The payments industry is approaching a decisive inflection point. In 2026, three forces – the mass adoption of ISO 20022, the rise of alternative clearing and settlement models and the rapid expansion of AI beyond traditional use cases – will converge and start to reshape how payments are processed, managed and monetised.
These shifts won’t just introduce new technologies, they will go further and change the economics and operating models of banks. As a result, payments consolidation will become a strategic imperative, not a technical upgrade, for institutions seeking to stay competitive in an increasingly real-time, data-driven landscape.
The key question is: How do I achieve these strategic goals? Should I leverage partners or not, be it system integrators or technology vendors? Do I buy a new solution or build one in-house? Or leverage third-party cloud offerings?
To be able to have your payments, your way, you need a clear understanding of the drivers most relevant to your organisation. This starts with the why, understanding the forces shaping 2026, and a clear definition of what good looks like for you from a target-state perspective.
The Growth and Limitations of ISO 20022
On November 22, a major milestone was achieved in our industry, when the so-called MT/MX co-existence period ended, making ISO 20022 messages the only standard on the SWIFT network.
And whilst ISO 20022 has often been referred to as a “silver bullet” for unlocking the full potential of payments data, in practice, its value remains broadly unrealised. This is partly due to uneven interpretations and implementations across banks and jurisdictions, but more importantly due to organisations modernising only around the edges. While ISO 20022 adoption provides richer, structured data, banks are only beginning to leverage it strategically for analytics, risk management and value-added services.
Consolidation is key to delivering on the promise of ISO 20022. Unified infrastructures enable banks to streamline operations, reduce costs and build platforms capable of supporting all payment types, across all rails in real-time. Fully realised ISO 20022 implementations create the foundation for better decision making, smarter risk management and a more personalised customer experiences, but only if the underlying data is high quality and consistently applied across organisations. The industry-wide migration to ISO 20022, including major infrastructures like FedWire, stands to help streamline consolidation by standardising data across rails.
The Rise of Alternative Clearing and Settlement Models
The momentum for next-generation payment methods seen in 2025 is set to continue. Now also acknowledged by traditional card players like to Visa, alternative payment methods are rapidly gaining ground worldwide, projected to account for 58% of ecommerce transactions by 2028. Players like Wise, Visa, Mastercard; alongside initiatives such as The Bank of International Settlements’ (BIS) Nexus Project are reshaping cross-border flows. Meanwhile, CBDCs, tokenised deposits, and stablecoins are poised to disrupt Real-Time Gross Settlements (RTGS) and international payments.
Where we were hoping that standardisation like ISO 20022 would simplify our lives in the Payments industry, the proliferation of new approaches raises the risk of fragmentation. In 2026, banks must respond to this disruption by consolidating their payment processing infrastructures and building the capability to support all payments in any context.
The payments value chain should shift away from horizontal flows (domestic, cross-border, high-value, low-value), towards vertical, service-aligned flows spanning order management, execution, and settlement. This flexible, consolidated approach enhances service quality, cuts costs, strengthens resilience, and simplifies compliance. Institutions that fail to act risk being locked into outdated, fragmented models unable to keep pace with those who have consolidated.
Consolidation of all incoming Payment flows on one coherent infrastructure also helps to realise the potential of ‘smart routing’, enabling banks to properly Qualify a Payment: What is it & What do I need to do with it? and route accordingly. This ‘Smart Routing’ concept goes beyond determining the payment type and selecting the most appropriate way to efficiently clear and settle, it also invokes specific value-added services based on granular dynamic processing settings – while gaining valuable data on who sent the payment and who is receiving it.
AI Moves Beyond Fraud Detection
Much of the fintech-AI conversation has focused on fraud detection and sanction screening. However, a recent McKinsey survey of 102 CFOs highlighted that 44% were using generative AI for more than five use cases in 2025, up from just 7% the previous year. This adoption signals a new era where AI has become a valuable tool beyond fraud detection.
AI will remain a defining trend in payments for 2026. While generative AI (genAI) has dominated headlines over the past two years, banking is embracing it as well: 65% of respondents plan to increase genAI spending, compared with only about a quarter two years ago. Yet scaling remains elusive, with nearly two-thirds of organisations reporting they have not begun deploying AI across their enterprise.
It can’t be emphasised enough that the effectiveness of AI depends on the quality and completeness of the data fed into it. AI solutions work best when connected to comprehensive, structured data sources such as data warehouses or data lakes, rather than point solutions. Standardising your ODS for all payment types on ISO 20022 definitely speeds up time to value.
Practical applications when developing AI solutions and using AI include analysing scheme documentation, building rapid UIs in internal platforms, monitoring fraud, reconciling payments and optimising bank operations. The growing use of agentic AI to support both bank customers and internal operations in combination with robust payment orchestration capabilities, will help institutions streamline complex workflows, provide faster customer responses and make better-informed decisions, next to rapidly adding newly developed (or procured) value added services.
Banks that consolidate payment infrastructure while building robust data foundations will be able to fully leverage AI, turning complex datasets into actionable insights and operational efficiencies. Fragmented systems or inconsistent data quality risk limiting AI’s impact.
The Strategic Imperative
As ISO 20022 adoption grows, new payment methods emerge, and AI reshapes the landscape, the key takeaway is clear: banks that consolidate their payment infrastructure will lead the next wave of innovation. Consolidation is no longer optional but a foundation for competitiveness in a market where speed, security, and scalability are non-negotiable. The question for 2026 isn’t whether to consolidate, but how quickly you can make it happen in a manner that fits your Bank: Buy, Build or Both, but always in Control. Your Payments, your way.
