Episode 39: Accelerating economic growth

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Transcript of the recording

Elizabeth (Liz) Dempsey: 
Hi and welcome to the PayPod, the podcast from Payments Canada that explores the trends and topics influencing payments in Canada and around the world.

I'm Liz Dempsey, Manager of Event Strategy and Engagement at Payments Canada and your host for this episode.

In anticipation of The SUMMIT, Payments Canada's annual event coming to Toronto this May, we're exploring this year's theme: accelerating economic growth.

To do that, we brought together leading experts for a panel on how payments are essential to a thriving economy, enabling new services that deliver value to both businesses and consumers.

More specifically, our experts discuss how the latest payment trends are fueling prosperity, growth and global competitiveness. The discussion is moderated by Janet Lalonde, Payments Canada's Vice President of Business Program Delivery and features Abraham Tachjian, Chief Regulatory Affairs Officer at Brim Financial, Rebecca Tasona, Chief Operating Officer of Canadian Personal and Business Banking at BMO and Kathleen Woodard, Head of Banking and Industry Advisory for the Americas at Microsoft.

This panel originally aired live on February 3, 2026.

Here's Janet to kick things off. Please enjoy the conversation.

Janet Lalonde: 
So, I'm going to hand it over to each of our panelists for a moment just to give a brief introduction and then we will dive right into the questions.

So, Abraham, why don't we start with you?

Abraham Tachjian: 
Thank you, Janet. First of all, it is a privilege and an honour to be here today. My name is Abraham Tachjian. I lead regulatory affairs at Brim Financial. We are a full stack modern technology company that enables our partners such as banks, fintechs and credit unions to roll out cards and payment products.

Janet Lalonde:
Thanks, Abraham. Rebecca?

Rebecca Tascona:
Good afternoon, everyone. Great to be here. My name is Rebecca Tasona. I previously led North American payments and products for BMO Financial Group, Treasury Payment Solutions. But more recently, I'm the Chief Operating Officer for Personal and Business Bank. BMO Financial Group is a North American financial organization and we help clients of all sizes, retail, business banking, commercial, capital markets clients, wealth management clients. Great to be here.

Janet Lalonde:
Thank you. And Kathleen.

Kathleen Woodard:
Thanks Janet. I'm Kathleen Woodard. I lead the Industry Advisory Team focused on the Americas, focused on banking for Microsoft. I'm pretty sure everybody knows who Microsoft is, so I'm not going to introduce Microsoft but would say I'm based here in Canada. I've got industry advisers who help shape innovation for new workloads whether it's AI or other innovation across the US, Canada and Latin America and I'm an ex-banker of 26 years. I'm so happy to be here.

Janet Lalonde:
Thank you. So let's dive right in — 2025 was another big year in payments. The stage is set for a new era of innovative payment solutions that combine data, speed and safety to help Canadians and their businesses thrive. So, I'm going to turn to the panel and what I want to ask is what these developments mean for your organization, the payment ecosystem and more broadly to businesses and to consumers.

So, I'm going to start with Abraham.

Abraham Tachjian:
Thanks, Janet. I think it'd be helpful to kind of contextualize our conversation with a little quick overview of some of the major developments that really impacted the payment ecosystem over the last year in Canada. Now, given that you're our host, I would be remiss if I wouldn't mention the expanded membership into Payments Canada with the recent amendments to the by-laws and last week's announcement of Brim Financial, shameless plug, including four of our other peers joining Payments Canada as new members. And that is a significant milestone in terms of policy development and membership in Canada's preeminent payment infrastructure. I think that the new cohort of members brings new voices from a demographic that they serve and just allows for a greater level playing field in competition among the industry.

Now in addition to that the membership opens the door to potentially having access to the RTR which is I think another major development in the payment ecosystem over the last year given the significant progress Payments Canada has made towards a go-live date. So I think when you combine membership into Payments Canada and the eligibility to join the RTR, I think you're opening the door to a new cohort, a new group of new payment service providers that can offer Canadians a variety of new products and services.

I'd add to those one of the preconditions to joining Payments Canada as well as some other organizations and that being the Retail Payment Activities Act otherwise known as the RPAA. It essentially oversees payment service providers, fintechs, however you want to call them generally any organization that has anything to do with the movement of money.

Now this is significant because for many years those payment service providers kind of fell into a bit of a regulatory gray zone and now under the oversight of the Bank of Canada they're properly regulated with operational risk and incident management requirements as well as fund safeguarding requirements.

