PODCAST | Cross-border payments at a crossroad - Trade Treasury Payments

• Home
• Blog
• Articles
• PODCAST | Cross-border payments at a crossroad

PODCAST | Cross-border payments at a crossroad

After decades of operational consistency, the cross-border payments industry is changing, driven by generational turnover, technological acceleration, regulatory recalibration, and shifting client expectations. 

While innovation is not new to this sector, the scope and simultaneity of today’s challenges demand a more strategic and system-level response.

To learn more about the structural forces shaping the current state of play in cross-border payments, Trade Treasury Payments (TTP) Trade and Technology Editor Carter Hoffman spoke with Alan Koenigsberg, Founder of Koenigsberg Insights and TTP Editorial Board Member.

Why cross-functional experience matters

One of the most overlooked drivers of effective strategy in financial services is the ability to synthesise insights across functional silos. Professionals who have been exposed to multiple areas of an organisation throughout their careers are uniquely suited for this.

Unlike vertical career trajectories, which often foster deep but narrow expertise, lateral exposure across areas like operations, credit underwriting, customer service, or business development enables a more comprehensive understanding of the systemic interdependencies. 

Koenigsberg said, “My perspective is more unique because I haven’t been in the same discipline my entire career. It doesn’t make anything better or worse, it’s just a different eye, if you will, on the business, which can be useful given how much the business continues to transform right before our eyes.”

Much of the conversation around innovation in treasury centres on the “velocity of change.” However, just because a technology is available doesn’t necessarily mean that the market will want it or that it will find its way into enterprise workflows. Adoption relies on user demand.

Koenigsberg added, “You have to listen to the customer. You have to listen to what they want or, as I love to say, you have to be a geek about your client. When you understand what they do, you can find the suitable level of innovation and risk that they’re willing to accept, and that could be the right solution to what their challenge is.”

Historical examples underscore this dynamic. The digitisation of paper cheques, for instance, had existed in various technical forms for years before it became commercially viable. The critical tipping point emerged not from the technology itself, but from downstream client demand, particularly when organisations sought to eliminate the inefficiencies of lockbox operations.

Historical examples like this can provide valuable lessons for an organisation, but only if the people who were there to experience them first hand are able to pass that knowledge onto future generations before they leave the business. 

The importance of intergenerational knowledge transfer

As of this year, Millennials and Gen Z will comprise approximately 70% of the global workforce. Alongside this shift runs the risk of an erosion of strategic organisational memory. 

Many of the industry’s most critical insights, particularly around risk management, credit cycles, and regulatory nuance, are tacit, not codified. The gut feel of an industry veteran. If institutions fail to proactively transfer this knowledge, they risk repeating past mistakes or overlooking long-term considerations in favour of near-term efficiencies.

Koenigsberg said, “That’s one of the keys to risk management in the future because you won’t find it in the textbook. It comes from those of us, maybe with a little gray hair, going forward and transitioning that knowledge in a meaningful way.”

Embedding mechanisms for structured mentorship, oral histories, and scenario-based learning may prove more valuable than traditional training programmes in preserving and transferring such insights, especially as contemporary employees must contend with the nascent challenges and opportunities that the modern business world provides.

Reassessing the AI imperative

Artificial Intelligence (AI) and Machine Learning (ML) have become ubiquitous buzzwords within cross-border payments, but they have actually been in place for a lot longer than most people think.

Koenigsberg said, “AI has been with Visa for 35 years. Some people will hear that and scratch their head and say no, it couldn’t be true, but these tools have been predicting behaviour on the network from a machine learning perspective for a very long time.”

Machine learning does indeed remain largely retrospective, identifying behavioural patterns based on past data and forecasting future outcomes within predefined bounds. True artificial intelligence (defined as the capacity to generate novel insights or unstructured decision logic) remains emergent and largely aspirational in the sector.

That said, there is a real opportunity in applying AI and ML to automate low-value tasks, such as generating presentations from raw data or conducting repetitive reconciliations. These applications free up human capital for higher-order work and reduce operational costs.

Koenigsberg said, “The future of AI is really taking what we call mundane tasks and automating them, but making them meaningful to the user, giving them additional intelligence, and making their work lives much more productive.

Institutions should not evaluate AI on the basis of sophistication alone but rather on its ability to materially enhance productivity, accuracy, and client experience.

Strategic focus amid complexity

The current operating environment is characterised by regulatory volatility, competitive disruption from fintechs and non-bank entities, and heightened client expectations around digitisation and personalisation. 

In this context, many leaders are confronted with the seemingly impossible mandate of simultaneously innovating, complying, growing, and reducing costs.

Koenigsberg said, “You can’t juggle 10 balls at the same time… you have to look forward to your strategy of execution.”

The most successful organisations are those that resist the urge to respond tactically to every new pressure but instead prioritise based on structural relevance to their strategic positioning. 

Strategic planning, in this context, must be anticipatory. To that end, it should involve scenario modelling, investment in foundational infrastructure, and, perhaps most critically, upskilling customer-facing teams to articulate complex value propositions clearly. Without alignment between back-office innovation and front-line communication, the entire strategic apparatus risks underperformance.

Koenigsberg said, “We built and rolled out a global network at Visa… and spent a lot of time ensuring teams understood not just what it was, but why.”

This line of thinking can be extended to the mindset that traditional financial institutions take towards their fintech counterparts.

Rather than viewing fintechs as existential threats, incumbent institutions can benefit from a posture of strategic partnership, where they seek to leverage external innovation to extend internal capabilities. Again, leaning into the why as well as the how when it comes to communicating these messages to staff.

Koenigsberg said, “It’s not about the bank versus the fintech, it’s about the customer’s choice. … Rather than push fintech away, banks need to partner where it makes sense.”

This is where the power of leveraging external innovation to extend internal capabilities can truly be realised.

—

Institutions that recognise the shift currently underway in the treasury and payments space will be best positioned to capitalise on the next phase of industry transformation. 

Success depends on turning complexity into focus and translating ambition into measurable outcomes.