Redefining cross-border payments: Building the future, now
Cross-border payments are undergoing rapid transformation as retail banks partner with financial institutions (FIs) to deliver faster, safer, and more transparent global transactions. Here, we’ll explore how modernization, AI, and multi-rail architectures are helping FIs build the next generation of seamless, resilient cross-border systems.
The urgency to redefine cross-border payments
Historically, global payments have been characterized by significant friction. Traditional cross-border transactions often involved multiple correspondent banks, each contributing additional fees and processing delays. With market volumes projected to surpass $250 trillion by 2027, FIs are rethinking their infrastructure to support real-time, low-cost cross-border payments.
Cross-border modernization is now crucial for FIs as global trade expands and customer expectations grow relentlessly. Consumers and businesses today seek faster, safer, more cost-efficient and transparent methods for sending and receiving cross-border payments, both from retail and corporate clients. With the rise in these demands, there is a distinct sense of urgency for innovation.
With over 70 countries adopting instant, real-time payments across borders and the global migration of legacy systems to ISO 20022, banks and other FIs must stay competitive. By modernizing their comprehensive cross-border systems to offer better customer service, meet regulations, and support global growth, they can achieve this.
The role of modernization and ISO 20022 in cross-border payments
Global payment modernization and ISO 20022 are pivotal factors in transforming how money moves across borders since they drive a more connected and efficient financial ecosystem. ISO 20022 enables richer data exchange, standardizes formats across systems, and improves interoperability between different market infrastructures. Adopting this standard is crucial for banks to evolve and enhance their entire payment landscape, as all payment types - from high-value domestic to cross-border payments - transition to this data standard.
Bridging the gap between structured and unstructured data, the introduction of AI to payments and other banking processes (such as sanctions screening, exception handling and liquidity management) has proven to streamline processing, increase transparency, reduce manual labor, reduce friction, and enhance customer service. In addition, ISO 20022’s structured data across all transaction types can power AI and machine learning to detect fraud and money laundering more quickly and accurately, reducing the complexity and costs associated with handling false positives, making it a crucial element for the next generation of banking.
Meanwhile, cloud-native, API-first systems offer the flexibility, interoperability, and scalability required to meet compliance requirements, facilitate seamless cross-border payments, and position FIs for long-term growth. They can also reduce costs and risks associated with legacy architectures, delivering the speed, agility and resilience required in today’s payments landscape.
Multi-rail payment hubs: The backbone of future cross-border systems
Multi-rail payment hubs allow banks to process payments across all networks through a single platform. This unified payments solution centralizes routing and orchestration, allowing for greater flexibility around cross-border payments. For example, a payment received via Swift can be completed domestically over a local instant payment scheme or a modernized bulk clearing rail, allowing for greater speed and efficiency at a lower cost.
Additionally, the ease of adding new rails, such as Visa Direct, Mastercard Send or Circle’s digital asset infrastructure, increases the options for efficient execution of cross-border payments that are typically lacking in monolithic systems.
This highly modular and composable architecture reduces overall operational costs, future-proofs infrastructure, and accelerates growth. It is a crucial element of payments modernization, and FIs that do not adopt this approach risk falling behind due to the higher cost, effort, and risk of maintaining legacy payments ecosystems.
The power of AI, analytics, and intelligent routing in cross-border payments
Historically, cross-border payments have been affected by delays, opacity, uncertain fees, and operational inefficiencies. AI tools are rapidly improving the speed, accuracy, and efficiency at every stage of the payments workflow and emerging as one of the most transformative forces in modernizing cross-border payments.
AI automation and advanced analytics in payment processing
A primary driver of this shift is the move to agentic AI, exemplified by our OperatorAssist solution. Designed to address the high costs of payment errors and inefficient exception handling, this AI-powered solution integrates directly into the payment hub user interface. By analyzing payment patterns and historical data, OperatorAssist acts as a virtual expert, recommending repairs and offering real-time support. OperatorAssist is available to users of Global PAYplus and Payments To Go, extending our cloud-native payments capabilities with optional additional AI functionality that improves speed, resilience, and customer outcomes.
As important as speed is to cross-border payments, regulatory compliance needs to be maintained to the highest degree. Advanced analytics play an essential role in real-time fraud detection and sanctions screening. By processing vast volumes of data faster than traditional rule-based systems, AI can identify anomalies, suspicious patterns or compliance risks with greater accuracy and efficiency.
