"I don't want to talk about it from a real-time settlement perspective," Halpin said. "The way we experience our business journeys has to be as nimble as any
In an interview, Halpin, who has been in his current role for about two and a half years, discussed the competitive edge available from advancements in real-time payments, new forms of artificial intelligence and digital assets such as central bank digital currencies.
A key element of the bank's strategy is harnessing the benefits of real-time payments that go beyond instant processing, particularly as businesses manage the challenges associated with moving funds across borders. While most real-time payment systems around the world are focused on domestic payments,
"This will be a moment for real-time payments," Halpin said. "You'll get more insights, more structured data and new information. That will improve risk controls and practices."
Global stakes
"Real time payments is really an information exchange at a higher level," Halpin said.
This can create more context around a transaction, improving tasks for businesses as varied as inventory, supply-chain tracking, product sourcing and the financial management requirements that surround these tasks. The data that real-time payments produce can inform these activities and can determine when a payment should or can be made, thus improving liquidity.
"How can all of this be turned into a working capital benefit? That's what real-time payments can do," Halpin said.
Higher interest rates provide numerous challenges for businesses such as financing, liquidity and the overall cost of operations. But there is also an opportunity for banks in making these processes simpler by analyzing payments and business data and providing liquidity tools that match that data.
"We're in 56 markets, and can help businesses focus on what's going to be needed … we can act as a single repository for treasury management," Halpin said, adding that it can help firms organize international activities around specific markets that are more efficient or inexpensive at a single point in time.
Smooth payment processing is necessary for this strategy to work, he said. As banks compete to offer
While that sounds basic, a large number of banks are not yet on board with one of the main protocols. The ISO 20022 standard will guide the messaging used in international payments, attempting to clarify information about transactions, the participants and improve tracking, yielding much of the improved payment data that Halpin discussed.
Partly due to work on other IT initiatives, more than a third of U.S. banks may miss the
"A big part of anything in payments is the utilization of a common standard," Halpin said. "It provides much more structure. I remember when ISO 20022 was first being discussed, it was said it would improve anti-money-laundering and sanctions screening. But it's being made better now and can provide benefits at a whole other level."
AI and partnerships
Like most banks,
For example, the bank is applying it to combat
Other emerging uses include currency management. AI, for example, can tell recipients who are getting paid in pounds if the exchange rate would be better with another currency in near-real-time.
Another evolving strategy is digital assets, with a focus on how distributed ledgers and related technology can aid cross-border payment flows.
The bank's work in digital assets includes participating in a proof of concept for the Regulated Liability Network for wholesale payments operating on a shared multi-entity distributed ledger.
In a cross-border digital payment use case,
"So, much like today's correspondent banking system, there is an intermediary bank, here
RLN exists alongside other projects such as the Bank of International Settlements'
"This is more disruptive because it could disintermediate a bank like
One of the challenges is the different pace of
"We know that at certain times, different countries may work at a faster pace than others, but we can shift into markets to create products for clients when the opportunity arises," Halpin said.