Five Key Themes Driving Payments Innovation in 2026 Part 2 – Alan Koenigsberg  [Season 3 | Episode #09]

Intro & Outro 00:00:00 Hello. Welcome to P.I.T. Exchange, a podcast by Currency Research. Join us as we discuss the latest in payments innovation and technology with the industry’s most innovative thought leaders. Today’s payments are changing and moving around the world faster than ever before, and Pit Exchange gives you the knowledge and insights to keep up. Sit back and relax as we join currency research, exchanging ideas with today’s special guest.

Jordan Taylor 00:00:34 Welcome back to the Pit Exchange podcast by Currency Research. My name is Jordan Taylor, and today we’re going to pick up with part two of our interview with Alan Konigsberg, CEO of Konigsberg Insights.

Jordan Taylor 00:00:49 I think that that is a nice little segue into another of your your top ten here. When we’re talking about not just speed and convenience. but many of these, these compliance and, you know, fraud, type type measures, for instance. So you talk about real time payments, real time payments now being being the baseline. They’ve become standardized, but they are not without, certain challenges as well. So within that, that real time space, whether we’re talking domestically or cross-border, and we see we see the cross-border, instant payment connections happening, you know, a lot of bilateral connections.

Jordan Taylor 00:01:40 Certainly there are, you know, multi connection platforms and things of that nature. But, but those, those fraud anti-fraud mechanisms, you know, where, where do you see, where do you see that when we are talking about real time.

Alan Koenigsberg 00:01:58 We used to say real time payments or faster payments. Best fraud. You know, I mean, so there is an acceptable level. There has to be an acceptable level of loss in these markets where there’s going to be be certain there’s going to be bad actors that are trying to gain the system. the real time payment systems are built for real time settlement, you know, 24 hours a day, 365 days a year. not perhaps the way it’s done today, because the consumer may think today, using Zelle, for example, that it’s real time, but real time for who? In real time for what? You know, it’s not real time. And they may not even know that, and they’re still fraught and the slower system itself, and. But I would say that it got to an unacceptable level because I don’t think consumers really understood it, that there were not revocable payments.

Alan Koenigsberg 00:02:57 And so what was intended to be a consumer to consumer transfer got sort of out of hand with some fraudulent activities, especially telemarketers and things calling and taking their information and the consumer thinking by giving them another account based information. But certain pieces of identification that they were saying that they weren’t. So it’s important thing to remember. I think water level will find this line. I think on the cross-border side, I think it’s a little bit more difficult because every market has different rules by which they manage and different data points. So there has to be a level of trust between markets. Canada, the US, Europe, Switzerland, etc.. and standards by which they manage them. Years ago, Jane Hennessy and I, you know, convened a group of bankers across the world to create what was the first cross-border, Sort of ACH network, but it wasn’t an ACH network. It was basically playing to what banks did best foreign exchange. It’s a high margin business, and just enabling them to make payments across the Atlantic was a huge deal back then, and it continues to get momentum.

Alan Koenigsberg 00:04:14 it was the foundation of the Earth port business, which was bought by visa. And I think a lot of people are proud of what that’s done. And you can use your debit network, run and reverse polarity across all these different markets to provide enormous value. And we saw that again when we called, sorry, we saw that again when we were in Africa, that 85% plus of the population and saying you’ve gone all along are quote unquote redefined as unbanked and you sort of move your eyebrows like, oh, that’s too bad they’re not crying over it. They’re actually saying, we skipped the step, guys. We’re actually fully digital. We did fully digital for 20 years. Now we’re taking it to the next level. When in the US, nearly 20% of our inhabitants, our our folks, are unbanked and really unbanked and struggled to make ends meet.

Jordan Taylor 00:05:17 Where does digital identity fit into that? I know that’s that. That is a big one. And certainly when when you know the the conference in Ghana that you mentioned, I know that was a a big theme and it is across across the continent and certainly in many jurisdictions, how how is is digital identity something that is allowing for countries, for instance, to skip these steps? Like you said, and.

