Unveiling the Future of Money: Key Takeaways from Money 20/20 Amsterdam

Money 20/20 is one of most sought-after events in the finance industry. Leading Financial intuitions, Government bodies, thought leaders, and FinTech’s come together to talk about the latest and emerging in money under one roof.

This year, Money 20/20 at Amsterdam saw over 8000 delegates from nearly 100 countries. Cognizant was present at Money 20/20 along with our partners Temenos and IBM Redhat. The 3-day event had a lot of interesting conversations. Here are the key ones that we found most striking - 

The Rise of AI

AI starts to make inroads in the future of money. Incidentally, the first session at the recent Money 20/20 Europe was a fireside chat with Dr. Rumman Chowdhury, AI Global Policy Expert at Harvard University. She spoke about AI’s prominence in the industry and the need to have regulatory and technology oversight to remove inherent bias that can creep into AI systems. 

AI is certainly a game changer for businesses. In financial services, AI finds active use in making credit decisions, assessing risks, and detecting financial crime. However, it needs to be implemented in the right way, or else the regulatory penalties and brand loss can quickly outweigh gains.

New Payment Methods

The emergence of new form factors like smartwatches or immersive devices is shaping payments of the future. They are driving the next level of connected infrastructure and seamless integration with social and commerce. The banks are focusing on redesigning the issuing and acquiring processes for a new world and competing with FinTechs, who are far more agile and open to newer integrations. 

Common Standards 

ISO 20022 is fast becoming the global standard for payment messaging. Market infrastructures across the globe are adopting payment message processing to ISO20022 by 2025. The new message processing safeguards financial implications derived from malicious attacks on external incoming messages. It also addresses many of the shortcomings of MT, providing rich and well-defined structures for important data while supporting non-Latin character sets. 

Financial institutions embracing ISO 20022 must consider key aspects like the industry imperative, in-country, and cross-border relevance, and other financial Infrastructure projects that impact implementation options. They can then assess the possible business and tech impact, formulate a migration strategy, and successfully execute the migration process.

Power of SaaS Platforms 

Financial institutions are facing the twin pressures of evolving customer choices and a growing ecosystem. They realize their legacy Payments platforms offer limited agility for the future. This is where Cloud-based SaaS platforms like Temenos Payments Hub (TPH) can create a modern foundation for the future. TPH gives the ability to innovate and scale new capabilities that can address the payment needs of today and tomorrow. Cognizant is a strategic system implementation partner for Temenos, know more about our experience here. 

Emerging Regulations

There are ongoing debates on regulatory changes and how they will impact innovation in finance. For example, in India regulatory changes had a positive influence in pushing UPI adoption. On the other end, Europe struggles to gain momentum in the absence of standard API across Payments. Another key regulatory change that will see a lot of action is European Union’s DORA (Digital Operational Resilience Act). Passed in January 2023, DORA applies to any organization dealing with payment systems and it needs to be implemented within the next two years.

The Bottom Line

Payments are at an inflection point. The nexus of customer needs, technological advances, and emerging regulations would set the future trajectory of payments. The financial institutions – banks, payment network providers, and payment processors need to rethink their business and technology strategy to be future-ready. Modernization can be a start, but in the long term, they need to be more open, innovative, and ecosystem-based to succeed in the future.