Instant payments and tokenisation are reshaping financial services but speed, availability and choice can only increase value if clients can rely on them safely, connect to them simply, and scale them across markets consistently.
Amber Henderson Smart, Global Head of Client Connectivity, Global Payment Solutions at HSBC, writes for Payment Expert on why trust, not speed, now separates real-time payment providers.
In this feature, she sets out why irrevocable instant payments push fraud controls upstream, how tokenised deposits and stablecoins can run over the API, SWIFT and mobile channels corporates already use, and the three elements she says global banks need to scale innovation across fragmented regulatory markets.
Why fraud prevention must move upstream
‘Irrevocability’ in an instant payments environment, is what creates value, certainty, speed and confidence for the customer. But it also changes the fraud equation. Once funds move in real time, there is often little or no opportunity to investigate, recall or reverse a payment after the event.
Fraud management therefore has to move decisively from “detect and recover” to “predict and prevent”, with controls embedded much earlier in the payment journey.
That points to banks and payment providers doing two things particularly well. First, being able to help customers identify and avoid scams before they authorise a payment, especially impersonation and social-engineering attacks where criminals create urgency while posing as a bank, supplier, executive or other trusted counterparty.
Second, when a suspicious payment may already have been made, the reporting journey should be fast, structured and actionable which helps enable investigations, intelligence sharing and any attempted intervention to begin immediately.
Practically, this often requires a multi-layered defense combining strong customer authentication, real-time behavioural analytics, device and network intelligence.
AI can play an important role through anomaly detection and contextual risk assessment execution before then event, and after, by accelerating investigations through linking related entities — such as devices, accounts and beneficiaries — to identifying mule networks and emerging typologies.
The critical point is that these capabilities should operate with appropriate human oversight, so decisions remain explainable, consistent and trusted.
Prevention isn’t likely to be solved by banks in isolation. Fraudsters are already using AI to scale, personalise and industrialise attacks, so the response increasingly benefits from being collective. Banks, corporates, payment service providers, regulators and technology partners may need to share intelligence faster, align around common signals of risk, and respond together to evolving patterns.
In a real-time payments world, trust will increasingly depend not only on how quickly money moves, but on how confidently the ecosystem can stop the wrong money from moving in the first place.
Many rails, one experience
The payments infrastructure may be diversifying, but the client experience doesn’t have to. At the infrastructure layer, we are likely to see more a broader mix of options as commercial bank money, central bank money, stablecoins and tokenised deposits evolve for different use cases.
The key question is how to prevent that variety from translating into visible complexity for clients, and where the industry can abstract it through better connectivity, standards and interoperability.
From a corporate and institutional client perspective, success isn’t simply measured by the number of payment rails available, but by how seamlessly those rails can be accessed through a consistent, integrated interface.
Clients have existing channels with the bank that they use and have invested in, so making digital assets and deposits work over existing channels, whether it be APIs, SWIFT or Mobile can be an important consideration to scale adoption.
This is where industry collaboration can help. SWIFT, for example, has moved toward a blockchain-based ledger capability intended to support tokenised deposits and 24/7 cross-border payments.
This is important because it points to a model where new forms of regulated digital value may be orchestrated through trusted infrastructure, rather than requiring corporates to connect separately to each emerging network.
The opportunity is to reduce fragmentation at the client connectivity and experience layer, even if different settlement mechanisms continue to coexist underneath. If clients can access multiple forms of money through standardised connectivity, common messaging such as ISO 20022, strong controls and interoperable orchestration, the complexity can be kept away from the end user while innovation continues behind the scenes.
Ultimately, clients often care less about which ledger processes a payment and more about whether it is secure, compliant, interoperable and well-integrated into their treasury operations.
Why modernisation means orchestration
Innovation appears to be scaling globally, but not in a linear way. The rise of neobanks, local regulation and fragmented compliance mean banks are innovating in an environment where the regulatory perimeter can be more localised and dynamic.
For global banks, the challenge is often to maintain consistency in the client experience while still adapting to local rules, data treatment, market practices and supervisory expectations. That complexity can slow innovation in some areas, but it can act as a catalyst for new solutions.
Domestic real-time payments are a good example: what started as local market infrastructure has, over time, shaped global expectations around speed, transparency and availability.
Technology is also changing the economics of delivery. AI is already helping to accelerate parts of the software development lifecycle, from code generation and testing, to documentation and knowledge discovery, which can allow change to be delivered faster and at lower marginal cost.
The harder question for established banks is often not whether they can innovate, but how they do so while managing legacy infrastructure, operational resilience, risk and regulatory obligations. While legacy infrastructure may limit agility, it can also support depth in product capability, market coverage, client confidence and operating scale.
The challenge is to deliver modernisation at pace while preserving these competitive strengths. Three elements can help the banking industry scale innovation in a fragmented world:
- Standardise the experience, localise the obligations: The client journey can be designed to feel consistent across markets, even where regulatory and operational requirements differ underneath.
- Scale connectivity through reusable integrations and capabilities: APIs and microservice architecture can allow new capabilities to be embedded within existing journeys (and into the systems clients already use), while still accommodating local market differences behind the scenes.
- Enable AI-readiness with bank-grade control: AI can help accelerate delivery and support clients in navigating the local operating with appropriate human oversight and controls that meet regulatory expectations.