But separate to those policy and compliance requirements, I think the major takeaway from the RPAA is the fact that it opens doors to new partnerships and new organizations. Take the Payments Canada membership for instance. Organizations that are applying have to be registered under the RPAA. Similarly, organizations that want to have access to Interac e-Transfer, the RPAA is a precondition. So in addition to those simple compliance requirements which aren't simple at all, I shouldn't use that term.

I think the net benefit coming out of that including for organizations such as Brim and other fintechs is that it sets a precursor of one of the conditions if you like for accessing greater infrastructure.

I think the other major point from a policy development perspective is from the open banking side — something I have a personal bias in given my past role as the open banking lead with the department of finance. And so in November with the budget announcement, I think we had two major considerations that really impacted the payment ecosystem. The first was with respect to the governance of the system moving from the FCAC over to the Bank of Canada.

But in parallel to that, I think what was really striking was the government's announcement to expand the scope of the system beyond just read access but to include Write access and that's just, in general parlance the ability for an organization with their consumer's permission to go into their account, move money — essentially do things. So the logical example for that is payment initiation. So the government set a target of 2027 and when you take a step back and and you overlay right access along with the timeline of the RTR suddenly we are looking at potentially the convergence of two major projects that we've been working on in the Canadian financial policy landscape happening at relatively around the same time. So that's considerable for a lot of financial organizations.

And finally, I think if I took another step back, I think what's really significant is the role the Bank of Canada plays now in overseeing fintechs and perhaps a quasi-competition mandate.

You know, generally the Bank responsibilities primarily have been to contain inflation at a certain level but suddenly it's overseeing the RPAA it's overseeing open banking and it's overseeing stablecoins. So a significant expansion of its mandate beyond just inflation but also to regulate really core payment services as well as fintechs.

Janet Lalonde:
Thanks Abrahamand also let me offer my congratulations on Brim’s new Payments Canada membership status. We are very excited to start working more closely with you and your colleagues at Brim. So congratulations.

Abraham Tachjian:
Thank you.

Janet Lalonde:
I'll move to Rebecca next. So Rebecca I guess you know just looking at you know payment solutions that combine data speed safety what do these types of developments mean for you and for your organization?

Rebecca Tascona:
Well I would echo what Abraham said and certainly the Budget provided a lot more clarity on some of the parameters which is really helpful to our clients and to the players in the space. But when I think about 2025, I mean there were so many things that continue to evolve in the payment space. I mean every week there was a new headline and many multi-year projects that came to fruition. And taking just even a North American lens like the increase in APIs, embedded banking, the news with FedNow, ISO, obviously a lot of news headlines around stablecoins, tokenized deposits and at the end of it all like also some very big announcements around some nextgen rails that have you know been modernized. So there wasn't really a single area that did not have something that involved moving it forward.

What that means for our customers really is like they need a lot of support understanding how this knits together and what it means for their business model quite frankly. When we talk to our clients, it's really about, you know, the new rails are great, but how does it integrate with everything else that I'm doing, their business model?

So, we spend a lot of time translating what the capability is because not everyone is a payment expert like the folks that are on the phone or joining this call. Lots of our clients need help understanding how to bring this to life and what's the benefit to them and how can their business models evolve, whether it means access to liquidity, faster, better fraud monitoring, things like that. And so we spent a lot of time translating. But it certainly is a very exciting time for the industry and for our clients as well.

When you think about the benefits at the end of the day, the business clients that we have, it's all about how do they automate, how do they integrate, how do they get access to their payments, their receivables at a faster pace, real-time cash flow. Like it just really helps with the transparency, the visibility into their own businesses and allows them to take their cash and put it to work at a faster pace.

For the consumer, it really is about, access again to transparency and their own data, but it's also about making sure that they have better real-time monitoring, fraud monitoring, protecting them,and allowing them to unlock, you know, use cases that they weren't privy to before. As much as all these announcements are exciting, I think I'd be remiss if I didn't say that we have to have as many great announcements in the fraud and protecting our institutions space as well because real time is different. We know from the behavior of other payment rails and the client education and the consumer education that's required but also what organizations such as Brim such as BMO such as Microsoft need to do to protect the ecosystem and the client is accelerating at even greater speeds.

Janet Lalonde:
Thanks, Rebecca. And I'll round out this question with some thoughts from yourself, Kathleen.

