Fintechs and other innovative players are bringing their digital expertise to bear, looking to create a more transparent ecosystem. As a result, financial institutions have a unique opportunity to partner with these innovators, combining resources to overcome B2B cross-border payments challenges.

Another benefit of such innovation is the ability to gain access to important data. In the current model, much of the data related to cross-border payments doesn’t ultimately make it through to the beneficiary. Without this data, bank clients struggle to reconcile payments efficiently. Any solution that ensures a full stream of data accompanies payments throughout its lifecycle can begin to deliver on the highly sought-after goal of straight-through reconciliation.

At the end of the day, the importance of listening to customers should not be overlooked. Especially in challenging times, customers need as much data as they can get – to enable them to make smart, strategic decisions which can have a huge impact on their business. If emerging solutions hold the potential to deliver the critical data that businesses need, their implementation should be a no-brainer.

More optionality is good news for banks and their customers

When it comes to B2B cross-border payments, banks and their customers view expanded optionality in the marketplace as a very positive development – today more than ever. Up until now, these types of payments have always been completed through the tried and true SWIFT messaging system. SWIFT has and continues to serve the industry well, but clearly there is room for additional choices.

Innovative new solutions are enabling efficient cross-border payments through a multilateral relationship structure. This type of structure overcomes the restrictions of the traditional bilateral approach that relies strictly on correspondent networks. Emerging networks are tapping into next-generation technologies, such as distributed ledger infrastructures that can facilitate financial transactions on a private, permissioned, and highly-secure network.

Increased optionality built on innovative technology promises to democratize the way cross-border payments are made. Of course, ultimately, it’s all about empowerment and helping businesses, both large and small, do more business – even during tough times. Having optionality, managing risk and accessibility will help do just that.

The evolving future of cross-border B2B payments

As business continues to expand globally, innovative solutions are emerging that reimagine how B2B cross-border payments are made. These evolving solutions are offering important advantages to banks and their customers – providing greater optionality, improved transparency, increased predictability, enhanced compliance, and better access to vital data.

Cost savings remains another important benefit of adopting a multilateral cross-border payment solution, as expenditures associated with managing intermediary bank relationships are eliminated. Look no further than Nostro accounts, for example. The average annual cost of maintaining these accounts among global banks can amount to $1.5 billion*; while maintaining just one of these accounts costs a US bank $27,270 each year*. That’s a lot of money.

A centralized, permissioned network, where all participants are known participants, will enable payments to be processed securely and directly, thus minimizing the expense of maintaining Nostro accounts.

The future of B2B cross-border payments promises to be simpler, secure, lower cost and more transparent. Geographic barriers will gradually be eliminated in this rapidly evolving global payment ecosystem. Banks can be expected to partner with fintechs and other innovative players to bring new technology to the space, tapping into their expertise as digital natives, with the goal of strengthening customer relationships. Modernization is here for cross-border payments and that’s a good thing for everyone involved.