

That means being able to answer important questions before a payment is initiated, understanding what’s happening while it moves, and confirming what occurred after settlement. Achieving that level of control depends heavily on the quality of the information available throughout the process.

Ireland pointed to a finding in The Payments Intelligence Gap that 65% of respondents identified structured data quality as their biggest challenge. The significance goes well beyond cleaner payment messages.

“It’s very difficult to know if you’re paying the right person, or what the payment’s about, or whether you should be stopping or forwarding that payment if you don’t have access to good data quality,” he said.

Better data is therefore foundational for better decision-making. Fraud controls can become more precise. Compliance teams can make more informed judgments. Operations teams gain a clearer view of payment status, while customers receive more useful answers as to where their money is.

The research shows where that gap becomes most consequential: 44% of respondents identified mid-transaction fraud detection as the payment lifecycle’s biggest security weakness. The finding reinforces the need for stronger data and earlier decision-making, both before a payment is released and while it is moving.

 

ISO 20022 Creates the Foundation for Greater Intelligence

The global transition to ISO 20022 has played a vital role in creating a richer information environment. However, Ireland cautioned against assuming that adoption of the standard automatically produces business value.

“ISO 20022 in itself doesn’t drive value, but it creates the opportunity for value,” he said.

That opportunity depends on how institutions approach the data. Treating ISO 20022 primarily as a translation and compliance exercise may satisfy a mandate, but it leaves much of the potential untapped. A more strategic approach uses structured data to improve how payment information is stored, processed, and applied across different payment environments.

That becomes particularly important as banks, PSPs, and fintechs support a broader range of payment methods. A strong internal data foundation makes it easier to adapt without rebuilding processes around every new requirement.

Richer information can also improve straight-through processing and help reduce false positives while giving fraud and compliance teams more context for their decisions.

The report shows the downstream impact. While 38% of respondents named higher straight-through processing as ISO 20022’s most valuable near-term use case, 29% prioritized more efficient investigations, and 24% pointed to fraud and sanctions screening.

“You’ve got to see ISO 20022 as an opportunity, not as an obligation,” Ireland said.

 

Agility Matters More Than Predicting the Next Big Rail

While Ireland emphasized the importance of data, Lapierre focused on the architecture needed to use it in a market that refuses to stand still. “The keyword is agility,” she said.

Payment providers are navigating a landscape in which new services, data sources, and settlement models continue to emerge. That makes it difficult, and arguably unnecessary, to predict precisely which technologies will dominate several years from now.

“The payments ecosystem is fragmenting more than it is consolidating,” Lapierre said. “The winners are not the ones who make the right bets from the very start, because no one has a crystal ball. It’s those that choose an infrastructure that is made for change to be seamless and continuous.”

For Lapierre, that places API-based architecture and interoperability at the heart of modernization. Banks need to be able to incorporate new information sources and capabilities without turning each addition into a major integration project.

The principle also extends beyond the payment message. Different external data providers may return information in different formats or use different scoring models. Institutions still need a consistent way to interpret those signals and apply them to payment decisions.

The goal is not uniformity for its own sake. It's the ability to absorb change without creating operational chaos.

The research supports that emphasis on adaptability. Half of the respondents dubbed "Payment Pioneers" reported good or excellent agility when integrating new payment solutions, compared with 7% of other institutions. They were also more likely to collaborate effectively with peers, providers, and regulators, 42% versus 13%.

 

Making Better Decisions Before the Payment Clock Starts

Faster payments have changed another part of the operating equation: institutions have less time to make decisions once a transaction is underway.

Lapierre said this should push more intelligence toward the start of the payment journey: “How can I bring more of that decision-making process before I even hit send?”

That question gets to the heart of how payments intelligence can solve a longstanding tension between speed and control. The objective is not simply to process decisions faster after a payment has been submitted. Banks can use better data earlier, allowing verification, fraud analysis, and compliance to occur before speed becomes a constraint.

That approach improves the experience for legit transactions because fewer decisions need to be made under pressure once the payment is moving. It also gives institutions more opportunity to identify exceptions before they become operational problems.

Earlier intervention also addresses late-stage failure. The report notes that formatting errors, missing fields, and incomplete addresses are often found only after submission, triggering investigation, repair, resubmission, and delay. Validation and enrichment before initiation can prevent that operational drag.

Bottomline’s Global Pay Connect solution is designed around this broader modernization challenge by bringing payment connectivity, processing and related services into a more unified operating model. Ireland described the objective as establishing “very strong governance and operational process around how you manage schemes in a single platform,” while retaining the flexibility to support additional capabilities as markets develop.

 

Treating Payments as Intelligence

The most important change noted may be in how institutions understand the payment itself: not simply as an instruction to move money, but as a source of information that can improve decisions across the organization.

“The greatest opportunity that I see is to start treating payments as data intelligence and not as one line of code that delivers a payment to another institution on behalf of the customer,” Ireland said.

A payment contains far more business value when an institution can understand its purpose, counterparties, expected timing, and settlement status. That information can serve multiple parts of the organization while giving corporate customers the transparency they increasingly expect.

Lapierre brought the discussion back to execution. Banks already have access to many of the technologies reshaping payments. The question is how to incorporate them into existing systems in ways that create practical value. “It’s about moving from thinking to doing,” she said.

That is also the larger challenge surfaced by The Payments Intelligence Gap. Modernization doesn’t end with the next mandate or the next successful connection. Institutions need to gauge whether their data is strong enough to support better decisions, whether they can see payments end-to-end, and whether the infrastructure they're building today can accommodate a payments landscape that will continue to change.

Get Your Copy of The Payments Intelligence Gap study here