The Payments Podcast Transcript

Ed Adshead-Grant: I want to welcome you all to the Bottomline Virtual Media Roundtable. We have a wonderful panel gathered today to help us out on that little train drive across the new data here.

So, by way of introduction and to be brief, given we only have the hour today with you, we have with us Marion King. Marion was the former CEO of VocaLink, President of MasterCard UK, and more recently Director of NatWest Payments, one of the largest franchises in the UK for payments and is here today as the Chair of the Advisory Board for the Payments Association. So, great to have you with us, Marion, thank you for joining this launch of the seventh edition.

We also have Charlotte Crosswell with us today, former CEO of Innovate Finance, a key contributor to the Kalifa Report and FinTech UK, and currently the Chair and Trustee of Open Banking, which has gathered a lot of interest around the market and appears in the report this year. So, welcome, Charlotte, and thank you as well.

Charlotte Crosswell: Thanks, Ed.

Ed Adshead-Grant: And my colleague James Richardson from Bottomline, who has run a number of businesses across accounts payable, accounts receivable, treasury in the business payments domain, and more recently took on a lot of the fraud areas, things like the SWIFT Customer Security Programme, Confirmation of Payee, sanctions, and transaction monitoring, etc., which has some good exposure in the report as well. So, thank you, James, for joining us today.

Just to introduce the Payments Barometer Report very briefly, this is a piece of work that Bottomline started several years ago, when we saw a gap in the market in terms of coverage of business payments and being the voice of the corporate. We wanted to bring to the table the concerns, the investments, and some of the key themes that are happening around business payments for corporates, mid-corps, and SMEs, around the UK.

This year, we've also doubled the research by bringing in the US market. The background has about 800 interviewees in each of those geographies, so 1,600 in the sample set, where the Ipsos MORI guys have helped us collect the data and bring the various outputs to you today.

You'll see on page eight there's a historical time series of the areas that have been brought out historically, and some of the league tables on key influences and themes this year, which we’ll dig into.

Let me bring in my colleagues here by opening up some of the questions from the report. What I'll do is we'll start with some general questions and then I'll run through three chapters. I'll go through the fraud area. We'll go through the international and real-time area, and we’ll go through the cash-flow area.

We’ll try and signal those as we go through, but let me start more generally. James, perhaps I'll start with you and then come to Marion. In terms of this year's report, is there any one data point that you found particularly interesting that you wanted to highlight?

James Richardson: Yes, thanks, Ed, and good morning, everybody. For me, the standout data point being more on the fraud and financial crime side, that's where my eye was naturally drawn to. It was the statistic that 52% of organisations agree that there is an increase in insider fraud and collusion. That, for me, was a pretty hard-hitting stat.

Ed Adshead-Grant: Wonderful. In this world where we're working from home more, we know there are fraud initiatives going on. How can we dent that number? That'll be an interesting area to explore. Thank you, James. Marion, yourself, was there one particular stat or theme you wanted to highlight?

Marion King: Yes, Ed. I was drawn to the barriers to real-time payments, bearing in mind real time was launched in the UK, what, 13, 14 years ago now and is now in the States. Then, looking at the barriers to real-time payments, the highest reason that businesses gave in both countries for not using real-time payments was that they have no need for it, closely followed by the second highest, which was, “We are unsure of the benefits.”

For me, those two things don't really fit together that well. I think it highlights that there's more learning, more education, and that the industry has more to do in terms of articulating the real benefits of real-time payments.

Ed Adshead-Grant: Absolutely. On the day where I read this morning that Stripe has launched their international payments infrastructure, so there's a lot of choice out there, a lot of tech for people to understand more about, especially in the business sector. Thank you. Charlotte, any particular area that you wanted to highlight at the front of this meeting?

Charlotte Crosswell: I think, yes, so I shall do a bit of self-promotion, perhaps, on open banking and the increase of how preparedness has risen from 55% to 63%. I think here, when we look at the issues facing SMEs through late payments, anything we're going to see to increase that adoption is going to, hopefully, help those SMEs see through recovery from the crisis.

So, looking at half of the SME community using products powered by open banking, I think, really shows us what's left to go. Obviously, it's a critical time now for open banking. I think working with those key stakeholders, focusing on the small businesses and all the people, therefore, that they employ across the country, I think it's incredibly important that we try to do whatever we can to support them.

