A Security Lapse Is Just A Bump In The Road To Faster, Better B2B Payments

The interbank messaging firm SWIFT has had a rough few months. Cyberattackers were able to steal $81 million from the Bangladesh central bank by compromising the SWIFT messaging system, forcing the company — and financial services players everywhere — to take a renewed look at payments security measures.

The security compromise hasn’t led FinServ firms to shy away from the global payments messaging company, however.

Earlier this month, Dutch B2B payments company PowertoPay announced it had secured certification to incorporate SWIFT’s Alliance Lite2 into its cash management platform. Doing so enables corporate users of PowertoPay to gain access to SWIFT’s global interbank connectivity; according to PowertoPay, the integration means businesses can access more than 11,000 financial institutions throughout the planet to carry out their payment needs.

Amid a heightened demand for corporate payments security, in conjunction with various faster payments initiatives in Europe, PowertoPay Cofounders Frank Nolden and Bas Huisman spoke with PYMNTS about how businesses are navigating an evolving, and sometimes tumultuous, payments landscape.

The changes, the executives said, are exponential.

“Not only the payment landscape is changing,” said Nolden, the firm’s CEO, and Huisman, its CCO. They cited the current PSD2 regulations that aim to streamline payments and encourage FinTech innovation.

Efforts like these, Nolden and Huisman noted, are changing the relationships between FinTech players, banks, corporations and their customers.

“Working closely together in the industry is a must,” they said. “FinTech is not something the banks should be afraid of. They should welcome this as change and see it as an opportunity to become an influencer.”

Collaboration will be key to developing FinTech solutions for corporates, but these industry players must also pay attention to what the enterprise needs, they added.

“Corporates are moving up globally and are requesting new functionalities, like faster payments, supply chain finance and other process improvements,” said Nolden and Huisman.

And on top of the race to create newer services to meet these needs, some of the most basic tasks remain a challenge for corporations seeking out a better way to manage their money and payments.

“New improvements are great but do not forget that most of the corporates are still struggling with entering data into, or retrieving data from, their current systems,” the executives noted. “There are still a lot of spaghetti solutions between the silos in the corporate environment.”

Payments Security

There is a clamor in the FinTech industry to develop new solutions, and these innovations both challenge and participate with traditional banks. But while the focus often lands on adding new tools to the market, the recent SWIFT security breach is a reminder that payments security should remain paramount — within legacy finance systems and emerging ones.

Nolden and Huisman argued that payments security will always be the top priority for corporations when it comes to finances and payments.

Their demand for faster payments — which has spanned decades, they said — has always included the need for assurance that faster payments won’t mean insecure payments.

“The most important aspect of payments is the security around it,” the CEO and CCO stated. “Naturally, corporate treasurers want payments to be executed fast. But if these payments are not secure, it is of no use.”

“Certainly, with all the current attention around security and payments, treasurers choose security first,” they continued.

PowertoPay highlighted SWIFT’s ability to adhere to “the highest industry security standards,” despite its recent lapse.

What Else Do You Need?

In putting its faith in SWIFT’s payments security, PowertoPay’s latest deal could signal that, while security is paramount, a breach may not necessarily be enough to deter the industry and its corporate stakeholders from progressing towards faster payments tools.

On top of security, Nolden and Huisman explained, there are other hurdles the FinTech space must surpass.

“Faster payments will require faster and more rich information streams,” they stated. The ability to handle Big Data, the executives added, enables corporations to more accurately forecast cash flow, manage payments flow with document flows and, ultimately, create “its own financial supply chain.”

“Corporates will need a flexible, secure and multi-device solution to get their internal processes up to speed as well,” they added.

The payments landscape may be waiting for an innovator to emerge with the end-all of payments solutions, a tool that puts an end to the need for banks and meets every corporate payments need in one package.

That’s hardly likely. Instead, Nolden and Huisman said, ensuring that payments are fast, secure and meet such diverse needs for corporates will demand cooperation between presumed rivals.

“The so-called ‘killer app’ can only be built if banks, corporates and industry are working together closely,” they concluded.