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Bank of America Says About Importance of Transcontinental Transparency for Cross-Border Payments

Isabel Baransky, director of Global transactional services at Bank of America and head of automatic conversion products in transactional currency payments, said that the lack of transparency is the most characteristic feature of the current state of cross-border payments.

Bank of America Says About Importance of Transcontinental Transparency for Cross-Border Payments

The representative of the financial institution noted that a human acting within the framework of the mentioned system as a private person has limited opportunities to make cross-border transactions and initially has little information about these processes and the functional space in which they are implemented.

The situation regarding international payments is not the best, it is gradually improving as a result of the introduction of innovative solutions, which are not yet of a mass nature, but the trend of their integration is characterized by steady expansion dynamics. Such solutions contribute to changing the mechanisms for converting cross-border transactions and automatic identification. For companies that are consumers of services related to international payments, the continuity of the payment process and the absence of any operational problems in this area are important, which often arise against the background of a significant difference between the financial systems of different countries and the principles of their existence.

Isabel Baransky says that in the context of this issue, the most valuable is the ease of use of services. According to her, access to infrastructure is important for many of the various currency corridors, which ensures uniformity of interaction. Also, in this case, an experienced banking partner is important, which will simplify the cross-border process and minimize risks.

A representative of the banking giant notes that companies are in a state of constant competition for the use of their energy. According to her, firms with many years of experience in sending payments in foreign currency are mostly trying to increase the level of efficiency of such operations. Those companies whose history of presence in the currency ecosystem is at the initial stage quickly come to understand that they repeatedly send the same payment within the framework of standard mechanisms.

Isabel Baransky notes that people tend to get used to bad habits to a certain degree, not only in terms of psychological attachment to the repetition of understandable, though not the most effective, action, but also in a practical sense. In the context of projecting this statement onto the financial system and reasoning on the topic of getting rid of the misconceptions of an unjustified habit, she says that companies that want to change their currency payments need to revise invoices or fill out templates for sending recurring payments, which, according to her, involves a large amount of work.

Isabel Baransky stated that there are many potential savings opportunities, the basis of which is the effective management of cross-border payments. Transparency and speed of payment transactions are also important in this case.

In the system of cross-border operations, one of the main problems is the low level of awareness about the currency to be used during transactions. As a result, it forms something like uncertainty on the part of the sender and recipient. This circumstance causes delays in the implementation of operations and financial losses.

Isabel Baransky notes that in the industry under discussion, the obstacle is the large amount of energy needed to send a currency payment. Overcoming this barrier requires considerable effort. The corresponding state of affairs often leads to the fact that some companies refuse foreign currency payments, justifying their decision by the fact that the forces spent exceed the result obtained. The solution to this problem is knowledge. The system of useful recommendations simplifies the process of currency payments and makes it more accessible and profitable for all parties.

The representative of the bank notes that the opportunity to replace the transfer in US dollars with a transfer in a foreign currency at the international level provides an opportunity to save on fees. Also, in this case, payment processing is accelerated.

As part of solving the problem of the lack of an acceptable level of transparency, experienced companies interact with partners who have large amounts of data, analytics, and machine learning at their disposal, which are used to analyze payment transaction schemes and make decisions on how to conduct such operations.

Access to information allows firms to optimize transactions and increase their level of economic efficiency. Isabel Baransky says that analytics helps to make decisions for participants in the payment chain.

At the same time, navigating cross-border payments is associated with difficulties due to regulatory requirements, which in each country, or at least in many countries, have their own characteristic features. In this case, global lenders with extensive knowledge and experience help businesses navigate the regulatory framework. Isabel Baransky says that for maximum efficiency in the current circumstances, it is important to understand regional approaches and have good relations with central banks in these countries. So-called regulatory compliance bottlenecks can be smoothed out through transparency.

Isabel Baransky notes that against the background of increasing transparency, the understanding of the process and the prospects of the solution in terms of its most likely final result will increase. In her opinion, this will lead to greater efficiency of cross-border payments compared to current indicators.

As we have reported earlier, Bank of America CEO Says New Capital Requirements Must Ensure Level Playing Field.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.