Kathleen Woodard:
Maybe just to pull together these threads because I think Abraham and Rebecca did an awesome job kind of outlining the massive degree of change that I think the whole industry is experiencing. And you know, from a Microsoft lens, I would say there's kind of two two things that we think about all the time. One is how do we help to support and accelerate innovation? But also how do we be mindful of the risks that are going to be inherent with the pace of change in the technology with everything that Rebecca just outlined. With the RTR comes great advantages but also increased risk just in terms of the acceleration of fraud that we're seeing across the industry with new tools even beyond just the RTR obviously. You know, AI and agentic AI and we're going to talk about that a little bit later, has really changed the game there.

I'm going to do a bit of a shameless plug because I do think Canada should feel pretty great about the things that Abraham outlined because when you think about these things converging, you've got you know, RTR landing, you've got, open banking with the ability to really change the landscape for consumers. That's really an indication that Canada is really trying to step up the game around competition and around really being consumer focused. And as a result, we just announced a few weeks ago a $19 billion investment into Canada. And so with that, we are investing in new data centers. We are investing in new sovereign Canada landing zones and making sure that we are helping to support the infrastructure that's going to be required for all of the ecosystem to build on top of this. And so that's a pretty big announcement if you put that into context. I think the equivalent for the Canadian government was just under $3 billion. Microsoft's investing $19 billion. And this is very targeted. This isn't an idea, but this has been done in partnership with the government.

So that's kind of one big impact that I would say as we think about all these changes converging, we need to make sure that we have the infrastructure in place to support that. But I also think you know And I think it's really important Rebecca raised that before. I think we have to really touch on the fact that these changes as well as the geopolitical landscape, the acceleration of AI models, all of these new paradigms, I'm going to call it, are raising new questions around trust, around liability and around security. And I think right now we are advantaged in in Canada that centralized fraud services are built natively into you know the Real-Time Rail platform through through Payments Canada and that is I think a really strong message and and you know a strong capability that we want to leverage but I think there's also lots of unanswered questions and so I think you know for the for the entire ecosystem I think it's going to require a degree of collaboration that probably we haven't seen before. I think the fact that we've going to have new fintech entrants, hopefully creating more competition, as well as more use cases that are going to be very focused on delivering value in a very fast way. I think that's good for the industry.

So, I'm pretty excited about the future, but you know, as I think we're all acknowledging, this is not simple. It is quite complex and so it's going to really require, you know, multiple levels of partnership and thoughtfulness in order to deliver real value from the platform.

Janet Lalonde:
Thank you, Kathleen. So, a number of you have already referenced the Real-Time Rail, the RTR, and it's hard to talk about payment innovation obviously without talking about real-time payments. The RTR is a new national payment rail that's under development right now at Payments Canada. I can't imagine there's there's many folks involved in this in the session today that don't know something about it already.

The RTR will allow funds to move from payor to pay in seconds, 24 hours a day, 7 days a week, 365 days a year with no scheduled downtime. It's going to provide immediate transaction settlement between financial institutions and immediate confirmation and irrevocability from an end user perspective once payments are confirmed. The RTA's is going to provide foundational infrastructure that supports richer data, ISO 20022 messaging and of course as Abraham did mention participation by a broader set of regulated entities which is all very exciting.

So,I'm interested to understand from the panelists a little bit more about how you see the role of real-time payments reshaping the broader payment ecosystem and what innovative opportunities do you think payment leaders should prioritize to drive value in the space of real-time payments. And I'm going to start this time with Rebecca.

Rebecca Tascona:
Well, real-time payments are no longer a feature like they are table stakes now and they are reshaping every part of the payment ecosystem and they're really I think igniting imagination around how to leverage this capability. Particularly for us, many of our clients are North American or global in nature and they've seen the benefits of real-time payments in other jurisdictions. They're very excited about this capability coming to Canada. And you know, I think once it's available they will bring the use cases of how they've experienced it or used it in other jurisdictions. It's very exciting from that perspective.

I think the thing that is really important for us all to remember is no single player owns real-time payment innovation. Look at the consortium of very smart people and companies that have been required to bring this to life and congratulations again to Payments Canada because it's almost here and it's going to be amazing when it is but it really requires a lot of innovative thinking across the entire ecosystem and we have to for our Canadian ecosystem to continue to be competitive and move with pace. And that's a critical piece: move with pace because the world is evolving at such rapid speed it's going to require even more collaboration than we've been doing. And we have to get very comfortable with that and that we're all going to bring different strengths to the table. And we're going to talk about partnerships later, but really like the ability to leverage the capabilities that we all bring and partner in different ways is going to be table stakes for the next 50 years of the payment ecosystem in Canada.

