Name: Payments in 2024: New challenges, regulations, and innovation
Uploaded: 2024-04-03T12:20:17.874Z
Duration: 558.88
Description: Stephen Hutchinson, Head of Operations, IFX Payments, shares the exciting innovations IFX Payments is working on to meet the needs of customers. Hutchinson also talks about the biggest trends that shape this space.

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Stephen Hutchinson.vtt

English

{{00:00:03}}
David Penn: Hi, I'm David Penn,
Research Analyst with Finovate.

{{00:00:05}}
We're here at FinovateEurope
with Stephen Hutchinson.

{{00:00:07}}
He is Head of Operations
with IFX Payments.

{{00:00:09}}
Stephen, thanks for joining us today.

{{00:00:11}}
Pleasure to meet you, David.

{{00:00:12}}
Fantastic.

{{00:00:12}}
Let's jump right in.

{{00:00:13}}
Can you tell us a little bit
about IFX Payments and the

{{00:00:15}}
work you do for the company?

{{00:00:16}}
Stephen Hutchinson: Yeah, sure.

{{00:00:16}}
No problem at all.

{{00:00:17}}
IFX Payments are a rapidly growing
payments fintech who specialize in

{{00:00:21}}
the issuance of virtual IBANs, cross
border payment solutions as well as

{{00:00:26}}
traditional foreign exchange services.

{{00:00:28}}
My role specifically of IFX here is
head of operations which is built

{{00:00:32}}
up of four teams consisting of our
client support team so the guys who

{{00:00:37}}
are on the front line facing off to
our clients on a day to day basis.

{{00:00:40}}
We have a payments and
reconciliation team.

{{00:00:43}}
Who deal with the back end management of
our accounts with our liquidity providers.

{{00:00:49}}
We have a safeguarding team as well
as a client implementation team who

{{00:00:53}}
support our clients from going live
all the way to the other end of the

{{00:00:57}}
scale and completing API integrations.

{{00:01:00}}
David Penn: Interesting.

{{00:01:00}}
Wanted to talk a little bit
about payments, of course.

{{00:01:03}}
One of the things I remember
somebody telling me is payments

{{00:01:05}}
is the gift that keeps on giving.

{{00:01:06}}
So it's always interesting, always a
lot of things going on in payments.

{{00:01:09}}
What are some of the payment
trends in 2024 that you find

{{00:01:12}}
most compelling right now?

{{00:01:13}}
Stephen Hutchinson: I think
there's quite a lot of trends

{{00:01:16}}
around the market at the moment.

{{00:01:17}}
I think real time payments is going
to be one of the first trends.

{{00:01:21}}
Obviously with the launch
of FedNow recently in the U.

{{00:01:24}}
S.

{{00:01:25}}
As recent as yesterday, we had some
rules and regulations being adopted

{{00:01:29}}
by the European Council and a shift
towards SEPA Instant in the Europe.

{{00:01:34}}
We also have schemes further afield
in the world, such as PIX in Brazil

{{00:01:40}}
or UPI in India that's already doing
very well in country and taking off.

{{00:01:45}}
A second trend and something that's
quite new to me, albeit learning very

{{00:01:50}}
rapidly is machine learning and AI.

{{00:01:53}}
Obviously with ChatGPT coming to the
forefront of things within the last 6

{{00:02:00}}
to 12 months, people are now looking
further into how I can benefit our space.

{{00:02:05}}
Examples of that would be compliance
and transactional monitoring.

{{00:02:10}}
Also within operations and the
fintech space that we work in

{{00:02:14}}
decisions are typically made very
quickly based on limited data.

{{00:02:18}}
So AI was also going to give us a lot
better reporting and hopefully lead to us

{{00:02:24}}
making more informed and better decisions.

{{00:02:26}}
David Penn: Sure.

{{00:02:26}}
Yeah, those are huge areas.

{{00:02:28}}
I'm curious, looking at all those
different areas, how are they going

{{00:02:30}}
to impact the work that IFX does?

{{00:02:33}}
Stephen Hutchinson: Yeah what I would
say is it's not just specifically

{{00:02:36}}
operations that's going to be impacted
by these trends and certainly not IFX.

