An analysis says banks may be able to regain leadership in the cross-border payments market, which has been led by fintech, by leveraging existing account infrastructure and regulatory trust. It points to an overhaul of Swift’s payment system and international links between countries’ real-time payment networks as the basis for the shift.

On Sept. 1, John Rodriguez (존 로드리게스), a senior consultant at TerraPay, argued in an op-ed posted on IT outlet TechRadar that “banks no longer need to simply follow e-wallet-based fintech.” He said banks have existing assets such as accounts and deposits, regulatory frameworks and customer trust.

A major change is the Swift payments scheme. The scheme, which involves more than 60 financial institutions, aims to disclose fees and exchange rates in advance for international remittances, deliver the full remitted amount without intermediary deductions and enable end-to-end tracking of transactions. It is also pushing real-time settlement in sections linked to domestic instant payment networks.

Banks’ biggest strength is that they directly hold the accounts that are the starting and end points of payments. Even if fintech firms and e-wallets attract transactions, much of the money ultimately ends up in regulated bank deposit accounts. If existing accounts are directly linked to overseas wallets and local payment networks, there is room to increase transaction traceability and control compared with the traditional method that goes through multiple correspondent banks.

The shift to ISO 20022 is also a variable. Swift has used ISO 20022 as a global standard for cross-border payment instructions since November last year. It can include more structured information than existing messages, which is advantageous for automated processing, regulatory compliance and customer transaction tracking.

The market is also growing. The World Bank estimates global remittances in 2024 at $905 billion, up about 4 percent from the previous year. In addition to personal remittances, business-to-business payments, platform settlements for creators and freelancers, and overseas transactions by small and medium-sized firms are also expanding.

Banks are also moving. Bank of America announced a cross-border real-time payment service using Swift and its own CashPro platform. Still, such opportunities are not automatically given to all banks. For regional and smaller banks, the cost of building real-time payment networks and ISO 20022 systems is a burden. Ultimately, the key battleground for the banking sector is whether it can turn existing trust and account infrastructure into real digital payment competitiveness.