Leaders from across the payments industry spoke to a capacity crowd at the October 2023 Chicago Payments Symposium. The day-and-a-half in-person and virtual event, Accelerating Innovation and Inclusion in Payment Networks (Off-site), was hosted by the Federal Reserve Bank of Chicago and included thought-provoking insights, healthy debate and constructive dialogue – and even laughter.

The event’s tone was set by the opening remarks of Austan D. Goolsbee (Off-site), who joined the Chicago Fed in January 2023 as its president and chief executive officer. “Now in its 23rd year, the Symposium is a testament to the Chicago Fed’s longstanding commitment to collaboration with the industry on payments,” he said. Goolsbee cited three examples of the ongoing need for collaboration: achieving instant payments ubiquity in the United States, alleviating cross-border payment pain points and ensuring payment security. Every subsequent Symposium session provided examples of the need for – and benefits of – ongoing cross-industry collaboration.

Highlights from this year’s Symposium include:

  • Keynote: Forces and Factors Shaping Financial Services in 2030. Amy Webb (Off-site) is a “quantitative futurist” whose data-driven approach helps organizations successfully anticipate and navigate likely scenarios – which includes spotting disruptions early enough to mitigate risk and/or create new revenue. Webb sees today as “the most complex operating environment in 20 years” because escalating volatility, uncertainty, complexity and ambiguity (VUCA, Off-site) make it even more difficult for organizational leaders to make astute business decisions. Financial institutions attempting to thrive despite VUCA often also are too slow to react to these trends because they are highly siloed, making it unclear who gets to make decisions – while artificial intelligence (AI) creates pressure to react more quickly but is easy to manipulate, creating headwinds for sound organizational decision-making and communications alike. Webb explained the Symposium audience that it remains feasible to pay attention to early signals in today’s environment, though “it’s still too early” to predict the impact of multiple intersecting AI technologies.

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Photos: Powell Creative Services

  • Global payments. Innovation is improving domestic and cross-border payment experiences – and financial inclusion – in countries around the world that otherwise might rely more heavily on cash. For example, popular services now offered by Ghana Interbank Payment and Settlement Systems Ltd. (Off-site) include the e-zwich smartcard for online payments, as well as instant payments facilitated by smart phones using the Ghana universal quick response (QR) code. Singapore is working to connect its faster payments infrastructure to Thailand and other countries to support easier, faster and more economical options for remittances. Moderator Melissa Tuozzolo of HSBC joined panelists from SWIFT and the Bank for International Settlements in emphasizing the critical nature of industrywide collaboration in initiatives that include the Financial Stability Board’s G20 roadmap (Off-site) to enhance the speed, access and transparency of cross-border payments by 2027 while reducing their cost. Migration to ISO® 20022 standards is an integral part of this work.
  • Instant payments in the U.S. Moderated by Reed Luhtanen of the U.S. Faster Payments Council, this session showcased a variety of perspectives from industry experts. The panelists agreed there’s still much to be done to build market penetration and ensure more ubiquitous, valuable instant payments for all. Speakers said there is room for improvement – e.g., among community banks – even though the Clearing House’s RTP® network has 370+ participating financial institutions and the Federal Reserve’s FedNow® Service has already grown to more than 100 participating organizations since its July launch. Panelists from the Clearing House, the Fed, JPMorgan Chase, Modern Treasury and PTap Advisory see opportunities for new services built on these instant payment rails and applauded industry collaboration in areas such as fraud information sharing.
  • Innovation. While advancing technology and leveraging data are obvious precursors to payments modernization, innovation is being accelerated by growing expectations among businesses, consumers and financial institutions. End users want a wider variety of trusted options that make payments increasingly digital, efficient, faster and lower-cost, said moderator Maria Smith of Walgreens. Fintech companies take varied approaches to doing just that. The panelists cited multiple examples, including Daily Pay (on-demand earned wage access), Plaid (payment apps and more), Volt (open banking and instant payments) and Aliaswire (digital bill payment and other merchant services). These are the types of services that foster financial health and inclusion for individuals and businesses around the globe.
  • Digital currency. Moderator Avivah Litan of Gartner prefaced the session by suggesting that the audience not conflate the value of the technology behind blockchain, digital currencies and tokenized assets (Off-site) with crypto industry scams that might have been prevented by more effective regulations. A majority of respondents Gartner surveyed this year said digital currency can create a fairer and decentralized online ecosystem. The panelists discussed trends in regulated stablecoins, retail central bank digital currencies (CBDCs) and research on wholesale CBDCs in various countries, including Australia (2023 pilot project), Germany (a Deutsche Bundesbank panelist discussed the Eurosystem’s “digital euro” investigation), and other countries (Circle issues USDC and EURC stablecoins, while a Columbia Business School panelist reported on digital currency regional and regulatory trends). The panel agreed that stable, well-resourced and regulated stablecoins have great promise around the world.
  • Security & risk management. Moderator Julie Conroy of Datos kicked off the panel discussion with recent data on skyrocketing fraud trends, including scams, money mules and check fraud. This led to a lively discussion among panelists from the Federal Reserve, Featurespace, RAND Corp. and Reality Defender to dig deeper into these trends and how the industry can better protect itself and its end users from fraud. While prosecution can and does punish some fraudsters, it is difficult to find the bad actors behind the scenes, impossible to find synthetic identities that may be on the rise due to generative artificial intelligence (AI) – and it’s generally not feasible to punish nation-states that use fraud to help fund their economies. The panelists agreed with the obvious point that it’s desirable to lock out bad actors before they can abscond with funds. Appropriate information sharing among industry participants can uncover trends and tactics faster so they can be countered more effectively.

Visit the 2023 Chicago Payments Symposium agenda (Off-site) to learn more about the event.

*The views and opinions expressed in this program do not necessarily reflect the views or positions of the Federal Reserve System.