{{00:02:40}}
I think the whole industry will
be impacted by these changes.

{{00:02:44}}
I think we certainly as an industry
have issues when it comes to

{{00:02:48}}
legacy systems and infrastructure.

{{00:02:50}}
I'm going to be very challenging to
break out the old ways of working

{{00:02:55}}
and move to new scalable systems.

{{00:02:59}}
Also involves a lot of training
for different business areas.

{{00:03:03}}
Another sort of key challenge around
that and one that seems to never

{{00:03:07}}
go away is regulatory compliance.

{{00:03:09}}
Regulatory compliance as a landscape
is constantly changing with rules

{{00:03:15}}
coming out of the FCA and other
authorities as such whereby we're

{{00:03:18}}
having to adapt and change quickly.

{{00:03:22}}
Very tight deadlines and obviously
a lot of that is unforeseen.

{{00:03:26}}
So it has to be factored
and accounted for when.

{{00:03:30}}
And yeah, those two points are
probably the most impactful

{{00:03:34}}
as such when it comes to us.

{{00:03:36}}
David Penn: I'd like to talk a
little bit about the challenge

{{00:03:38}}
of keeping up with things.

{{00:03:39}}
You've got very rapidly changing payment
trends, and then you've got regulatory

{{00:03:43}}
bodies that are also giving you new
things to think about all the time.

{{00:03:46}}
How do you keep up with all of that?

{{00:03:47}}
Stephen Hutchinson: It's very hard.

{{00:03:49}}
Speaking completely openly
and honestly, it is very hard.

{{00:03:53}}
IFX at the moment are  doing a real
push on the payments and the instant

{{00:03:58}}
payment topic that we spoke about.

{{00:04:01}}
We're launching local payment routes
in country, starting off in the US

{{00:04:06}}
and expanding as and what sees fit
compared to our customer demand.

{{00:04:12}}
So we're doing a lot of work on
instant payment, going into new

{{00:04:16}}
markets, offering clients rails
and the ability to both collect

{{00:04:21}}
and pay out locally within country.

{{00:04:24}}
See clients these days are any
day, should I say, are very much

{{00:04:27}}
looking towards speed and cost.

{{00:04:30}}
And that is two of the challenges that we
currently have with the Swift landscapes

{{00:04:34}}
as it is with Swift payments, very
costly to send money across the world.

{{00:04:39}}
Not so much transparency as one
would probably obviously we have

{{00:04:44}}
Swift GPI, which has helped us
massively over the last couple

{{00:04:46}}
of years but still transactions
are taking too long to settle.

{{00:04:51}}
Especially when we have differing
time zones with say sending money

{{00:04:54}}
here from the UK to the U S or if we
look at the other side of the world,

{{00:04:57}}
Australia we're often looking at T
plus one, T plus two settlement times.

{{00:05:03}}
Whereby real time payments and using
local in country methods is going to

{{00:05:07}}
allow us to significantly cut down
that time that it takes for the end

{{00:05:11}}
merchant to receive their money.

{{00:05:13}}
Obviously with instant settlement
also provides flexibility to

{{00:05:17}}
merchants and businesses alike
and help some free up cashflow and

{{00:05:22}}
allow for better financial planning.

{{00:05:24}}
David Penn: You mentioned both the time
issue as well as some of the regulatory

{{00:05:27}}
issues and things that come up.

{{00:05:29}}
Are there any other types of concerns
or challenges about these trends that

{{00:05:33}}
you're really having to tackle right now?

{{00:05:35}}
Stephen Hutchinson: I
wouldn't say concerns.

{{00:05:37}}
I think change is always or should always
be seen as a good thing, especially when

{{00:05:41}}
there's a benefit at the end of the line.

{{00:05:44}}
What I would say is that IFX are also
like many other EMIs and FIs within the

{{00:05:49}}
space are doing a very big piece of work
at the moment on migration to ISO 20022

{{00:05:55}}
standards, which naturally long term is
going to provide a better, more enriched

{{00:05:59}}
data structure, global adoption and
we'll aid with quick settlement as well

{{00:06:06}}
as benefits and on the compliance side
of things, giving us more transparency

{{00:06:10}}
around what our clients are actually doing
and the structuring of those messages.

