The definitive source of global instant payments intelligence

Interview with Cedric Derras, Global Head of Cash Management, Unicredit

InstaPay Editor, Lauren Jones caught up with Cedric Derras, Global Head of Cash Management at Unicredit at Sibos 2019, to talk through instant payments and payments transformation.

From your perspective what is the status of pan-European instant payments at the moment?

The status is very encouraging. Unicredit has implemented, alongside other banks in Europe,  the SCTInst scheme. We are live in Italy and Germany and will be live in Austria  by the end of this year. We plan to roll out this solution in all markets where we are present, across our pan-European network. We have been a front-runner with instant payments since the very beginning and Unicredit initiated the first instant payment in less than 2.5 seconds, between Germany and Italy. What is very exciting today is that this system is becoming the basis for developing further solutions to the benefit of the whole market, both corporate and retail customers. One example that is already underway is Request to Pay, being developed by EBA Clearing, which will leverage the instant payments RT1 platform. But the fact is instant payments is not mandatory, so the question then becomes to what extent the industry and the regulators will further push its use. If we want to make it a complete success, we will need to make sure the whole market is jumping on it.

Unicredit operates across the continent. How is it promoting instant payments usage in countries that are at an earlier stage of the implementation journey?

We are constantly communicating as a group, regardless of the pace of local markets. We want to continue to be a champion at a pan-European level, in the payments industry. Each time we decide to invest, we want to do it across the whole group. This is true for instant payments. We started in markets where there was interest, major activity and where we thought there was strong readiness. But we have constructed a solution where we can quickly roll it out in markets as and when they are ready. Unicredit is a pan-European commercial bank so implementation of the real time paradigm gives us the opportunity to continue to be a winner in the payments space.

Parachuting up a few levels, instant payments is not just a European phenomenon. How close are we to a globally interconnected instant payments network?

We are working on this very actively. Take the example of SWIFT gpi, this is the next level of cross border payments. And we strongly believe at Unicredit that it is. We have been implementing the service since 2017, first in Italy then Germany. Like instant payments, we are also implementing in Austria and then others will follow. SWIFT gpi allows a near-real time payments execution, in any country, in any currency. Recent pilots aim to link gpi infrastructure with domestic instant payments infrastructures e.g. in Europe, Asia and Australia. Unicredit is part of this pilot and has successfully tested this solution. It is not on the market yet, but soon will be and we are very excited about what new opportunities it will bring.

When we first starting speaking about instant payments in earnest, five or so years ago it was seen largely as a differentiator. That is no longer really the case, it is promptly being seen now as more of a utility as most Tier 1 or global banks are implementing it. How can banks differentiate themselves when it comes to instant payments and SWIFT gpi?

They key here is not just in the implementation of the system and executing an instant payment, but it is what you do after that. The point is how you will bring your clients along with you and what services you will build on top of real time payments to bring new products to your customers, one of these being as I mentioned Request to Pay. We believe Request to Pay is the first big change that instant payments has brought about. It will allow the market to enhance the classic Direct Debit proposition, and the classic collection solutions in general. But back to the original question, the differentiator is the client experience.

Regulation is increasingly allowing banks to exploit mandatory initiatives for internal digital transformation. How is Unicredit taking advantage of this?

Unicredit is keen to extract the most value out of regulatory obligations. One obvious example is PSD2. We have been live with our API gateway for third parties since mid-September 2019 and what we decided to do was implement this infrastructure as a pan-European platform across the whole group, to allow smooth implementation of new services globally, regionally or locally. We have built in capacity for this API platform to adapt to the needs of the local market without having to reinvent the core solution.

We have also decided to maximise our investment in complying with PSD2 to become an aggregator. By the end of 2019 through our API gateway and through our channels, customers will have access to information about all their accounts across Europe from any bank active in the SEPA environment.

We also see huge value in linking PSD2 with instant payments and Request to Pay. With increased interoperability of these environments we will be able to construct new services for our clients in Europe. And as we see these solutions converging, we will be able to offer alternatives to card payments both on and off line.

InstaPay will be producing a daily Sibos 2019 show report from the Excel Centre in London all this week, 23-25 October. Check back for further online reports, video interviews in our Insights section, and other material from this year’s show. 

Author: Kate Nelson