BAFT 2026 signals a new reality for cross-border payments
One of the most useful reframes from BAFT was that “digital money” and “traditional money” are no longer separate entities. They increasingly share the same constraints: identity, fraud prevention, regulatory complexity and trust. The conversation is also no longer about a novelty, but an operational reality.
For most institutions, this evolution is not going to look like a single overhaul, rather, it will be incremental, with specific legs of a process modernized first, then connected back into existing systems. In practice, that might mean selectively using new approaches in parts of a transaction workflow where they reduce cost or improve time-to-settlement, while still meeting the requirements of the traditional environment.
This is why the BAFT conversation keeps circling back to architecture and controls. The task that stands before the industry is not to prove that faster movement is possible, but rather, that faster movement can be trusted.
Trust controls and payment authentication are not keeping apace
Instant and always-on payments change the fundamentals. Historically, institutions have had more time to reconcile, verify, confirm and intervene if fraud or errors are spotted. In today’s real-time transactions, that window narrows dramatically. The market is being pushed toward a new default: Trust has to be designed and verified as part of the flow, not secured after the fact.
This is where the gap between capability and control shows up most clearly. Risk and compliance processes in many environments are still optimized for slower, more observable movement. As speed increases, it becomes harder to control fraud and manage risk in real time. That tension is no longer primarily technical. It is operational, cultural and organizational.
You can see this in the “layers” being added across the ecosystem. Stronger verification, biometrics and stepped-up authentication are each attempts to rebuild trust in an always-on environment. But layers alone do not solve the systemic issue. They have to be paired with governance, accountability and designs that reduce friction instead of pushing it to the edges of the user experience.
This is also where payment authentication becomes a strategic topic, not just an implementation detail. The question is not “can we authenticate?” rather, it’s “can we authenticate at speed without creating a fragile or frustrating journey?”.
Why ISO 20022 matters, and what it cannot solve
Interoperability surfaced again and again as a major constraint. When systems do not communicate cleanly, the downstream impact is immediate: Weaker risk visibility, inconsistent controls and more opportunities for fraud.
Standards help because they reduce ambiguity. ISO 20022 is a single standardisation approach that is to be used by all financial standards initiatives. It is a good example of a widely adopted protocol that creates shared, reliable expectations across participants. When institutions can rely on a proven messaging standard, they reduce uncertainty about what is being transmitted, how it is interpreted and how processes are executed across boundaries.
At the same time, BAFT discussions were candid about what standards cannot do. Protocols are technical. They help institutions speak the same operational language, but they do not harmonize regulatory requirements across jurisdictions. That is the work that sits above the protocol layer, and it remains a major blocker to the next phase of improvements for cross-border payments.
Security-by-design for modern cross-border payments
A recurring theme from the identity and fraud discussions at BAFT 2026 was that the industry often optimizes for performance and experience first, then backfills security and privacy later. BAFT conversations pushed hard on reversing that model.
No one wants to build slow products, but security must be treated as a first principle of product design, on equal footing with user experience. Identity verification and trust mechanisms need to be integrated at the moment a product is conceived, not bolted on when risk becomes obvious. This mindset shift is especially important as transaction velocity increases and as institutions connect to more third parties, platforms and API-driven integrations.
In other words, the faster the system moves, the more expensive it becomes to retrofit trust.
Next steps following BAFT 2026: ISO 20022, interoperability and identity
BAFT 2026 did not suggest a single breakthrough that will solve speed, cost, transparency and safety in one move. Instead, it offered a practical reality: technical progress is outpacing regulatory alignment and the institutions that succeed will build architectures that can operate safely across that gap.
Three priorities stood out:
- Treat interoperability as a core business decision, and pair standards with clear accountability between participants.
- Build security-by-design into payment products and workflows from day one, including identity and verification as core features.
- Assume regulatory differences will persist, and design operating models that can comply across jurisdictions without freezing innovation.
At GFT, we help financial institutions navigate this shift by combining the expertise by deep financial services with delivery experience across digital money and distributed ledger technology initiatives. We focus on building faster-moving systems that still hold up under real-world trust requirements. Contact GFT to schedule a call about your payments and trade modernization roadmap.
