The Treasury Update Podcast by Strategic Treasurer

Episode 182

2022 Outlook Series: Payment Predictions

Host Craig Jeffery kicks off the 2022 Outlook series with a conversation with Jon Paquette, Senior Financial Solutions Expert at TIS (Treasury Intelligence Solutions), on the outlook of payments. They discuss technology developments that will likely have the biggest impact on treasury in 2022. Listen in as they share what’s on the horizon with payments in the year ahead and beyond.


Craig Jeffery, Strategic Treasurer

Craig - Headshot


Jon Paquette, TIS

Jonathan Paquette - TIS
Episode Transcription - Episode 182: 2022 Outlook Series - Payment Predictions
INTRO  0:05   

Welcome to The Treasury Update Podcast presented by Strategic Treasurer. Your source for interesting treasury news, analysis, and insights in your car at the gym, or wherever you decide to tune in. 

On this episode of the podcast Craig Jeffery kicks off the 2022 outlook series with Jon Paquette senior financial solutions expert at TIS on the outlook of payment predictions. They discuss technology developments that will likely have the biggest impact on Treasury in 202s. Listen in as they share what’s on the horizon with payments in the year ahead and beyond. 


Craig Jeffery  1:05   

Jon, it’s good to talk to you again on The Treasure Update Podcast.  


Jon Paquette  1:09   

Craig, thanks for having me again.  


Craig Jeffery  1:11   

We’re looking at payment predictions today. Our discussion will center on what’s the outlook for payments and what’s going on. So, if we look out through 2022 and perhaps beyond into 2023 and later, I’d love to begin this conversation about your predictions by really hearing about your general thoughts on tech. And what tech topics do you think will likely have the biggest impact and that biggest impact can be taken as something new in Treasury or something that’s continuing and accelerating.  


Jon Paquette  1:43   

You know, the topics that will have the biggest impact in 2022 are those that already have kind of identified use cases for it really have already been prioritized by the treasurer. So, you know, the first of those that I probably call attention to is cash visibility, real time cash visibility, the value of data at an enterprise level for gaining insights to your organization, right. I think these are all the different topics that a lot of companies are looking for. Over the course of the last 12 to 18 months cash visibility just came to focus so much as so much of the day to day became so unpredictable. I still think the treasurer is out there looking to gain as much agility as they possibly can and be able to adapt and react in real time as much as possible, to both be strategic or to react to sort of you know abnormalities that are occurring on a day-to-day basis. So, you know, from that standpoint, obviously we’re talking a lot about API’s, bank APIs, and system integration API’s. As well as, you know, cash flow forecasting tools that are specialized really in the space or even I think, you know, data lakes, in house DI solutions will be big topics in 2022 as well. So, that’s kind of my first topic that I think will be really impactful for next year. The second is fraud mitigation. I mean, fraud mitigation was another one that was a big topic in 2021 as well, but fraud attempts are getting more sophisticated by the day, it seems like the frequencies increasing, fraudsters are getting more automated about the way that they attack organizations, they’re using better data, just in general detection solutions, there will be something that treasures begin to look a lot at in 2022. And really how best to leverage those across their enterprises, what sort of data to give access to those solutions? And then what sort of technologies they want to run on top of those solutions, things like you know, pattern recognition, machine learning, AI based detection capabilities, and things like that as well. Probably within that same category, account validation services, I think will be a big topic in 2022. They already existed on more of a regional basis. So, there are a lot of you know, obviously, these account validation services in the States but SWIFT’s kind of opening the door to that being a more global solution now, so I definitely see treasurers showing a lot of interest in that particular topic. And then the probably the third one that I can think of that I think will have a big impact on 2022 is still ERP migrations to cloud-based platforms, right? S/4 HANA and Oracle Cloud are probably two of the most common ones. They present a unique opportunity, I think, for corporations to do an ERP consolidation and get everybody on a consistent platform that’s hosted, you know, on a cloud and that standpoint, it’s a perfect platform to drive automation and standardization and processes. And I think that organization is going to place a really heavy emphasis on investing in cloud ERPs, and then getting the most out of those investments. And I think, you know, treasury will play a big role in kind of driving what the flow of data looks like to facilitate those automations as well. So, I think you’ll see organizations focusing heavily on how they’re connecting with the banks, the type of data that they’re getting in, the richness of that data. So, you know, you’ll see in combination with Cloud migrations, I think the migrations over to ISO XML formats do to get more data rich format into it, and a big emphasis on increased controls over their processes too through cloud migration. So those are kind of my big three that I think will come into focus for 2022.  