Alan Koenigsberg 00:05:45 I’m sure they’re skipping the steps. I think they’re moving from credentials really to something else. And that’s also education, you know, a business consumer or whomever needs to understand what that means. I’ll give you a good example. I parked my car down my ass often, and I booked in advance, and it gave me a good discount, which is great. And the system that I use moved away from passing, moved away from passwords about a year ago. And I to the life of the I was watching this closely going, I understand the business, I write about it. how is this going to work? Actually, it works really well. You know, just like in many other businesses, they want to send you a text to validate who you are. So you’re moving from this sort of like password credential basis to your identity. It could be biometrics. It could be a whole host of different capabilities depending on your relationship with the customer. It’s something that’s easy. It could be replicated. It could be fraudulent.

Alan Koenigsberg 00:06:44 but you’re one step closer to providing safety and security at scale. And I think that’s the important thing to remember. I think that identity provides a differentiator, period.

Jordan Taylor 00:06:56 Yeah.

Alan Koenigsberg 00:06:56 You’re not strategic about it. you’re not going to be relevant to your customer. So providing, these types of identification tools outside of passwords. You know, as a, as the core, really for over the last decades, is something that, does provide an extra layer of security. It provides more trust. It has to be understood to be adopted. So in some cases, customers are offered the opportunity to move from one to the other and don’t take it. when they’re pushed harder to retire these types of credentials. yes. On one side of the spectrum. Less passwords to remember. On the other side, it may be more complicated if it’s not applied at the same rate or the same process or procedure. customers will really struggle with it. and it’s different in every market. So you may have biometrics in Europe. You may have, other types of, not biometrics, but other types of capabilities in, in other markets to identify this customer.

Alan Koenigsberg 00:08:08 So it provides threats and opportunities like anything else does. It also provides a competitive opportunity to be ahead of the pack in terms of providing capabilities via your bank, to corporates and to the customers.

Jordan Taylor 00:08:22 Yeah. So I guess I wanted to, to sort of go into from the the commercial institutions standpoint of the financial institutions. Where, where do you see them sort of taking this and you know, from their perspective, put your banker shoes back on again. if, if you ever had them off, you know what.

Alan Koenigsberg 00:08:49 I. So again, you know, let’s talk about ISIL. We’ll talk about that.

Jordan Taylor 00:08:51 So who doesn’t want to talk about that?

Alan Koenigsberg 00:08:55 I know, it’s so exciting. ISO has been a standard, and now we’re moving a blockchain, the distributed ledger. I think that is the job, really, of the financial institution. And their partners there purvey a better infrastructure. That’s not a competitive advantage. they’ll provide a faster service potentially. They’ll provide a service that could be readily identified and vetted for their customer, but not something that is necessarily, more inventive or more provocatively competitive.

Alan Koenigsberg 00:09:32 But if they don’t do it, they’re going to be left at, you know, sort of left out in the cold with less competitive infrastructures to be able to sell products to their corporates. And you may see corporates move around depending on these capabilities. I think it’s as simple as that. you know, yes, there’s complexity of tech and all the rest of it, which I don’t even think we need to get into today, but. Identity based security and moving of credentials from one to the other is going to happen. The question is when and how. So you’ve got all of this tech and all of these new solutions that are out there, some of which have legacy front ends to them. In other words, you’re still signing over the password. So it’s a bit of a leaky bucket of capabilities that are not as protected as they should be. And if they’re providing real time advantages to them, then you come back to faster payments based fraud. and it’s sort of a key weakness. So I think it’s just a continue to be an acceleration of some of those projects.

Alan Koenigsberg 00:10:44 I suppose the way to get there.

Jordan Taylor 00:10:47 You you mentioned, you know, here and in your piece. How financial institutions need to, you know, continue to to innovate and keep up and all of these things. And we hear a lot of talk about, you know, adapt or die, innovate or die, those sorts of things. Are we are we seeing that yet in play out? Are we seeing financial institutions or other commercial actors who have not kept up or we see them not keeping up, and we wouldn’t be surprised one, two, five years from now to say that so-and-so is no longer in the market.

