Business

Reflections on EBAday 2023, from Wise Platform

Wise

12.07.23 (updated more than 1 year ago)

Read time 2 minutes

Last week, Wise Platform travelled to Madrid for The European Banking Association's annual conference, EBAday. The conference brings together key players from across the banking industry in Europe and beyond to discuss a wide range of pressing topics, from international payments, to regulation and correspondent banking. It was a highly valuable experience for our team, and we wanted to share a bit about our key takeaways.

Wise Platform kicked off the week by hosting a breakfast roundtable, where we were joined by representatives from over 20 of the world’s largest banks. Topics included Instant Payments, the future of correspondent banking, and improving customer experience while bringing down cost. The discussion was lively and informative, and demonstrated how willing we are as an industry to collaborate and bring innovative financial solutions to customers around the world.

Panel session

Steve Naudé, head of Wise Platform

Later the same day, Steve Naudé, Head of Wise Platform, sat on a panel to discuss ‘The status of immediate cross-border payments’ with an impressive lineup of companies, including JP Morgan, EBA Clearing and Ceca Bank. The discussion centred around whether instant cross-border payments are possible or even necessary, and what the benefits would be to customers. But as Steve explained, instant cross-border payments are actually already here. 55% of payments made via Wise arrive instantly (in under 20 seconds) to the beneficiary's account, and 93% arrive in under an hour. There’s a lot to do to get that number to 100%, but we’re over half way there.

The panel also discussed whether instant payments are important for large businesses, who often look to settle payments on a set day (on-time payments) versus immediately (real time payments). On this, Steve outlined that we should look at the benefits of instant payments from two perspectives: the benefits for customers, and the benefit for banks/FIs.

For customers, the benefits might be more obvious. Instant payments means assurance that your money is where it's meant to be, and that you gain a real-time view of your cash flow. For banks and FIs, the benefits are less intuitive. There’s always going to be cost and technical resources that go into speeding up payments across borders, which can make it hard for large banks in particular to prioritise. But from experience at Wise, we know that offering instant international payments can reduce contacts by up to 80%. When every contact also incurs a cost (approximately £50 per contact), instant payments make a lot of sense from a business perspective, too.

Correspondent Banking

As our team spoke to delegates and sat in on keynotes and panels throughout the event, another significant theme we noticed was correspondent banking and its relevance in the modern financial landscape.

Correspondent banking, which has traditionally served as a bridge between financial institutions across borders, has faced scrutiny in recent years due to its limitations and associated costs. The debate centred around whether correspondent services have become obsolete, or are just in need of modernisation.

At Wise, we think about this question in terms of two distinct use cases. For low value clearing, we have spent over a decade building a global payment network that eliminates the need for correspondent banks altogether. Our unique structure means that money never actually moves across borders. Instead, payments made in and out are always executed on local rails.

For higher value transactions, we still need correspondents to serve as intermediaries. But we should still be trying to reduce the number of links in the correspondent chain to speed up these payments and reduce the costs associated with moving money across borders.

EBAday 2023 was, as always, an important event for us at Wise Platform. Over just 2 days, we connected with a range of banks and experts across the industry, and shared our own expertise when it comes to instant cross-border payments. After lively conversations, thought-provoking debates, and insightful panels, we headed home newly energised to play our part in the future of financial services, alongside peers from all over the world.
We look forward to next year in Lisbon!

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