Craig Jeffery  4:50   

Your first one, the cash visibility, bank APIs, system APIs, that seemed to be the first one. When you talked about cash flow forecasts and data lakes, I’m almost thinking in my head that’s a separate one from the other. Have you group those together? Or would you permit us to examine those separately? 


Jon Paquette  5:08   

I can see how they could be separated. But yeah, I do kind of group them together. I think of it as like bank API’s, how you get your data, the frequency you get your data, but ultimately the goal there is to gain real time insights into it, right? So, you need some sort of mechanism to be able to do that. Either Assad’s application for cash flow forecasting, or I think, you know, commonly you’re starting to see this data lake approach pop up too with organizations wanting to run their own BI tools. 


Craig Jeffery  5:33   

That makes sense your taxonomy and how you explain like one’s getting it and one’s storing it. Let’s go to the first one and APIs are certainly a big deal. They’re already a significant, having a significant impact, on corporate treasurys, perhaps 2021 was the year of API. Maybe it was 2021 was the year of bank information and API’s. I always love it when we talk about things “the year of” it’s usually multiple years represents this big shift. But if 2021 was the year of API for information reporting, what’s your prediction for payment APIs over the near term? Is that going to be what you’re saying for 2022? Is that already happened? What’s going on with that type of activity with API usage? 


Jon Paquette  6:23   

I mean, I think you’re definitely right. The most tangible use cases right now for APIs around the reporting piece of it. I think that you’ll see broader adoption of payment APIs in 2022 as, you know, organizations look to leverage more real time payments. But I think this is very, I guess, use case specific, right? So, we’re hearing about you know, organizations that fall in certain categories of certain industries looking to take advantage of real time payments. Some examples of these are maybe like the logistics industry for example, right where you have, you know, sequence of payments needs to settle to release sequential shipments so that you know, a goods get from point A to point B on time, right, and you have this confirmation process that needs to exist along the way. So, the beneficiaries of those payments know that things are settling and getting real time confirmations of that, right. That’s one good use case that we’re hearing about now for real time payments, others or you know, organizations that work in the in the contract staffing world are anybody who taps into the so-called gig economy, right? Just being able to pay individuals more real time give them immediate access to funds, or you know, just industries or organizations specifically that can derive a strategic advantage from giving customers giving their customers immediate access to funds once they make a payment, right? So, but that being said, probably not broad adoption of payment APIs in 2022. I don’t think the use cases exist across all corporates specifically. And if you think about it, you know if you’re not leveraging real time payments, whether you’re pushing payments out through historical file-based methods or API’s, they’re still settling for the traditional rails. So, you’re not settling your payments any faster. You’re just finding a different way to get that information over to the banking partner. And for a lot of corporates, that’s not a super high priority, obviously, even historically, a lot of their processes are built on these traditional methods anyway, so they’re, you know, they’re reluctant to probably up end and move into an API for payments until they can see some real tangible use cases for.  


Craig Jeffery  8:14   

Alright, so since this is a prediction, what year what range of years will be will you designate as the year of API payments?  


Jon Paquette  8:25   

Yeah, so I’d say we’ll see adoption of it real time payments, you know, the early adopters and those with tangible use cases in 2022. For everybody else, that’s probably you know, 2023 we will say will be the one, you know, the bulk of organizations go on API based payment methods. 


Craig Jeffery  8:43   

Alright, let’s make sure we review this prediction at a later point in time. Yeah, excellent. Yeah. And you know, I think your comments about the use of RTP for the gig economy, the gig economy, etc. Now, those are playing out in certain companies already. So that’s a good projection and prediction from what we’re seeing in some sectors there. On the bank API front, what use cases do you think payments and treasury pros will leverage in 2022? You already mentioned real time payments. I was gonna ask you about that, but you already covered that. You and I have had conversations about eBAM, you mentioned verification, validation type services in your intro, but yeah, tell me about your predictions and the rationale for those predictions across some these other use cases with banks. 