Ed Adshead-Grant: Excellent. Thank you for just highlighting a few of the areas in the report. Everybody reads and pulls out different things as they go through this, because there is so much data in it. I'm conscious of that as we run through it at speed today.

Let me go into the first area, then, a bit deeper, which is fraud. I just wanted to highlight, myself, some figures that I can see. The value is up in the UK sector of data, by 10%, only 32% recovered fraud, both in the UK and US. Only 1 in 3 companies actually get the money back, which is interesting when you go into prevention and cure discussions, 7 out of 10 willing to do more checks in-house as a business, rather than rely on a bank to pick things up, which is another interesting trend.

Also, we know about APP fraud, authorised push payment fraud. We're all waiting for the UK Finance Report on that for official figures, but the expectation is it's going to be extremely high and will probably gather quite a bit of attention in the industry and press when those figures are published, so an active area for the financial crime piece. James, perhaps if I come to you first and then Marion: is fraud just a cost of doing business now?

James Richardson: The stats certainly show, Ed, that losses are up. Recovery is broadly low. About a third of funds get recovered, and this general feeling that it is part of doing business. Yes, the stats there are 47% in Great Britain feel there's little we can do to recover losses, and that's across all sizes of business. It's a little bit higher in North America, 57%, so there's this feeling that we're all feeling a little bit beaten.

I think your comment about authorised push payment fraud is a good one. The last stat on that that we have in circulation is around £470m, £480m within the UK, and widely expected to… We'll wait and see, but there are some that view that that could be tipping £1bn, but, interestingly, it has overtaken card fraud. Card fraud is now on the decline, so I think businesses are right to be concerned and worried that they are being targeted. I think that that's fair.

The thing that I would really like to challenge is there are things that organisations can do, whether you're a small business, or whether you're at an enterprise level or somewhere in the middle. There is technology, there are education and support programmes, and access to that has probably,This is probably the best it has ever been, actually.

I think credit to the banks in rolling out large waves of education programmes to their corporate customers and others, other FinTechs as well. Pay.UK, Open Banking and others have really supported this drive and initiative, but I don't feel like it should be the answer. It shouldn't be that it's the cost of doing business.

At what point did that become an okay statistic that we just accept – yes, half of businesses accept – that we've just got to consume the fraud? I would really want to challenge that. I like to challenge that, and I'm a champion of believing that we can go much further in that space.

I do think that COVID, we will look back, and we will look back in a couple of years and realise that COVID has probably been one of the biggest drivers for fraud hitting organisations, worldwide.

We talk about the term ‘catastrophic loss’, where it's not just $10,000 frauds. They are hundreds of thousands or million-dollar frauds, so my view, Ed, is it shouldn't be the answer. It's the feeling that definitely comes through in the report. I think there's a lot that organisations can do if they can lift their heads up and look for education and support. It's there.

Ed Adshead-Grant: That's great. Thank you, James. There was a new category that I was interested in: the PSR consultation on CoP to try and stem APP, the psychological damage, the victim, the cost to victims of fraud, which I thought was spot-on in terms of measuring that and acknowledging it.

Marion, perhaps I can come to you with a question around businesses and what responsibility they have in business payments to know who they're paying and how to look at the initiatives around. What initiatives should they be looking at to try and help improve the situation?

Marion King: Yes, I think this report, the statistics are shocking. I can't help but feel, as an industry, a bit ‘shame on us’ that this is still out of control and getting worse. Just to highlight what James was saying, and your comments, Ed, on the PSR, that this – push payment scams particularly – ruins people's lives.

Unfortunately, what we saw through the pandemic was they pick on the vulnerable because it's an easier target, which I think goes against what all of us stand for and what we believe in. So, it's the weakest link in the chain they go for, be it a person, be it a business, be it an association of some description.

I think what was pleasing, though, from this report, was the level of organisations that really want to take responsibility. As Ed – as James – highlighted, companies want to do more. They want to, in effect, improve their position on understanding and managing fraud.

The insider fraud was something that I hadn't really for foreseen. Therefore, using technology, going through their own control environments, knowing staff, customers, suppliers, numbers, is more important now than ever before, and the need for refresh.

But Confirmation of Payee is an interesting one that we pulled out, and now it's really, really important that Confirmation of Payee is rolled out across businesses, too. We started with consumers. We started with major banks. That's now increasing.

