North American banks are having difficulties keeping up with the evolutionary pace in payments.
Technological innovation is transforming commercial payments across North America, greatly affecting major financial institutions in the US and Canada. Celent, a fintech research and advisory firm and part of data analytics consultancy GlobalData, shared a report on this topic at Sibos on Tuesday, with some unexpected conclusions.
The survey, conducted over the summer with a majority of the top 20 banks in the US and Canada, revealed that no single bank excels in all areas of payments. Moreover, the definition of “best” varies depending on the client and the context. What emerged as more important than trying to do “everything” in payments was focusing on what matters most to clients.
The pace and breadth of change in the payments space is so intense that some banks described themselves as “drowning in change.” However, this environment also presents significant opportunities. As the authors of the report emphasize, what matters most is not a bank’s size, but its attitude. Smaller banks, in particular, often outperform their larger counterparts simply because they are more willing to embrace change.
Each bank surveyed reported taking a unique approach to payments, with differentiation becoming a key competitive factor. Many respondents noted that only the largest banks had the resources—both human and financial—to innovate at scale. Yet, even deep pockets don’t guarantee success.
Celent’s analysts argue that Banks must differentiate their payment offerings or risk falling irreversibly behind. The desire for change outweighs available budgets—innovation stems more from mindset than money. A unified, client-centered goal must drive all decisions in the payments domain.
In practice, this has led some institutions to shift from building products first and marketing them later, to starting with client and industry research and then designing solutions to meet those needs. This represents a significant shift in product management, placing the client at the center of the innovation process. The goal is not only to become a service provider, but a partner and advisor—delivering what’s best for the client, not just for the bank.
Looking ahead, while significant changes are expected in areas such as CBDCs, stablecoins, ACH systems, and payment infrastructure, the survey identified fraud and risk management as the top priority for 43% of the banks surveyed. This is followed by 29% that are focused on improving operations and transforming processing infrastructure. Additionally, about 50% of banks anticipate a full system replacement in areas such as payment hubs, cross-border payments, payment operations, and financial crime prevention.