Jon Paquette  9:32   

This is a big topic in the community. Now I know both of us were just recently at AFP, and there are a lot of people walking around saying, okay, API’s reporting payments, reporting payments, but is there more that we can do beyond that through this technology? So, I think everybody is really looking for the next use cases beyond this already, even if they don’t necessarily come to fruition in 2022, one way I think you’ll definitely see APIs begin being used in 2022 is for code validation services. So, SWIFT has already kind of committed to launch this service and I believe use APIs through their network to confirm or validate certain beneficiary accounts at banks that are participating. So, you know, and obviously giving corporates access to the tap into that validation service as well. This is a real tangible use case; I think for API’s next year. Beyond that, I know that there are a lot of banks, a lot of fintechs and a lot of corporates in general who are really interested in the capabilities you can get for an eBAM as well. I was actually just part of a focus group with one of our partner banks where we discuss exactly this. And I know that one topic that the community definitely wants to see solved is essentially just being able to execute an API call to pull in your bank records, right. So being able to see the list of bank accounts, signatory services on a particular account through an API call retrieving that information, lots of opinions. About what to actually do with it once you pull it in, right? Do you want to pull it into a BAM database? Do you want to pull into some workflow for confirmation process? Do you want to pull into your own data lake you know, so a lot of different good ideas about exactly how this API would work from a practicality standpoint, but I think that now in general, everybody’s really have the same opinion that there’s value and being able to access records this way? Will it happen in 2022? I don’t think you’ll see it, maybe you know, a year goes by quick and so I’d be surprised if he did see something like this next year, but certainly in the 2023 I think you’ll start to see bank API’s and maybe even extending that into the areas of providing account opening documentation, you know, triggering the account opening process or the signatory change, definitely seems like a logical place for API’s to go in the future.  


Craig Jeffery  11:37   

Interesting. Yeah. When you’re making comments about the eBAM I was thinking about the great promise. In the beginning, we had all these messages and conversations. And what hung it up is that people didn’t have any back end, digital process to either initiate the conversations or receive money or complaining about their banks. What are you going to do if you get a response? And it’s, it’s kind of like, like your points, or hey, there’s value to it, find out what services we have. Are we going to put in a database, a data lake, are we going to do some workflow with it? Those have to be answered first. And then you have to have a home for them to do that. So yeah, I think you’re hedging your bets and saying I don’t think that’s gonna happen in 2023. That seems pretty safe to me, based on the background. Your third point was ERP migration to the cloud. When we use the term cloud, we can mean some different things is this movement to the cloud native offerings, like the whole shift off not just, it’s not just in the data center, but it’s running on cloud native services, highly scalable, micro services, the entire shift that we’re talking about are just a moderate modernization here when we’re talking about this ERP migration? 


Jon Paquette  12:52   

I think we’re seeing most organizations out for the entire shift really to the cloud ecosystem micro services, you know, gaining all the efficiencies from an architecture standpoint, you gain through a cloud hosting model. 


Craig Jeffery  13:05   

Okay, so sounded like you were intimating that they have to change their connections to make them work. What’s your prediction or outlook for that? Is it they’re going to have to move them to more modern methods of connecting, they just have to replace what they’re doing in other in this new schema? What’s going to happen there with different types of connections? 


Jon Paquette  13:27   

Yeah, so I think there’s a lot of people who fall into the category or a lot of corporate bonds in the category of they don’t necessarily view the way they’re getting their information from their bank to be problematic or a shortcoming for what they’re looking to achieve. It’s more what they’re doing with that data internally once they get it right? So, treasury has or accumulates a lot of data but also can benefit from receiving a lot of data from a lot of different areas, accounting, AP, AR, cash applications, FP&A, compliance, you know, kind of the list goes on and on. So, figuring out ways to kind of share information more internally I think is a top priority for companies, both to do things like automate payments processes, automate accounting, cash application processes, received their records real-time from FP&A, update their cash flow forecast, monitor against compliance lists for you know, AML purposes and things like that, right? So, there’s a there’s a lot of companies that are just trying to solve that internal ecosystem type problem more so than leverage bank APIs, for example, right to do real time payments, and their funding that they can do that through the use of cloud ERPs and modern cloud-based SaaS applications connected through API’s. We’re seeing a big push, I think, for companies looking to take advantage of that, I think, and I think that’ll be a really key 2022 trends as well, particularly those who are you know, satisfied with the way their bank connectivity is working and don’t necessarily feel like they should reopen those projects. 