Alan Koenigsberg 00:11:28 I don’t have all the answers. I don’t have a crystal ball. But I’ll tell you this much. Well, maybe a little bit of fizz are continuing to reinvent themselves around the products and services that they wish to purvey. Think about, I don’t know, 20 years ago, every single fire that was in a market that had checks had their own lock boxes and their own infrastructures around processing them because they thought that was a competitive advantage.

Alan Koenigsberg 00:11:56 We looked up to Canada, who even before that time had basically homogenized, standardized and then outsourced every single major Bank of Canada, outsourced to a third party to the process because they viewed it as infrastructure and they viewed as basically a standard, and they didn’t count revenue based on block box payments. They counted it based on relationships with deposits for exchange and the rest of it. And so they came out the winner. That really in the US, we saw, you know, the sale of these infrastructures to third parties and to private enterprise. And they could manage it at scale until it’s all run down. You think about I remember like, you know, in the 1980s, we talked about the office of the future is paperless. You can see your desk, how much paper is laying on your desk, you know. So some things never go away or won’t go away very quickly, but certain capabilities will, depending on the technology, gets built on your iPhone is a good example. You have all of this tag now and it’s moving the flywheel faster and faster.

Alan Koenigsberg 00:13:01 Why? Because it’s becoming more trusted. And that was one of the things we talked about earlier. Give trusted technology that you have a customer that actually adopts it quickly and uses it, that everybody’s a winner here.

Jordan Taylor 00:13:17 You must have known where I was going because I did, you know, I was I was going to to get back to your article, talking about how these systems are much like, you know, money itself, architectures of trust and systems of, you know, built foundationally on trust and not simply, you know, the technical components that move your money around. So, yeah, you apparently you do have a crystal ball.

Alan Koenigsberg 00:13:49 We do, but you know what I think? Trust is a big deal, you know. And if customers don’t trust or understand more accurately what their provider is doing, the whole thing falls apart, right? Because they just don’t know. This week we rolled out B2B connect as an example. I’ll take you back to the story here. We were very, very careful about talking about the B word because blockchain, because it was so provocative in that year or that two years that we sort of dialed it down.

Alan Koenigsberg 00:14:26 Gosh, if I could have called the stablecoin, then I would have basically coined the term since then. But that’s exactly what it was. Did everyone understand that even other banks understand that how it worked? No. It took a long time, a year or so to train financial institutions, how it worked that it wasn’t competing with safe swift, that it was providing an empowered application for them to leverage worldwide for high value payments. That wasn’t understood before because it didn’t exist. Right. So once that existed in the technology and the constraining, if you will. Was out there, you could really stand up and go. I could send my sales people in and we could sell this thing. And everyone’s a winner at the end of the day.

Jordan Taylor 00:15:10 Do you think that financial institutions and anybody who’s business depends on individuals recognizing what they’re offering and liking what they’re offering. Do you do you get the sense? I mean, maybe I’m saying I get the sense that we have this rush to to stay relevant, to catch up, do or do we lose sight of, of the basics like trust? I mean, you know, we talk about all these very technical things sometimes, you know, distributed ledgers and tokenized assets and whatever else.

Jordan Taylor 00:15:58 But then it just sort of reverts back to these basic concepts like trust and fairness and things like that. And so when we when there’s this scramble, especially with the rate and the speed that things are moving these days, do we sometimes lose sight of that? And then we, you know, the institutions maybe have to backpedal a little bit and refocus.

Alan Koenigsberg 00:16:21 If your customers don’t trust you, you’re going to find out pretty quickly. So likely to leave and go to an institution that actually potentially trains them. It has an awareness level of the kind of service they provide and how they provide them. Why are they checking the things they’re checking? you saw that really with block merchant acceptance, micro merchants, Etc. some providers, a guardian and others got there really quickly and provided a service that was right sized for the kind of businesses that really needed it. so you’re selling it a farmers market. You need like a whole infrastructure around it. You need an iPhone. And now tap to pay and all the rest of it incredibly successful.