I think it's pleasing that it's a code of conduct. We all know we have to rise to the highest possible level to prevent fraud. It’s not because the regulator told us to. It's because it's the right thing to do, so now we need to get it rolled out across for businesses, SMEs, larger businesses, and any registered bodies, so that we can identify, to the best of our ability at this time, that we're actually sending money to the right entity.

I also think that, on that education front, businesses – and again it was pleasing to see it's happening in the report – need to learn more about what's coming: ISO 20022, in terms of more data. More data attached to the transaction will help businesses, coupled with technology, of course, but this will enable businesses to try and get one step ahead, in partnership with their suppliers and their financial providers and banks.

So, I think get ready for ISO, what it might mean. Ask questions, challenge your partners, and really get focused on knowing where the money is coming from and where you're sending it to.

Ed Adshead-Grant: Thank you, Marion, so a lot to do for the industry here. Charlotte, how can open banking help in the fraud domain in particular in the UK?

Charlotte Crosswell: Yes, I think, just picking up on James's comment, yes, it is a cost of doing business, but that doesn't mean we have to accept it. I think we really have to take that step back and say, “How do we look at this?” as fraudsters become more savvy, unfortunately, of how to navigate. For every bit of technology we bring in, there will be another wave of them trying to get round that.

As we know, there are a lot of people who are struggling to recover from the pandemic, a lot of businesses. That, unfortunately, can lead them to make quite desperate decisions without really thinking through: “Is this genuine, or not?”

At the Implementation Entity, we support various fraud-reduction initiatives as much as we possibly can. We provide the technology that enables the Confirmation of Payee and continue to see a huge demand for that. For everyone who thinks that they don't want to go through that extra step, I always remind people that that's why you're going through that extra step, is really making sure that that's what… You are genuinely making a payment to the right person or the right business.

What we've seen is open banking payments, currently, are less vulnerable to this form of fraud, mostly because the payment provider, the PISP, has a relationship with payee. That can reduce the risk of payments being sent to a fraudster.

We've also launched an open banking fraud self-assessment tool that's free and available for banking participants, to try to allow them to assess and identify areas for improvement. I think we're also seeing a lot of intelligence sharing between the banks, and the third-party providers.

I think that's important, as well, as we see that collaboration. This is a joint problem across industry. It’s not for any one set to solve on its own, because that's the only way you can do it when you're seeing the technology get faster and people taking advantage of this.

Unfortunately, fraudsters, constantly, you’re always feeling like they're slightly one step ahead, so I do think collaboration has been quite key to what we've seen now. We will continue to develop research into behaviours, using those scam warnings, as well, and making sure that we take that risk-based approach to it.

We can't be complacent, so while, as I said, we've seen less fraud within the open banking payments, that doesn't mean that that's not something that may come down the pipe. So, I think getting used to that collaboration, seeing this as a joint issue, not accepting any increase at all, and pushing ourselves to develop new ways of staying ahead, I think, is really crucial.

Ed Adshead-Grant: Thank you, Charlotte, so a lot more data in this world of digitalisation, getting access to that, helping to stop the fraudster. It seems to be a perennial issue. Sometimes I even question, if we didn't do all these initiatives, what would the numbers be, because we're always fighting it, every year, with innovative approaches? Heaven knows what it could be if we had to ‘do nothing’ strategy and spent it down the marketing budget or something different: horrific.

Right, let me move on to the second chapter, which we're going to talk about international and real-time payments, again a plethora of data down that research, always an area of big interest. I'm a big fan of the G20 work that's being done geopolitically around access on cross-border payments, and cost, and transparency, and speed, those four big pillars.

It has a high profile and always seems to be difficult, whether you're on holiday, as a consumer, or as a business trying to make payments across different zones, and regimes and things, and very fluid, of course, with the tensions around Russia and Ukraine, changing the sanctions world and things like that, so, very dynamic area. Charlotte, perhaps I can stay with you and then come to Marion. I mentioned digitalisation. How fast is this digitalisation actually moving the agenda along in payments, in your view?