Craig Jeffery  14:46   

So, yeah, if you don’t have touch it again, you might want to move to more current model because, yeah, lots of good reasons for that. Jon, I want to shift to open banking open treasury these concepts the concept that you can connect, you know, from one system to another directly with things like open API’s. What will happen with this concept in 2022? Will open banking and open treasury be more focused on the internal movement of data within, you know, our systems at our company? Or will we see greater growth with broadening the ecosystem between fintechs the expansion of these API libraries and being able to connect to more systems more easily? What’s going to happen? 


Jon Paquette  15:34   

You know, a key trend to probably note that’s occurred this year, I think, and will kind of drive a lot of innovation, I think, in 2022, is that open banking didn’t only open up the door to corporates, it also opened up the door to fintechs and banks to collaborate, right? And you almost had this foundational changing of the competitive landscape as a result and a lot of banks no longer feel that fintechs are their competitors. They feel like they’re their partners. And, you know, during the course of this year, there’s been a lot of partnerships that have been formed as a result. And I think that you’ll continue to see this trend into 2022 as well. Banks, or most banks, at least, seem to be really inclined to begin offering solutions that you know, not only offer better technology, but are also bank agnostic. So, they’re not trapping people in these historical kind of proprietary products anymore. They want to offer their customers, their clients, good solutions that they can really use holistically across all their banking relationships. And this benefits everybody, it benefits, the fintechs the banks, the clients, and really, you know that it’s a great service for the banks to provide, I think, because they’re ideally placed to really advise their clients on you know, how they can improve their processes. They’re really in the end, the day to day they know the transaction volume, they know the challenges of the organization. So, I love…this is one trend that I like quite a bit and I like to see continue into 2022 as well. And then yeah, you’re also seeing I think, you know, better partnerships between different fintechs who can connect to each other more easily now, by the way that they’ve developed their applications, the way that they’ve kind of opened up their APIs between each other. It’s much more common for fintechs to be collaborators these days and providing, I think, end to end solutions when they see a fit for their customers. So just a couple of kind of notes about how the landscape is changing as a result. 


Craig Jeffery  17:17   

Thanks. Thanks for that. Jon, you know, your comment about partnering and partnerships didn’t seem like there’s too many years ago where the term disintermediaries and disintermediation from fintechs was talked about all the time, the great threat, and now it’s the more openness collaboration scale. Very, very good, very good points. Now on to artificial intelligence and machine learning. Is this mostly a myth? A little bit hyperbole here. Will it become much more serious in 2022 and 2023? What use cases will dominate and when will they dominate and in what order? Nice easy questions for you, Jon. 