But when you think about what are the innovative opportunities, I would just bring it back to our clients. Once you explain what real-time payments can do for them, it would be co-create with them. Take a look at their ecosystem of what they're doing, how they do their business and use cases are going to fall out of that. And that's how we're going to provide value. We're going to provide value to help Canadian companies reshape their business models and obviously protect the end consumer at the same time. And that's where the value is going to be created.

Janet Lalonde:
Thanks. Thanks, Rebecca. I couldn't agree with you more on your comment that real-time payments are table stakes you know and what seems cutting edge in the moment sometimes you know in a very short amount of time becomes the new normal, right? So maybe I'll go to Abraham next and see if you have a perspective on how you see the role of real-time payments reshaping the ecosystem.

Abraham Tachjian:
Thanks Janet. I wouldn't focus specifically on use cases. I think Rebecca did a pretty good job of giving us an overview of what the capabilities can deliver. And you know, realistically, there's plenty of precedent in other jurisdictions that can show what the potential of real-time payment rails can deliver to consumers, to businesses. I'd like to take a bit of a different perspective because, you know, Canadians, they don't necessarily care about, you know, specific infrastructure. What they care about are the capabilities, the convenience and the features that payments offer in their lives, be it you know gig economy workers SMBs paying their suppliers or anywhere else where the movement of money is important. So, I think the focus from my perspective is to enable those capabilities, to enable those features. And I think inherently you can do that by creating greater competition, right? Creating an opportunity for more providers to actually leverage this infrastructure.

I don't like to get bogged down on justifying the objective of an infrastructure with use cases because the challenge with that is that use cases evolve. I think what we're doing a pretty good job of is laying the infrastructure to be able to build on to be able to innovate and evolve and I think Payments Canada has done a very good job in getting the RTR near the finish line.

I think that infrastructure is going to help us really navigate the payment ecosystem. And so the perspective I like to take is is more from the context of competition in the sense that the RTR coupled with Payments Canada membership, as well as some of the other elements that I described in my opening monologue, I I think it creates a really good opportunity for the payment ecosystem in Canada between incumbents, credit unions and newcomers with recent admission to Payments Canada to really leverage this great infrastructure to deliver greater capabilities to Canadians, perhaps importing some of the good features we're seeing in other jurisdictions but layering on a uniquely Canadian perspective. But importantly, contributing to our competition on a global scale, right? We often talk about how far behind we were on open banking, you know we're almost there. Similarly, we're almost at the finish line with the RTR; so, I think the contribution from the payment ecosystem perspective is, on the one hand increasing competition within the market, providing consumers with greater choice greater capabilities and better prices, which is inherent to competition, and importantly making sure that our international competitiveness and our position as an international leader in the financial ecosystem remains.

Janet Lalonde:
Thank you. And then we'll let Kathleen weigh in on this one, too.

Kathleen Woodard:
I would just it brief because I agree with everything that has been said, but I would also take a lens that you know that you're right Canadians don't really care about the infrastructure that's going to be seamless. But if the real opportunity from the rails is beyond kind of fast and seamless, and it is about the new use cases that you know we haven't really discovered right now, and if you think about just all of the data-rich ISO capabilities and possibilities that are going to come, I don't think we can even fully you know predict what is going to be started up and what's going to be the innovation that's that's coming from that. But foundational before even focusing on the consumers I think it’s really about trust and I think it's about just enabling that the fraud and the security like we all have to make this this very successful and that is the foundation before we think about any sort of going fast and going you know into a lots of innovation I think making sure that all participants in the ecosystem are really investing in the right kind of fraud services, security services to make sure that this is going to be as robust and as secure as possible I think is job one quite frankly for for everybody. And then I think then you build on top of that.

And so all of the possibilities around automating reconciliation, personalizing services, getting insights for merchants that otherwise were previously not possible — all of that is going to be goodness. It's all going to be, I think, enabled. But we've been talking about this for a while for a while. It's not just a new rail. This is actually a real new foundation. We're going to all be building on top of this over,, hopefully, you know, the next decade to come. And so, I think getting the how right really matters right now at this moment.

Janet Lalonde:
Thank you. So, I think we're going to switch gears a little bit and talk about another trend driving speed and security and payments and that is of course the use of artificial intelligence.

AI is being leveraged to create more personalized transaction experiences. So I'm interested to hear from each of the panelists on how you see applied AI redefining the future of payments. And I'm going to start this time with Kathleen.

Kathleen Woodard:
Thanks Janet. Yeah. So, maybe if I just back up a little bit just in terms of what we're seeing across the globe and particularly in America. We have introduced this concept of the frontier firm. And frontier firm meaning, that organizations are very focused on their their business strategy and the outcomes they're trying to drive but recognizing the fundamental shift that has happened with the technology is such that organizations have to put AI at the center as an enabler, not as the outcome, but as the enabler in order to to drive the kind of and and achieve the outcomes at the pace that is going to be happening in the future.