Charlotte Crosswell: Yes, it really is. It seems like the hockey stick, for anyone who's doing their investor decks. We really are seeing now that accelerate, and that was very much driven by COVID, as we know. I know, when we worked on Kalifa Review that you referenced, it was estimated with consumers that 6 million people downloaded their online banking app in the first month of COVID, which is just incredible when you think about it. That wasn't necessarily the younger generation, obviously. That was older people who hadn't had to operate digitally before. I think that is a relevant statistic.

What we're seeing now, of course, is open banking payments are really accelerating now. Every few months, we seem to be notching up another million users. It gets to the point where, “Where do you get to the tipping point?” I think that is certainly something that probably isn't that far away now. It's a bit like when people used contactless and everyone was terribly nervous about using contactless. Then [suddenly 0:20:00], 10 years later, of course, nobody could really think about anything else.

We are definitely seeing that, obviously, post-COVID, so certainly we are expecting that to continue to accelerate. In terms of adoption of open banking, most people are aware that HMRC now takes it to pay your tax. You can pay your court fines via open banking, you’ll be pleased to know, but also utilities, charities. A lot of people are looking at this as another alternative way of payment as people get used to this, as well.

That does, obviously, help to reduce the cost of expensive card handling, merchant fees. When we come back to that constant demand for reducing costs and accelerating the recovery from COVID, I think we are seeing a lot more awareness now from SMEs looking to take advantage of these new ways of payment. I think that is incredibly important.

What we obviously need to be doing is constantly educating businesses, as well, about the benefits that open banking can provide for SMEs, and, coming back to the education piece, showing that those are robust measures that have been put in place to guarantee that data privacy. In a world where everyone is so concerned around data, everyone wants everything to be faster, use digital, hit every button they possibly can without considering what they're actually doing, but there was also that concern over data privacy.

I think having that balance is important, as well. So, what we need to do is make sure that, obviously, we are educating those SMEs on getting the customer confidence and the trust in this new way of our payments. I think it's incredibly exciting.

For anyone who says, “What's open banking?” I think we will probably be successful when we don't even know what open banking is. A lot of firms, obviously, have used the Pay by Bank terminology instead. It's a bit like when you go to book your online Uber: you don't really need to understand the API that happens to get that page. You just need to know that it's safe, it's secure, and it's fast, and it gets to where it needs to be.

In April we saw 4.5 million open banking payments across, and that's just across the CMA9 that we measure. To put that into context, that was over 200% growth in the same time last year. So, I think if anyone thinks this is going to slow down, I think it has really shown that this is just another way of taking advantage of the digitisation agenda.

Ed Adshead-Grant: So, we're becoming more integrated, more connected, more international. It sounds like we should be able to move money around the world quicker, better. Marion, I wonder if I can come to you. What more can the industry be doing to support UK PLC in international payments and real-time payments, in your view?

Marion King: Yes. I think, as you say, this time, like no time before, we're facing into potential recession. We're facing into tough times. Supply chain is compromised. Everywhere you go, the reality of doing things today is very different from two years ago.

Yet what stood out for me in your report was that speaking to businesses, SMEs, through to larger organisations, what are the reasons you're stopping making international payments? If you're stopping making international payments, it means you're ceasing to trade cross-border, which is not a positive thing in terms of where we need to look to grow our businesses.

It wasn't, “Well, look, we're downsizing,” or, “We've not had success in that market.” It was number one was trouble in making international payments when paying international suppliers, just difficulty in transacting. The second was then difficulty in tracking that payment once it had been made.

This is all just too much for businesses that are already finding life quite challenging right now, so again it's down to all of us to do more to help our customers and to help businesses, but what does that mean? I think it's a couple of things Charlotte was saying. Charlotte talked about no one company can fix this. It's like the fraud situation. No one company can fix fraud. No one company can fix cross-border payments.

We know that international payments, as your report shows, it’s difficult. It lacks transparency. It's expensive, often – much more expensive than it needs to be – and is it safe, and is it secure? All of those things plague cross-border payments, and we need to fix that, because the technology is there.

I think open banking will accelerate it dramatically in terms of who you can access, how you can access, but it's that collaboration point. It's that partnership point. It isn't just meeting up and having a chat. It means really working together, bringing the assets, the knowledge, and the capability of multiple organisations to find solutions.

This is happening. I was really uplifted to see the collaboration between SWIFT, EBA, and The Clearing House. I wouldn't have guessed that they were likely bedfellows and yet they've got together to say, “How can we get real-time payments cross-border effectively, transparently, and more cheaply for businesses, and for governments as well?”

