Bruno Mellado (BNP Paribas):
Toward the future
of instant payments
Global head of payments and receivables Bruno Mellado says that innovation strategies including co-operation with fintech firms are helping BNP Paribas accelerate toward a future where payments are invisible, seamless and instantaneous.
How is the payment landscape is evolving ?
The payment environment had changed very little for a very long time, but over the past three years it has been evolving at unprecedented speed – making the payment business much more attractive for professionals and companies with new technologies and investments. Blockchain still has a scalability issue to be addressed before it can become a payment solution, but it has proved a great catalyst for improvement in existing information rich processes between banks. On the other hand, proven technologies such as cloud computing and APIs are delivering significant added value to payments. Until recently there was no means of checking on when international payments reached the beneficiary, but thanks to collaboration with SWIFT, a new standard called gpi allows 50% of transactions to be credited within five minutes – a drastic change. Technology is one driver of change ; competition is the other. Certain fintech firms have started to rethink payments and triggered existing players to do the same. However, innovation requires adoption, which is linked to accessibility. If an influential institution with a collaborative approach onboards a new technology, it is more likely to spread within its ecosystem of partners than in the case of a smaller player in a more limited market. Collaboration and access are critical.
How does BNP Paribas tackles innovation ?
We are active on three different fronts. First, BNP Paribas remains very close to its client base and is always looking to identify their problems – especially in the corporate area, where we organise cash management and payment forums at which clients can discuss the obstacles they face. This dialogue helps us draw up a roadmap for relevant areas of innovation. Secondly, we are an influential voice among our peers within the domestic, regional and global industry through organisations such as the EPC in Europe or NACHA in the US to define the payment innovation agenda and bring our clients’ needs to the forefront of discussions. In the case of SWIFT gpi, we collaborated with corporate clients in design sessions and incorporated their concerns into our agenda. In addition, we have established a fintech lab to engage with new companies, understand what they are doing and take stock of the competition. A collaborative approach works much better than head-on rivalry and underlines BNP Paribas’s ability to integrate, alongside its own offering, the best services of third parties and to understand their relevance and strengths. So far, we have screened 200 fintech firms, met around 80, analysed more than 30 in detail and are now directly working with 14. We refer some to our clients, integrate others into our offering, and invest in a few. These firms benefit from our client base, our services and in some cases our investment.
What future developments can we expect in the payment field?
The ultimate goal is for payments to become invisible. They will happen in the background of a commercial transaction, seamlessly in real time, and everyone will enjoy a complete picture of what funds are moving in or out, and whom they are coming from or going to. This will come at a cost, however, and I believe some banks will not be able to keep up with the level of infrastructure investment required to move to global standards. BNP Paribas has the resources and capability to deploy this strategy with local and international payment means.