Banks Race to Close Real-Time Payment Gaps

Watch more: What’s Next in Payments With Serena Smith of i2c

As the payments industry moves deeper into 2026, executives are confronting a widening gap between innovation and coherence. New rails are coming online. Regulatory expectations continue to evolve. Standards adoption presses forward. Artificial intelligence (AI) introduces new operating models.

Each advance carries promise, yet together they have produced a system that is faster but increasingly fragmented.

That tension framed a recent “What’s Next in Payments” conversation hosted by PYMNTS with Serena Smith, chief client officer at i2c. Asked to distill the year’s defining theme into a single concept, Smith pointed to interoperability.

“We all have to figure out a way, especially with AI, to look across and bring together all of those payment channels so that we can fight fraud and we can create better customer experiences,” she told PYMNTS. “We can also make sure that, from a compliance and a regulatory standpoint, we’re doing all of the right things that we need to do in order to serve customers.”

Her argument reflects a structural shift underway across financial services. Institutions now operate amid more rails, more standards and more regulatory frameworks than ever before. Each initiative makes sense on its own. The difficulty arises when they intersect.

“Each of those initiatives make sense individually,” Smith said. “But collectively they create a coordination problem that, really, all of us need to start working through.”

Fraud Finds the Gaps

That coordination problem surfaces inside organizations as architectural strain. Smith noted that institutions continue to add capabilities faster than they simplify their core systems. Every new integration introduces cost, operational friction and exposure. Even when short-term solutions succeed, fragmentation makes it harder to apply consistent controls across channels.

Fraud exploits those weaknesses with growing efficiency. Smith described how scams, account compromises and identity attacks now unfold in real time, often moving across multiple rails before institutions can respond.

“The time to detect and intervene keeps shrinking,” she said. “Post-transaction monitoring wasn’t built for instant or irreversible payments. So, we have to rethink how we’re actually managing those systems.”

Settlement speeds compress reaction windows, leaving little room for remediation after execution. When controls lag transactions, gaps emerge that are increasingly difficult to close. Smith emphasized that this dynamic elevates the importance of embedding identity, authorization and compliance directly into payment flows, rather than treating them as downstream processes.

Her greatest concern, however, extends beyond operational losses.

“What keeps me up at night is really the risk of losing trust,” Smith said. “Trust in our systems, trust in our technology, trust in what we’re building for the future.”

Trust erodes when money behaves inconsistently across channels, when fraud slips through fragmented controls and when institutions struggle to keep pace with real-time execution. As payments become faster and more final, customers expect reliability by default. Anything less places institutional credibility at risk.

Making Consistency the Standard

For Smith, interoperability offers a practical way to restore coherence, but only if treated as foundational infrastructure rather than a collection of adapters. Platforms must be designed to extend and configure, she said, instead of being assembled piece by piece. The objective is to allow institutions to connect data across rails, apply consistent controls, and scale new capabilities without destabilizing what already exists.

Her measure of success for 2026 reflects that architectural discipline.

“Success is being able to move money faster without adding operational risk or complexity,” Smith said.

In practical terms, that means fewer custom integrations, smoother launches of new payment capabilities and teams spending less time chasing exceptions and more time improving customer experience. Real-time execution, she added, should become predictable and trusted rather than something institutions approach cautiously.

She also said that she expects interoperability to move from aspiration to requirement.

“I think it has to,” Smith said when asked whether interoperability becomes table stakes. “Money does need to behave consistently, regardless of the rail region or channel that it’s in.”

That consistency is ultimately what customers notice, even if they never see the infrastructure beneath it. When money moves reliably, experiences improve. When controls are unified, fraud becomes harder to scale.

Smith closed by returning to the same principle that opened the conversation: The industry’s progress will be measured by its ability to operationalize interoperability.

“Institutions should feel comfortable scaling real-time payment channels instead of being cautious about them,” she said.