The importance of intelligent routing
As discussed above, traditional crossborder payments via correspondent banking face challenges such as slow settlement, opaque fees, limited tracking, high repair rates, inefficient nostro liquidity management, inconsistent service quality, and compliance complexity. These are problems exacerbated by long, complex intermediary chains.
Automation tools, such as Finastra’s Intelligent Routing address these issues by dynamically selecting optimal payment routes based on factors including cost, speed, compliance alignment, and historical performance. By reducing unnecessary intermediaries and improving straight-through processing, these tools enhance transparency, predictability, and reliability—modernising correspondent banking without fully replacing it.
Partnerships and ecosystem collaboration
No FI can realistically succeed in this climate without forming strategic alliances with fintechs and other FIs. While the use of other FIs brings trust and regional compliance and expertise to offer more personalized services to customers and businesses, fintechs can provide speed, agility, and new technology solutions. It is this holistic approach that enables banks to adapt to the new era of banking.
Our report ‘Embracing the future of cross-border payments’ outlines how collaboration with networks, like Swift and technology players such as Circle, can accelerate innovation for retail banks without completely replacing legacy systems. It also presents an opportunity to explore new corridors, currencies and emerging payment rails, helping to extend and streamline cross-border payments coverage. In addition, especially for mid-market FIs, working with partners that offer a Payments-as-a-Service (PaaS) solution, FIs can offload infrastructure management, freeing them to focus on customer growth and strategic expansion.
By adopting solutions that follow an API-first approach, banks can seamlessly introduce value-added services (VAS) such as real-time fraud management and compliance, and enhanced reporting. By utilizing VAS as part of a payment modernization strategy, FIs enable faster and more accurate data processing,, leading to higher automation and operational efficiency essential to manage the growing volumes of payments across all rails.
To ensure interoperability, transparency, and accessibility, FIs need to align with the targets of the G20 cross-border roadmap. Finastra continues to track initiatives such as BIS Nexus, a program designed to connect multiple national instant payment systems from various countries into a unified network, facilitating instant cross-border payments. Actively supporting compliance and helping FIs deliver on the expectations of a digitally connected global market, these partnerships and ecosystem collaborations are intrinsic to the modernization of the cross-border payments landscape.
Building resiliency in cross-border operations
Resilience, reliability, and regulatory compliance all underpin Finastra’s promise of ‘modern payments with peace of mind’. Finastra Global PAYplus is a robust payment hub solution that helps FIs modernize their infrastructure to handle both domestic and cross‑border payments, including alternate cross-border payment methods such as Visa Direct and Mastercard Send. The solution’s strength lies in the high quality and configurability of its validation and enrichment processing, which ensures payments are transaction-ready from the start. By streamlining complex workflows, Global PAYplus allows FIs to manage vast transaction volumes with ease, driving operational efficiency. Furthermore, the solution is engineered for high availability, providing the consistent uptime and reliability needed for global payment systems. While, to address the unique challenges of mid-market FIs, such as budget and IT staff constraints, we offer this world class processing in a Payments-as-a-Service model with Finastra Payments To Go. Whatever the size of FI, Finastra is able to level the playing field for access to modern, payments technology.
Further developing this transparency and resilience is an end-to-end approach to connectivity. Finastra’s Financial Messaging serves as the high-performance gateway for our payments hub, acting as a cloud-ready messaging backbone that connects banks seamlessly to global networks like Swift (including Swift GPI), Thunes and Mastercard Send. By integrating this messaging layer directly with the payments hub, FIs gain a full end-to-end solution. This configuration provides real-time tracking and transparency across cross-border rails and the capacity to process millions of messages with industry-leading uptime. Furthermore, with modular, cloud-based deployment options, we ensure the entire ecosystem remains flexible and compliant.
Redefining the processing of cross-border payments is already a reality within the payments landscape. By embracing modernization through the introduction of cloud-native, API-first, multi-rail payment hubs which are ISO 20022-native, incorporate AI-driven processing, and are pre-integrated with fintechs providing VAS, FIs can deliver faster, more transparent and cost-efficient domestic and cross-border payments.
At Finastra, we are helping to build the future of cross-border payments with confidence, helping to deliver exceptional customer service, transparency and resiliency. Discover how you can transform your banking process with Finastra’s Global PAYplus and Payments To Go solutions.
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