We've seen initiatives in Europe, and we've seen some that are struggling. That's because it's quite hard. I go back to my VocaLink days. We often talked about herding cats, because everybody has got their own agenda. How do you bring this together? But it is happening.

I think open banking will provide a catalyst for that. I think global standards also provide a catalyst, where you're forced to do the same things, in the same way, at the same time. So, it is really important, I think, companies large and small, and all players that impact the transaction market, really think through how they can accelerate getting those safe, cost-effective, open payments through.

I think there's more to be done. I certainly applaud organisations, large and small, that are prepared to say, “You know what? We're going to put our assets on the table. Let’s see what we can do together.”

Ed Adshead-Grant: Fantastic. Thank you, Marion. James, a lot here. We're talking global trade. We're talking about linking the world, keeping it secure in a real-time mode internationally. I heard SWIFT there in the background, where I know you spent a lot of time helping that network to move forward.

What did you want to highlight James, in this chapter of international payments and real-time payments? What did you want to highlight for the business corporate in the payments regime?

James Richardson: I guess two things. One is to just call out, perhaps, the obvious statement, which is fraud itself is an international business. Organisations within the UK or North America, where this report is particularly focused, many of them will be getting hit from international fraud rings, fraud circuits.

So, when you start to make international payments, it’s worth recognising that there are additional levels of checks, additional diligence that you want to go through just to give yourself that level of assurance that you're paying who you think you're paying.

It doesn't have to be particularly onerous. Actually, it's worth remembering that. It's certainly what's highlighted in the report. Many corporates actually want to take advantage of the technology that's available, that has previously just been available to banks.

More technology is available, as Charlotte and Marion have said, that can be embraced by corporates to support their international payments. Not just the payments but the checking of the funds as they're pushing them out the door, but there's certainly what I would call ‘next-level checks’ that you just want to instil as standard.

Making payments, or the protection of payments, should be everyone's business within the organisation. It shouldn't just belong to the individual or team that controls the electronic purse. It’s okay from an attitude point of view. It's okay to challenge: why are we making this payment? Are we sure this is right? There's a cultural shift that’s needed to embrace it.

ISO was mentioned. I think Marion mentioned ISO. I think ISO 20022, which is coming hard and fast, presents not… It's not just a technology shift with more data. It presents far greater, richer data to perform greater checks.

That's a wonderful thing for businesses to embrace. Rather than, perhaps, looking at it as a technological headache that they’ve got to make some file format changes in order to service international payments, embrace the fact that what it gives you is access to instant payments in emerging geographies.

It is becoming, hard and fast, the standard to operate to, and it’s giving you a gift of a wealth of data and information to perform checks to know who you're paying. Actually, in the new climate since Russia, I think businesses are becoming far more interested about where they're making payments, not just who they're making payments to.

Then my final piece on it is just to call out: instant payments means that more checks need to be taken by corporates upfront. It hasn't got to be onerous, as I said before, but just recognising that the more hops there are in the chain, especially in that happens with international, recovery gets harder.

This is not an advert to say, “Don't do international payments.” In fact, it’s the opposite. It’s to say, “Make the international payments. The benefit is very clear, but take the responsibility of performing those checks upfront, and actually you'll find it’s far easier to grease the wheels of the payment machine.” There's a general shift moving to corporates from banks anyway. Access to technology has never been easier, but just being savvy about what you need to do, I think, is important.

Ed Adshead-Grant: Excellent. Thank you, James, again a lot there, a lot of tech out there. There were some interesting statistics in the report about the amount of people investing in this area. I think they recognise it.

Just to repeat one of the stats, 7 out of 10 businesses said they were happy to do more checking, particularly sanctions, captive sanctions checking before the payment goes, rather than the last resort of a bank back end picking it up. So, certainly an area that's very active in terms of international payments and the complexity to manage there.

Okay, we're more or less on time, so let me move to the third chapter, if I may, that we set up for you, which is the cash-flow area and some of the data there. COVID, you won't be surprised, came through on this work as the number one disruption on the league table, the influence again for the second year, just unprecedented in terms of the impact that that has had. Everyone is trying to bounce back, literally. Not just via loans but bounce back as we speak.