Alan Koenigsberg 00:17:10 Solving one big problem with a solution. Not 100. So I think it’s a one at a time kind of thing. but you know, you’re right. I think trust is hard to quantify, right? How do you count? Trust? You count your revenues. It’s already counted. So, Yeah, I think it’s a principle. It needs to be paid attention to.

Jordan Taylor 00:17:35 More so with trust as that foundation from which seemingly all else flows. where do you see institutions or what do you see institutions rather needing to do? in 2026 for the rest of the decade, say, to continue to stay, you know, a pace relevant. I mean, how do they how do they need to view payments and all of these developments?

Alan Koenigsberg 00:18:11 Payments have become a strategic pillar in every business. Banks have viewed papers as strategic for many years. But now in boardrooms all across the world, you’re seeing payments feature as a key pillar or milestone in terms of how the product is actually sold and purveyed to their customer, whether it’s a business or a government or another institution.

Alan Koenigsberg 00:18:35 That’s an important point because the margins by which a company is measured, this is including payments. really, again, accelerate the need for identifying trust as a major factor. you’re going to see much more of a partnership approach to replacing infrastructure and the demand to do it. The idea that, again, back to our themes, that one company or one business or one bank can do this all by themselves. Is it possible it has to be a public private partnership includes central bankers. It includes commercial banks as well as their customers in order to get there. But it takes time. You can’t boil the ocean overnight. Some of my favorite sayings were years old. I’ll spare you it.

Jordan Taylor 00:19:24 I don’t know. We’re certainly trying to do that, it seems.

Alan Koenigsberg 00:19:26 But I just, you know, I love it. but, you know, I look at the end of the day, The point of, you know, consumer or business trust in that institution is critically important. And you have to take these things at pace.

Alan Koenigsberg 00:19:43 You cannot consume every single project and do the light speed without failing on some. You know, the discretionary budgets of banks are often fixed because they’re spending, I don’t know, maybe 60 to 75% of their investments on what? Mostly on compliance. So you’re seeing us dip into that pool to pay for some of these projects.

Jordan Taylor 00:20:11 I know that you you know, you talk to financial institutions all the time around the world, various markets. Do you ever find yourself having to say, I really don’t think that’s a good idea or, or or are you really just sort of fine tuning for them? They’re already on the right track and you’re just sort of trimming around the edges. If that makes any sense.

Alan Koenigsberg 00:20:43 It Totally. You always make sense. True. I think that,

Jordan Taylor 00:20:47 You don’t know me well enough.

Alan Koenigsberg 00:20:48 Problem. Let’s. Let’s depart this for a minute. Let’s let’s consider that we’re in the middle of experiencing the biggest shift of IP and wealth in human history. Between the XS and the Y, Zs and alphas.

Alan Koenigsberg 00:21:07 Okay. Also, consider something else. In business, roughly 15% of what that business does or the procedures by which they run the business are written down. The rest of us have nuance. Have you entertained your clients? Is that written down anywhere? If then statements. If they want a beer, then offer them a you know, come on, you know it’s done through coaching and mentorship and the tutelage under the second seat of the investment banker or commercial banker, watching, observing, practicing and then succeeding at some point. Both. It was an extreme challenge to people going back to the office. Right. And we still don’t have full, you know, subscription to people being in offices. And some younger folks challenged that, saying, well, why do I need to be there? Well, it comes down to relationship equity. Jordan, you and I know each other. We’ve both see by video, but we see each other conferences. if I screwed something up or you screwed something up, we’ve got deposits on hand to pay for that, right? Basically, we have enough of a relationship that we can take a hit.