Jon Paquette  18:01   

AI and machine learning, I think these are two technologies that I really like. I think they have a lot of promise to the industry and have a lot of real applications for technology. I think the problem is that there aren’t a lot of companies that maybe are in position to take full advantage of them. So, AI, machine learning, pattern recognition, they thrive on data. So, they kind of assume that an organization has all their data aggregated together and can run these technologies on top of it to get accurate, you know, usable results. And I think that that’s where the deficiencies probably lie. Because if you’re running AI and machine learning on 30% of your data or whatever, you’re obviously not going to get trend trends that really reflect the true activities of your business, and they’re probably not all that usable for some of the use cases that you would typically try to apply them to. But that being said, if you have solved that data plot problem, I think that there are a lot of practical applications for it to implement order that’s definitely a tough question. But I’d say fraud detection is probably one place where it’s ready for primetime, I think, you know, be in terms of pattern recognition, being able to look historically across an organization’s payment activity as long as you have all that activity, you know, aggregated at one place to be able to run the solution on top of or you know, you have a provider who can help you with that challenge. You can really use that technology to detect abnormalities of your payment patterns and call attention to things that could require a closer look because it really kind of sits outside it’s up sits as an outlier in your normal payment activity. So, that’s one place I think you can w will definitely see the applied well in 2022. You know, another I think is really in both the cash applications and AP automation space. So, I think, you know, in terms of looking at cash receipts, and you know, kind of predicting or at least using machine learning for how they should be applied. This is a technology that’s probably ready for primetime as well. Likewise, in the API automation space, I think you’re already seeing a lot of this in terms of you know, just identifying how, you know, invoices should be coded, for example, through, you know, machine learning. That’s a technology that I think organizations can take advantage of now, and you know, probably the last one is in one of the most promising I think is cash forecasting for AI and machine learning. If the technology really has access to the right data, it can really be an effective tool I think in short term cash flow forecasting, you know, so it first of all needs the transaction history. It needs the data reference points of your customer list, for example, but you know, predicting the payment behavior of your customers based on historical patterns. I think you can get more accurate forecasts, or at the very least you can get better scenario analysis, I think, right? So, you kind of have identified the risks that might cause your forecast to be off target, based on you know, knowing that somebody pays kind of abnormal tastes or whatever it might be. But I think the reason I probably put that one last set the last 18 months have been so abnormal in general from a cash management standpoint, I think for a lot of organizations that I wonder if you run a date AI or machine learning based technology on top of that sort of data if you’re going to get you know, kind of consistent patterns, or if this kind of you know, abnormal period, and then the organization’s transaction history sort of have to work its way out before you can really use this technology to its full advantage but remains to be seen, but one way or another definitely think that this will this will play a big role in 2022 and 2023. 


Craig Jeffery  21:19   

Well, you threw me off there a little bit, Jon. I was expecting the fraud detection answer. I was also expecting cash forecasting. I didn’t think that was gonna be the last you know, the cash app, AP automation, putting that in the middle. So, thanks for mixing it up. You like talking about fraud? That was your first use of machine learning application. But what’s going to go on with fraud, particularly payment fraud, growth, or decline? Will there be a shift in the balance of power between criminals and corporates? If so, what will cause that shift and why do you see that happening? And I’ve got a bunch of specific examples. If you’ll make go through those or go ahead and just begin if you want to talk about that broadly. 


Jon Paquette  22:03   

Yeah, maybe I’ll take that one broadly. That’s another tough question here. But you know, I think that I mean, fraud obviously isn’t going anywhere. I think all the statistics show that fraud is increasing the sophistication of the attacks is increasing, the level of automation, the technologies that are being applied to them are getting more and more sophisticated, right. So, that trend will certainly continue into 2022, I think, you know, even traditional fraud threats like business email compromise, as corporates became more aware that they’re happening, they didn’t necessarily go away. It’s just the fraudsters went got more sophisticated about it. Now you have these deep fake VC attempts and things like that. They’re starting to come onto the market now. So, it seems like they’re not letting up, right? Even on the stuff that’s well known. They’re just trying to get more and more sophisticated about it. But I think one trend that you definitely will see next year is the increase in fraudsters trying to impact the process downstream and the AP and procurement process through things like fake wire instruction change requests and fake invoices. I think that you’ll see, you know, more numerous but smaller value fraud attacks next year, to try to kind of undermine some of the technologies that are being used to try to detect those, right, trying to slip things under the radar is normal activity. Because I think through conversations with you know, corporates who have actually been impacted by those threats, what you find is if you get in the door for one of those attacks, and you have a fraudulent bank accounts sitting on your vendor master, it becomes hard to detect and it’s usually you know, five or six payments go out the door before somebody notices that it could be you know, the actual supplier calling and saying, “Hey, have you paid my invoices, it looks like we have the last five outstanding,” and they say, “Hey, I think we have,” and then finally somebody notices that we change that bank account. We’re not actually paying who we think we … so I think that that’ll be a trend you see in fraud next year. That being said, I think fintechs will shift the balance in favor corporates, will reverse the trend. You know, for the past, I think, you know, three to five years, you’ve seen an increasing trend in the success rate of fraud threats through most surveys that we’ve seen at least. But I think we have all the right tools at our disposal to begin tackling this problem, right. So, you know, you have companies taking innovative approaches and obviously TIS is you know, one of our foundational capabilities. This is something that we really focus a lot of attention on but you know, we view it as being you know, a data driven solution so referencing multiple different data points historical payment activity, sharing information through a community, a community payment activity, right monitoring the vendor records at the point of initiation, account validation services, like we talked about before, there’s a lot of different ways to get data into these tools now. And then there’s really good technologies that you can run on top of that, that data, you know, there’s this plausibility checks, but there’s also now AI pattern recognition, machine learning, right? So, I think that one two punch of data packet technology is gonna allow us to begin to shift that in favor of the corporates, and you’ll start to see that next year. And I know this is already a top-of-mind initiative. You know, obviously adoption plays and plays a big role in whether or not these tools will be successful, but I think through AFP, and through some of the conversations we’ve had before it seems like this is a top-of-mind initiative for a lot of treasures out there to invest in a tool like this to be able to, you know, kind of combat the threats that are out there. 