Cash flow is still king, of course, or bloodline to the business, so having visibility around it is key. I'd highlight as well, before I come back to you again, James, if I may, in a moment, for your view, I'd highlight that this late supplier payment is still there.

This is something that actually frustrates me, as a practitioner, that this is a behavioural pattern, but not just in the UK. 84% purposely pay late, but also in the US now we've got a statistic of 82% are stretching out that supply chain on payments, which in a digital, connected world, you'd think, could be regulated or changed very quickly.

So, a lot of data in the cash-flow key area. James, perhaps if I could come back to you just one last time on this area. What area did you want to pick out that a CFO ought to, perhaps, focus on out of this Business Barometer Report?

James Richardson: I’ve just got to call out these naughty, naughty businesses paying late. There's a better way of doing it, isn't there? Genuinely, there is. A lot of organisations that are on the receiving end, or wanting to be on the receiving end, are actually quite interested in some form of reduction to get their cash early, so it comes back to communication and the fact that it's all digital, as well. I think there's an opportunity to improve that.

As a general point for CFOs and others to think about, I would really encourage, if I put my fraud and financial crime hat on, I'd really encourage organisations to lift up, look at the whole landscape of how to make payments. Recognise that there has been more change in the payment landscape in the last 2 years than there probably has in the last 20, and I've been in it for 20-odd years. That presents opportunity, not negative change. It presents opportunity.

Fraud has always been seen as a bit of a balloon that gets squeezed. I'll go back to my earlier comment about card fraud. The card industry has done a wonderful job in reducing card fraud, all these extra checks that are put in place. What has happened? Card fraud has gone down and authorised push payment fraud has gone up. So, the balloon has been squeezed into this area that right now is a double whammy because of the card fraud reduction, and because of COVID and the increase in insider fraud and international fraud circuits.

So, I think I would encourage CFOs to lift up, look at the wider picture, the opportunities that present themselves to improve fraud detection. This hasn't got to be complex. They've just got to lift up and embrace what's there, rather than accept that it's a cost of doing business. That's not, I think, as many would argue, it's not the right attitude. Together, we can definitely do more and should do more.

Ed Adshead-Grant: Thanks, James. Charlotte, could I come to you next, on cash flow and the health of the business? What other general advice would you pick up from the report and, perhaps, highlight in that space?

Charlotte Crosswell: Certainly the statistics, which shouldn't be a surprise to anybody, are that 69% of businesses in the UK, you have highlighted the issue that they need to receive this money quickly. We just aren't doing enough to make that happen.

I think, again coming back to you, are we going to live with some of these issues and say, “This is a perennial problem”? No, we can't. We cannot do that. So many people are now saying to me that they're noticing small businesses start to close down because they had their loans, they managed to survive COVID. They thought everything was back on track. They recognised they had to start to repay. Then we had the cost of living crunch. We've had energy prices going up, and suddenly they're already living day to day.

We have to, therefore, make sure this cash flow isn't the thing that trips them up and makes them think that they're not a viable business anymore. It's just not acceptable. It really isn't. Again, that comes down to good education. It comes a lot down to what we can use in technology to ensure this happens. There are abilities for companies to send their invoices now with a link saying, ‘If you bank with one of these banks, pay now.’ We've got to make it seamless.

It's not always intentional. A lot of the time it's, “We’ll do that later,” and then it falls off a cliff and then it requires so many chases. So, we have to make it as easy as possible. We have to really, really push all businesses, large and small, to ensure this [isn't a 0:37:50] thing that trips them up.

Obviously, real-time payments are one of those solutions to help those companies pay the invoices and, as Ed mentioned, the example with HMRC earlier. Using that on a large scale, helping those back-office reconciliation costs, is incredibly important.

That, in turn, has helped government. That has saved government huge amounts of money. It’s estimated 6 billion, I think, is sitting in suspense accounts or something, but one digit wrong on their taxpayer reference when putting in their tax return and then, of course, they're getting fined. Government doesn't know where to reconcile their money to. So, being able to take that friction out, through open banking payments, has had quite a positive impact on that.

That's just one small example, really, of how we can make this easier, but shame on us. If we don't highlight this and we don't help these businesses get through this crisis, and ensure they come out the other side and really tackle this issue once and for all, then we are doing those businesses a disservice.