{{00:06:14}}
David Penn: Interesting.

{{00:06:15}}
I thought maybe by way of wrapping up,
you've already mentioned a couple of

{{00:06:17}}
the sort of initiatives that that IFX is
involved in the expansion and so forth.

{{00:06:21}}
Are there any other things in 2024
that maybe we can look out for that

{{00:06:25}}
we might be able to see a year out
for that you guys are working on?

{{00:06:27}}
Stephen Hutchinson: Yeah, I think.

{{00:06:28}}
As a whole, those two specifically, I
think what I would like to talk about is

{{00:06:33}}
what the operations space are specifically
doing within the next 12 months.

{{00:06:39}}
In order to keep up with these trends
we are doing a large exercise at the

{{00:06:43}}
moment whereby we're trying to approve,
improve our operational efficiency.

{{00:06:48}}
So we've completed over the last couple
of months a very comprehensive process

{{00:06:52}}
mapping exercise, which is then going
to move into an analysis phase whereby

{{00:06:58}}
we're going to be looking at what
areas are taking us the most time?

{{00:07:02}}
Where are we getting involved in
manual processing as a bit too much?

{{00:07:06}}
Obviously going back to what we mentioned
around real time payments and STP, so

{{00:07:10}}
straight through processing, we want to
be touching our client's instructions and

{{00:07:15}}
really our clients as little as possible.

{{00:07:17}}
And we want to ensure that
payments are, once they're keyed.

{{00:07:21}}
They go through validation quickly and
they're sent out into payment rails and

{{00:07:25}}
infrastructure as quickly as possible
with as little human interaction.

{{00:07:29}}
So we're, doing a conclusive exercise on
mapping out our processes, finding out

{{00:07:34}}
where the areas of manual intervention
are perhaps a little bit too high

{{00:07:38}}
and looking at scalable solutions.

{{00:07:41}}
We are also feeding into that topic
nicely looking at risk as well.

{{00:07:46}}
Manual processing of course
comes with varying levels of risk

{{00:07:50}}
depending on what you're doing.

{{00:07:51}}
So a key challenge and topic within
my space for this year and focus

{{00:07:58}}
will be to dramatically reduce
the amount of risk that we've got.

{{00:08:02}}
Which also feeds nicely back
into the point I mentioned

{{00:08:04}}
around AI and machine learning.

{{00:08:07}}
Activities like that and systems
like that are giving us real better

{{00:08:11}}
data and output and allowing for
stakeholders internally, should I

{{00:08:13}}
say, to be making better decisions.

{{00:08:16}}
And lastly, and I think the most
important for specifically an

{{00:08:19}}
operations function and serving our
client base is to continuously work

{{00:08:24}}
on and improve our client experience.

{{00:08:27}}
We've done some very exciting stuff
over the last six to 12 months in terms

{{00:08:31}}
of automation, allowing our clients to
self service without having the need to

{{00:08:36}}
phone and speak to a human at all times.

{{00:08:38}}
We've published and produced some very
good help articles on our platform,

{{00:08:43}}
as well as providing our clients and
people who are generally interested in

{{00:08:46}}
our space with a lot more information
on what's going on in the space and what

{{00:08:51}}
IFX are specifically doing to combat the
challenges that we and other EMIs and

{{00:08:56}}
FIs are facing on a day to day basis.

{{00:08:59}}
David Penn: Interesting.

{{00:08:59}}
It's an exciting time for payments.

{{00:09:00}}
It sounds like a very
exciting time for IFX as well.

{{00:09:03}}
Fantastic.

{{00:09:04}}
Thank you very much for spending a
little bit of time with us, helping

{{00:09:06}}
us get to know IFX Payments, and
we're looking forward to hearing

{{00:09:08}}
more about the company in the future.

{{00:09:09}}
Stephen Hutchinson: No,
more than welcome, David.

{{00:09:10}}
It's been a pleasure to meet you today.

