The First Step to Better Payments Happens Before They Move

By Allysun Fleming, Managing Director & Global Head of Products: Liquidity, Trade & Channels, Global Transaction Banking, Scotiabank

The payments industry has made significant progress in improving the speed, transparency, and reliability of moving money. Today, businesses expect payments to reach beneficiaries quickly, arrive with complete information and require little or no manual intervention along the way.

Meeting those expectations, however, depends on more than the payment network itself.

Increasingly, payment outcomes are determined before a transaction is ever sent. The quality of payment instructions, the completeness of payment data and the effectiveness of upfront validation all influence whether a payment moves seamlessly or requires repair, investigation or manual intervention.

At Scotiabank, we're seeing organizations place greater emphasis on getting payments right the first time. As payment volumes increase, business models become more interconnected and financial operations become more automated, improving payment preparation is becoming an important driver of efficiency, resilience and client experience.

When payments fail or require repair, the underlying payment infrastructure is rarely the primary cause. More often, delays stem from incomplete beneficiary information, formatting inconsistencies, inaccurate account details or missing remittance data.

While these issues may seem minor individually, they create operational friction across the payment lifecycle.

For treasury teams, payment exceptions can lead to delayed reconciliation, additional investigations and greater administrative effort. For financial institutions, they increase manual processing and operational costs. For suppliers and customers, they can delay access to funds and create unnecessary uncertainty.

Reducing these exceptions starts with improving the quality of payment information and validating key details upfront, before transactions enter the payment system.

One of the most significant developments shaping payments today is the industry's ability to exchange richer, more structured information.

The transition to ISO 20022 is enabling financial institutions and businesses access to higher-quality payment data that supports greater automation and improves straight-through processing.¹ More complete payment information also makes it easier to validate transactions, simplify reconciliation and resolve issues when they occur.

For organizations managing high payment volumes, these improvements extend well beyond operational efficiency.

Higher-quality data helps reduce exceptions, improves visibility into payment status and enables treasury teams to spend less time resolving issues and more time supporting broader business priorities. In an electronic payments environment, it is ultimately data that triggers the movement of money, making its quality and completeness fundamental to the payment outcome.

As payments become more digital and interconnected, payment data is evolving from an operational requirement into a strategic asset.

Organizations are also rethinking when payment validation occurs. Rather than identifying issues after a payment has entered the network, many institutions are investing in earlier validation through account verification, Confirmation of Payee-type services, standardized payment formats and automated data-quality checks. Industry initiatives such as Confirmation of Payee and account validation services reflect a broader shift toward preventing errors before they occur.²

AI and advanced analytics are beginning to strengthen these capabilities further by helping identify anomalies and inconsistencies that may otherwise go unnoticed. New technology can also allow parties to confirm or validate information across the payment ecosystem without exposing the underlying sensitive data, helping address the privacy and data-sharing challenges that come with stronger upfront validation.

The result is a more consistent payment experience for clients and fewer exceptions throughout the payment lifecycle.

For clients, payment performance is measured by outcomes. Payments that settle on time, arrive with complete remittance information and require no follow-up, create confidence in both the payment process and the financial institution supporting it.

Operational excellence also delivers measurable business value. Reducing exceptions accelerates cash application, improves reconciliation, lowers processing costs and allows treasury teams to focus on higher-value activities rather than resolving payment issues.

As businesses continue to automate accounts payable and receivable processes, reliable payment execution will become an increasingly important part of the overall client experience.

As payment ecosystems continue to evolve, expectations for speed, accuracy and transparency will continue to rise.

Organizations that invest in stronger payment preparation, richer data and smarter validation will be better positioned to reduce operational friction and deliver more consistent payment outcomes.

The next stage of payments modernization will not be defined by speed alone. It will also be defined by certainty: confidence that a payment contains the right information, has been properly validated and can move through the ecosystem with minimal intervention.

Session: Right First-Time: How Proper Payment Preparation Determines Outcomes

Tuesday, September 29 | 10:45 – 11:30 AM | Swift Conference Stage | Level 1, Lincoln Road Room

We’ll discuss how smarter validation, richer payment data and evolving payment standards are helping reduce exceptions, accelerate processing and strengthen both operational efficiency and the client experience.

Visit the Scotiabank team at Sibos to continue the conversation about improving payment performance through better preparation.