Ed Adshead-Grant: Thanks, Charlotte. It appears to me that the technology is there. Everything is real time, more accessible. We've got regulatory support in some markets. It's just connecting it to the future users, that education bit, and enriching it with more collaboration so that adoption can take off and attack things like cash flow, and visibility, and tracking of where things are around the world.

Charlotte Crosswell: I think it's getting easier, Ed. I think we are starting to see this technology be adopted. I think, once again, it comes to that tipping point. Once people recognise that there's something, they can just hit the button and get it done using accounting software, these are things that will become very much day-to-day usage, but, as I said, it’s anything we can do to accelerate that, because it is going to be a tough 12 months ahead for businesses across the country. So, let's use all our tools in our toolkit, to make sure that we push things forward.

Ed Adshead-Grant: Absolutely, a rallying cry. Marion, perhaps you could close off this third chapter around cash flow and some of the things you saw in the report that, if you were sitting with the CFOs, you may want to share.

Marion King: Yes. I'm really pleased James raised the point of culture across the payments industry. It seems that this report really pulls out two things that need to change and keep shifting. One is it's not, and shouldn't be, accepted as a cost of business that fraud is just there. We have to fight it more aggressively.

Secondly, it's not good to pay late, because, if you pay late, you will receive late. So, we need to shift the culture because we talk about faster payments, immediate payments, real-time payments. Technology is there. Maybe CFOs need to step back and look at what speeding up the payment process could do for their business, both in terms of cash-flow management, both in terms of treasury management and liquidity, and only pushing the money out when it's needed, on time, but in real time or near time.

I make that differentiation because, again, James raised the point of friction versus real time. So, instant payment isn't always the answer, but in near real time is. But also the culture of real-time payments: perhaps businesses, the CFO, and the

CEO should really think about payments as a differentiator. Being easy to do business with and a trusted partner – i.e. you pay on time and effectively, with clarity of what the payment is for – is a really important part of the brand and what businesses can do.

So, I think, having spent 7½ years now in banking and ringing payments up as a business opportunity and a business enabler – not back-office plumbing, a business enabler – and now we have open banking, that allows you to take your financial packages, treasury, invoicing, inventory, accounting, and bring the transactions through with the data and so that you can lock in a flow that treats everyone fairly.

That culture of paying on time, and using technology to enable you to do that effectively, has to be where we move forward. So, I think my call to businesses would be, “Think about your payment mechanisms, your invoicing mechanisms, as not just a cost of doing business but potentially a differentiator and a way of being good to do business with,” I think, which is what we all need.

That, together with reducing fraud and managing these two big cultural threats to our industry, I think, and excuse the pun, but will really help improve bottom line for most companies. These are real ways. I know in the bank, the biggest shift in the bottom line will be reducing fraud. Revenue is harder and harder, and it's about taking the waste out of our business and the shame of our business, to improve business performance.

Ed Adshead-Grant: Excellent. Let me say, look, we've covered a lot there. We've covered the fraud, the international and real-time payments, and some of the cash flow. Let me just squeeze in one brief question. I want to open the floor just to see if there are any immediate questions from the journalists.

You're welcome to use the Q&A box if you want to type them out, or we'll come off mute very shortly, but as a little final bonus question, just listening into the panel, where does a business go to learn about this stuff? What would you suggest? James.

James Richardson: That is a really good question, and it’s one that I'm now being asked more about, probably in the last six months, from businesses, than any previous time. I think part of that is recognising the change in the balance on the dependency on the banks within the mix.

Historically, a lot of the education, and the change in understanding payments, has been at bank relationship level. For a variety of reasons and for good, that mix is changing, and it's not that banks don't have their part to play. Of course they do, but I would really encourage organisations to have a number of data points.

Look at FinTechs, look at Pay.UK, Open Banking, UK payments and bank relationships. That is all really helpful because everyone is coming at it from a different angle. There will be overlapping information where you can get a sense of what's important for you and your business.

Whilst – shameless plug – Bottomline would love to be seen as a strategic payments partner for many of our customers, and we are, we also know that we're not the answer to everything. We still encourage people to go out beyond us and look elsewhere to get extra data points.

There is no one shop to go to, and it does require some effort. I would encourage people to not just rely on previous bank relationships to get that source, because the dependent… Because the play of the banks in the mix is changing. It’s not necessarily in the bank's interest to highlight all of the changes that are coming down the line as there's greater relationship breadth across the financial community. So, that would be my thoughts on the mix, Ed.