{{00:09:11}}
Fantastic.

{{00:09:12}}
David Penn: Thank you for
joining us and thank you as well.

{{00:09:14}}
Stephen Hutchinson: Excellent.

David Penn: Hi, I'm David Penn,
Research Analyst with Finovate.

We're here at FinovateEurope
with Stephen Hutchinson.

He is Head of Operations
with IFX Payments.

Can you tell us a little bit
about IFX Payments and the

IFX Payments are a rapidly growing
payments fintech who specialize in

the issuance of virtual IBANs, cross
border payment solutions as well as

My role specifically of IFX here is
head of operations which is built

up of four teams consisting of our
client support team so the guys who

are on the front line facing off to
our clients on a day to day basis.

We have a payments and
reconciliation team.

Who deal with the back end management of
our accounts with our liquidity providers.

We have a safeguarding team as well
as a client implementation team who

support our clients from going live
all the way to the other end of the

Wanted to talk a little bit
about payments, of course.

One of the things I remember
somebody telling me is payments

So it's always interesting, always a
lot of things going on in payments.

What are some of the payment
trends in 2024 that you find

Stephen Hutchinson: I think
there's quite a lot of trends

I think real time payments is going
to be one of the first trends.

Obviously with the launch
of FedNow recently in the U.

As recent as yesterday, we had some
rules and regulations being adopted

by the European Council and a shift
towards SEPA Instant in the Europe.

We also have schemes further afield
in the world, such as PIX in Brazil

or UPI in India that's already doing
very well in country and taking off.

A second trend and something that's
quite new to me, albeit learning very

Obviously with ChatGPT coming to the
forefront of things within the last 6

to 12 months, people are now looking
further into how I can benefit our space.

Examples of that would be compliance
and transactional monitoring.

Also within operations and the
fintech space that we work in

decisions are typically made very
quickly based on limited data.

So AI was also going to give us a lot
better reporting and hopefully lead to us

making more informed and better decisions.

I'm curious, looking at all those
different areas, how are they going

Stephen Hutchinson: Yeah what I would
say is it's not just specifically

operations that's going to be impacted
by these trends and certainly not IFX.

I think the whole industry will
be impacted by these changes.

I think we certainly as an industry
have issues when it comes to

I'm going to be very challenging to
break out the old ways of working

Also involves a lot of training
for different business areas.

Another sort of key challenge around
that and one that seems to never

Regulatory compliance as a landscape
is constantly changing with rules

coming out of the FCA and other
authorities as such whereby we're

Very tight deadlines and obviously
a lot of that is unforeseen.

So it has to be factored
and accounted for when.

And yeah, those two points are
probably the most impactful

David Penn: I'd like to talk a
little bit about the challenge

You've got very rapidly changing payment
trends, and then you've got regulatory

bodies that are also giving you new
things to think about all the time.

Speaking completely openly
and honestly, it is very hard.

IFX at the moment are  doing a real
push on the payments and the instant

We're launching local payment routes
in country, starting off in the US

and expanding as and what sees fit
compared to our customer demand.

So we're doing a lot of work on
instant payment, going into new

markets, offering clients rails
and the ability to both collect

See clients these days are any
day, should I say, are very much

And that is two of the challenges that we
currently have with the Swift landscapes

as it is with Swift payments, very
costly to send money across the world.

Not so much transparency as one
would probably obviously we have

Swift GPI, which has helped us
massively over the last couple

of years but still transactions
are taking too long to settle.

Especially when we have differing
time zones with say sending money

here from the UK to the U S or if we
look at the other side of the world,

Australia we're often looking at T
plus one, T plus two settlement times.

Whereby real time payments and using
local in country methods is going to

allow us to significantly cut down
that time that it takes for the end

Obviously with instant settlement
also provides flexibility to

merchants and businesses alike
and help some free up cashflow and

David Penn: You mentioned both the time
issue as well as some of the regulatory

FinovateEurope

Trend

Stephen Hutchinson, Head of Operations, IFX Payments, shares the exciting innovations IFX Payments is working on to meet the needs of customers. Hutchinson also talks about the biggest trends that shape this space.