Alan Koenigsberg 00:22:23 Either you or me. It’s not transactional. It is a real business relationship. I think that during Covid and post Covid, you have some folks at different companies that basically suffered from a transaction oriented Relationships are when something hit or something goes wrong and something always goes wrong. He saw the gears come to a grind in a vault, and that has to be sort of dealt with. But to think that 15% of everything is written down, this is why we have the history of societies being forgotten, because they just go out of the second and third generation and nobody remembers who. Allen and Jordan is 75 years from now. Nor are they sure. But that has to be considered as a key part of this. I don’t recall somebody that gave me the keys to the car, you know, 25 plus years ago said, now, you know, here’s the 25 things you need to know. It was sort of like a I knew it organically, you know, I understood the business. I had been around it.

Alan Koenigsberg 00:23:29 And then you get appointed, whatever you were the head of product or the head of this or head of that, or in the business, and you manage profit and loss and you hopefully manage your customers well and grow the business. it has to be part of the conversation. And that’s the like some of the conversation having with banks. How do you talk to these generations in a way that’s meaningful? How do you document it, and how do you get to the point where, you’re comfortable that history won’t be repeated? We haven’t gotten there yet because we’ve been creating history now for decades on the events that occurred going, you know, for the benefit of hindsight. how did that happen? Well, we know whether it’s the desire for revenue through public companies demanding certain activities to happen or go replace their executives or what have you. That is something that has to be managed and dealt with. I wish I had a clearer answer for you. I mean, I wish I could give you a step table that says, you know, if this happens, then this is going to be required.

Alan Koenigsberg 00:24:37 It’s not. And there we look at the fortune 50 and 1950. Think about the companies that you probably know. Off the top of your head, like General Motors and others that are on it. And then think about it this year. The Forbes list, probably what 1 or 2 companies have left. Now it’s going by year, you know. So which companies are going to continue to remain as thought leaders or execution leaders in the market?

Jordan Taylor 00:25:03 Well, Alan, I don’t know about.

Jordan Taylor 00:25:04 You, but I think that makes for a nice little place for us to conclude our conversation here today. As always, it’s been a joy. But before we go, I do want to give you the opportunity to offer up any final thoughts? Any last words? What we should be thinking about looking for as we move ahead in the world of payments in 2026 and beyond.

Alan Koenigsberg 00:25:28 Thanks, Jordan, and it’s.

Alan Koenigsberg 00:25:29 Been a pleasure spending time with you several seconds. You know, I think I could. Bottom line, all of this by saying that In summary, 124 trillion is moving.

Alan Koenigsberg 00:25:42 But the real story, as we really discussed, is in about money. It’s about the transfer of knowledge and judgment and relationships just to begin with. And at the same time, AI is reshaping decision making and consumer access and how businesses are structured and a whole other panoply of of things that are disrupting and shaking up the industry. So we’re scaling all of this stuff faster than our ability to understand it. And I think that’s where all this risk lies a home. And at the end of the day, access is key. And when we build these infrastructures, it determines who participates in them. And all of that determines the prosperity of the people that are using it. So I think we need to keep our eye on all of that as we move forward.

Jordan Taylor 00:26:33 Thank you very much for that, Allen. And of course, thank you for taking the time to be our guest here on the Pit exchange. As always, we have enjoyed getting to chat with you a bit and look forward to seeing you again, hopefully soon.

Alan Koenigsberg 00:26:47 Jordan. The pleasure was indeed all mine. Thanks for including me. I will see you soon, if not soon. I’ll see you in Istanbul in August. Thank you.

Jordan Taylor 00:26:59 That concludes this episode of The Pit Exchange. Once again, my name is Jordan Taylor. Thank you all for listening. Please remember to like, subscribe, download wherever you get your podcasts so you never miss any new episodes. We’ve got lots of great ones in the pipeline, so look for those. Until next time, thanks a lot.

Intro & Outro 00:51:46 Thank you for listening to The P.I.T. Exchange, a podcast by Currency Research. Check out our upcoming events and publications at Currency Research. And join us for our next episode to hear what’s trending in payments, innovation and technology.