Expert Insights: BIL – A bank’s perspective on the payments landscape

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Published on
April 8, 2024

In this cross interview, we delve into the insights of Serge Munten, Head of Business Transformation and Maria Kristensen, Business Innovation Lead at BIL and Raoul Mulheims, CEO of Finologee, as they discuss the dynamic landscape of payments, bank account management and collaborative efforts shaping the industry.

How does BIL position itself in the area of corporate payments?

In highlighting BIL’s pivotal role, Serge Munten, the bank’s Head of Business Transformation, states: “BIL’s historical position as a Swift Service Bureau and payment infrastructure operator is crucial, not only for our institution but also for other banks and infrastructure entities in Luxembourg and abroad.” This strategic standing enables BIL to actively drive and facilitate transactions and provide a solid foundation for operations and partnerships within the financial industry.” Mr Munten adds: “Our rather unique position allows us to influence the evolving payments landscape, contributing to both our institution’s growth and the broader financial ecosystem in the Grand Duchy. BIL is actively looking for opportunities to collaborate and create partnerships across the financial marketplace to be able to bring standardised solutions to regulatory or market infrastructure requirements without hindering competition.”

What recent evolutions in payments drive and fuel innovation?

Raoul Mulheims, CEO at Finologee, emphasises: “In broad terms, regulatory frameworks such as PSD2, PSD3 and PSR are restructuring the payments landscape for all participants in the financial industry.” According to Mr Mulheims, these transformative changes not only drive innovation in open banking but also elevate security and pave the way for the introduction of novel financial services. The emergence of instant payments, as highlighted by Mr Mulheims, significantly alters the fundamental dynamics of transactions, creating a more responsive and efficient financial ecosystem. “Moreover, the implementation of ISO20022 represents a monumental shift, unlocking more comprehensive data and enhancing the transparency of global transactions.”

Maria Kristensen adds “Correct, while ISO20022 promises significant benefits, it also presents challenges for the financial players as they adapt to this new standard. Standardisation among the different players is key to reaching those benefits. Legacy systems are not designed for ISO20022 and standards interpretations could slow down the move to rich data. This is where collaboration within the industry can help identify smarter ways of incorporating ISO2022.”

Mr Munten also emphasises the need to explore new service layers and features such as the Swift Essentials value proposition to effectively integrate additional data into payment systems and channels.

As the correspondent banking landscape evolves, Mr Munten highlights the industry’s shift towards digital payment services, exemplified by major developments such as central bank digital currencies (CBDCs). He stresses the valuable lessons that can be learned from the experiences that Sweden and Singapore, for example, have had with their CBDC projects. Singapore will trial the issuance and use of wholesale digital currencies by the central bank in 2024, he explains, while the Riksbank launched an e-krona project back in 2017, developed a proof of concept and has since been studying the technological and policy implications of CBDC in depth. Mr Munten suggests that ongoing initiatives such as the digital euro could benefit from exploring these and similar approaches. Of particular importance, he says, is the sensitivity of the data associated with central bank money: “It is recognised that this data, if handled carefully, could find valuable applications in a business context.”

What are current topics high on BIL’s agenda?

“What is particularly noteworthy is the topic of seamlessly integrating payment flows into economic operations, making payments less visible and ensuring a frictionless experience”, Mr Munten stresses. The current perception of payments as potential obstacles is evolving, with the industry shifting towards more integrated solutions. He envisions a future where payments effortlessly blend into the overall economic landscape, becoming an integral and harmonious component. This evolution will bring benefits especially to corporate clients who would be able to better manage liquidity flow via faster, more transparent and more secure payment solutions. Raoul Mulheims agrees: “Yes, this is also something that we at Finologee, especially with our banks and accounts management platform LYNKS, are trying to facilitate.” According to Mr Mulheims, the aim is to transform corporate payments processes, by streamlining them and by reducing friction. He provides a concrete example of this effort, sharing: “We have just launched a feature on direct debit fee collection through LYNKS, which can be triggered via the LYNKS platform or another corporate system in use, directly integrated within our platform. This avoids lengthy and cumbersome processes, allowing for streamlined fee charging across all accounts, including those for fund administrators.”

Maria Kristensen adds: “With the EU Instant Payment regulation making payments within 10 seconds the new normal in 2025, there is a lot of work for BIL to do in 2024. BIL has been the first bank to offer Instant Payments to customers, already in 2020, via our mobile banking solution, but we will be expanding this service in 2025.  In addition, BIL will offer the possibility for other PSPs to connect directly or indirectly to our solution to be able to provide instant payments to their own customers. This is how BIL wants to support the marketplace.”

To continue reading, go to the Finologee website.