Craig Jeffery   

Great set of answers on the growth and decline. I hope you’re right. I think you’re hedging for the end of the year end of 22, it would shift I hope that’s the case. Like you said we have we’ve had at least five years of the threat and the losses escalating. So hopefully that shift takes place. Now a shift not so much on payments. And not just on tech, but will economic issues, monetary policy, fiscal policy, broader economic shifts, supply chain, will all of those overshadow the tech developments? And if so, can tech help us in this regard? 


Jon Paquette   

Yeah, you know, there’s certainly a lot out there. I mean, corporates are really concerned about things like inflation, that continued supply chain issues, staffing is still a major concern, a lot of companies kind of attracting and retaining the right talent, the broader impact of just COVID are sort of the unknown about what additional variants might come up and what you know, additional economic problems might come as a result of that. So, there’s certainly a lot to think about there that could potentially overshadow things, but I don’t think so, I think and, you know, really in some ways it fuels the argument for technology investment, because it presents a lot of unpredictability that can be solved through technology, really, that enables businesses to have better visibility and …. right? So, I think that, you know, I talked about cash visibility at the beginning of the podcast here, but you know, the ability to have that real time visibility, be able to, you know, see what’s going on both with your bank activity or internally within your systems, what sort of payments are being initiated, what sort of cash is coming in? In real time, allows you to react quickly, you know, kind of adapt real time to some of the challenges that organizations are seeing on a day-to-day basis. So that’s a, I think, a real good argument for making an investment to help combat some of these, you know, broader issues, I think. And it seems like you know, these days, there were just more business risks than ever, because these broader economic concerns, there’s cash flow risks, there’s fraud, risk, currency fluctuations, there’s just a lot of unpredictability out there. And to think that you know, treasurers can monitor all this stuff without the help of technology, I think is probably a pipe dream. I think if anything, like I mentioned, it probably fuels the, you know, the arguments that most organizations have out there that “Hey, we need something to kind of give us a chance, particularly given the how uncertain things are”. 


Craig Jeffery   

As we wrap up, Jon, any final predictions that I didn’t ask you about? Or that didn’t fit into the buckets? already talked to you about that you want to cover on today’s podcast? 


Jon Paquette   

Maybe a general comment that there’s more options out there than ever it seems like to address technology needs for companies. And there’s also a lot of technology being thrown at the corporate these days to digest to be able to understand the practical use cases behind it, whether it be AI, pattern recognition, machine learning, you know, blockchain, cryptocurrency, whatever it might be. So, I always encourage people to think about the practical use cases. You know, there’s definitely enough solutions out there these days that you can really, once you identify specifically what you’re looking to solve for, whether it’s, you know, automation, visibility, mitigation for risk that you can mitigate internally through controls, whatever it might be, you can really kind of address that in a very specific level these days. You know, don’t get distracted by all the new technology come into the market. Think about the practical use cases. 



You’ve reached the end of another episode of The Treasury Update podcast. Be sure to follow Strategic Treasurer on LinkedIn, just search for Strategic Treasurer. This podcast is provided for informational purposes only, and statements made by Strategic Treasurer LLC on this podcast, are not intended as legal, business, consulting, or tax advice. For more information, visit and bookmark 


Related Resources

#TreasuryFAQ – YouTube Playlist Check out our YouTube playlist covering many frequently asked questions in treasury!  
2022 Outlook Series
2022 Outlook Series

This new series within The Treasury Update Podcast features interviews with treasury experts about their expectations, projections, and insights for the year ahead.