Ed Adshead-Grant: That’s excellent, thank you, and even whole new cohorts, third-party pro- TPPs, to get lost in our industry acronyms, is a whole new body that can manage the payment experience for businesses and consumers. Charlotte, did you want to add anything on that question: where does a business go to learn this stuff? Or Marion.

Charlotte Crosswell: Yes, it's a great question, isn't it, because so many of us use so many multiple different providers now? But, for a lot of really small businesses, that's not so easy to go through in the plethora of information they get sent through the post and then they get sent through advertising, etc.

I think what you're going to see is people start to [provide 0:46:56], probably, three or four different providers they trust. Nobody gets the best deal out of financial services across this country – nobody, not a consumer, not a business. We all are not maximising any savings we have. We're probably all overpaying on mortgages or insurance. What a depressing thought that is that even the most financially savvy – and we’re probably the worst – are not maximising this.

For businesses, you can understand you used to be able to go down to your bank, you'd have your business relationship manager, and that was it. What they said went. Now, obviously, what we now know is, of course, that wasn't the right thing either.

There is competition out there. There is more transparency, and I think our next… It wouldn't surprise me, in the next wave of evolution, are we going to see these super apps that get created that help to direct people, say, ‘Right, you want help on tax. Here. You want help on payments. Here. You want help on data. Here’?

We haven't quite seen that, so, if there's a FinTech and anybody out there, that's what I'd call a ‘call to action’, is we do need a bit of help in navigating. I think a lot of people would say, “Is that down to government?” I think we've all seen in the past that generally that might seem the best place, (Laughter) but generally industry will need to deliver on this one to make it the most efficient.

Ed Adshead-Grant: Yes. We might be waiting a long time, yes.

Charlotte Crosswell: No comment on that one, Ed, but I think we will start to see regulators step in on this. We obviously saw this in open banking. There wasn't enough competition. There wasn't. We had a directive coming into Europe, and you can see what has happened in Europe. We haven't seen as much progress, because the Implementation Entity wasn't set up.

Having that focal point of what has been done by my colleagues in the industry across that, to provide that common standard, has really driven through innovation. A lot of people would say, “Has that then resulted in account switching?” Perhaps not. “Has it resulted in people using this for payments, for data, for transparency, for ease?” Yes, it has.

That's just a small part of what legislation has been brought in. We continue to see that. We're going to see these in bite-sized chunks. I know from conversations, obviously, on a regular basis with government and the regulators, this is the thing that's bothering them, is, “How do we help the businesses get back on their feet, and how do we help them recognise that there is help available?” Choose a few providers, I would say, but not too many. Otherwise, you'll be there forever.

Ed Adshead-Grant: Fascinating insight. Thank you.

Marion King: I love that idea of a super-app. I think we'll start to see that happen now, I think that’s in terms of helping businesses navigate this complexity, because we've all highlighted how much has changed, and it's changing around us. Just yesterday, “Oh, there’s another little bit of legislation. Oh, there's another report.” It's constant, so how do businesses navigate?

I guess with my Payments Association hat on, it has made me think, “Look, probably neutral bodies need to do more in terms of helping businesses that don't quite know how to go about this.” Payments Association is for all members. It's growing rapidly. It's banks, as well as small FinTechs, but it's a neutral, safe place for businesses to talk and share.

I think there's a role in trade association. I think there's a role in all the events we have around our industry, but drawing data out of that, and some sort of navigation tool, I think, would be a really positive thing. So, I shall certainly take that back into the Payments Association in terms of augmenting that education piece, that routing people to the right areas to go to. Not an advertisement, but routing where you should go in terms of the questions that you might have.

Ed Adshead-Grant: Let me wrap up, then, first of all by thanking the panellists for coming in and sharing your insights from the wealth of experience that you bring to the table. It really is appreciated, and I think it gives some good colour to the Business Payment Barometer.

We've covered a number of areas very briefly. I mentioned it was just a flavour as we drove our little train through this data pack. We covered fraud. We covered international and real-time payments, and we covered cash flow, pulling out some of the data elements, some of the themes. Went through digitalization, the new tech that's out there that people can choose from, as a business, and how the fraud continues to be painful leakage from the industry. We have to keep fighting hard and investing in that space. Thank you.




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