And so we talk about three levels of the frontier firm. The first is we believe every employee and every enterprise and every consumer in the future, maybe not today but in the future, is going to have an AI assistant. If you think about it, ChatGPT right now has 700 million active users weekly.

And so this concept that everybody is going to have their own kind of personal assistant that is supporting them, we are starting to see quite frankly, in payment operations in fraud and AML, this is already having an impact. Back office analysts using a co-pilot or an AI assistant to summarize exceptions or generate reconciliation reports — many of these things that took hours are now being done in minutes.

And at Microsoft, we're customer zero. So, our treasury team piloted an AI assistant for reconciliations. We saw a 22 per cent reduction in handling time for accounts. This is happening in large and small institutions as people are kind of working on that phase one.

The second level is where you really start to think about agentic AI. And agentic AI is AI that is no longer just providing information but is also now taking action. And in this phase we talk about humans working with digital colleagues. And it is our belief and we're already starting to see it across the industry is that organizations are now starting to think about human labour and digital labour and how they are going to be bringing on digital colleagues to do some of the tasks that previously they could not operate at scale. So, fraud operations, sifting through all the millions of transactions, surfacing anomalies, drafting the SARS that everybody has to do. In this situation, digital agents or agentic AI is not replacing humans, but they're doing a lot of the heavy lifting. And so, they're acting as an AI colleague. And there's lots of implications in terms of how you think about that and how you design your organization.

I would just say in terms of the landscape right now, most organizations are already in phase one. They're thinking about how to enable AI across the organization. They are starting to experiment with phase two and starting to think about how we're seeing large enterprises in Canada and across the globe think about how they are going to manage a multitude of agents that are being built by themselves as well as by some of the providers.

Phase three though is true autonomous agentic AI. And that is really about starting to think about how you build autonomous business processes. And so, where humans set high level direction and constraints but AI agents are executing across the entire workflow. One of the biggest opportunities here and I know you know it's become a thing that everybody's talking about is agentic commerce. So, let's say you want to buy a bike for your child. You're super busy. You're busy with work. You don't really care what kind of bike it is. You just want to buy the best one for the value. And so, you might go to ChatGPT or Co-Pilot and ask for advice. But you're still right now kind of clicking through merchant sites to pay. Very soon there is going to be the possibility, and again there's lots of questions from a regulatory perspective, but the possibility for you to say Co-pilot, find me the best bike for my child under $500 and go ahead and buy it for me.

We will have these autonomous agents with the capabilities to be able to handle everything. So this is searching, comparing, checking out, using the saved payment credentials without handing off to a website. And so there's been lots of experiments going on across the industry. Microsoft has experimented. We've seen positive results seeing, people are much more likely to buy if they have an assistant helping them. The big payment networks have obviously introduced frameworks to help with agent initiated payments. Visa introduced trusted agent protocol. We've got Mastercard with their agent pay.

But fundamentally all of this means really big questions that we have to think about as an industry. So trust and consent are paramount. How do I know my AI agent won't overspend or do the wrong thing. How's a merchant verify that an agent is genuinely authorized by the customer? How do you really make sure that you've got the legal frameworks in place in terms of understanding liability?

So I think you know security is a big one. There's going to be lots of opportunities in terms of hackers. Encryption and tokenization are going to be really really necessary to be airtight.

And then finally with all of this there's also the explainability. So what we've seen as we've started to introduce AI and especially in financial services I think that relationship with regulators and getting the teams comfortable around, “do we have the degree of observability and explainability in order to know why AI picked one product or another?” is a really big one.

And last thing that I just want to say on this. This is going to fundamentally reshape the industry. And it's really important that I think and I'm seeing it obviously everybody is thinking about it right now and experimenting with it right now because this isn't science fiction. This is something that I think is going to unfold over the next 12 to 24 months.

If you think about it, this is really about making sure that the enterprises that are not disintermediated that you know when you're you're thinking about kind of that that shopping experience, are you going to be behind the AI assistant is that all that the consumer is really going to see and how do you make sure that you maintain relevance.

So there are a lot of questions on this topic. This is still very nascent and something that we are actively working with all the participants and thinking about. But the big thing I would just say here is this is not one of those moments when you can go slow. You can go slow just in terms of how you implement it but you have to be thinking about it. You have to be experimenting and you have to be getting the organization comfortable with it. Because I do think this is one of those things where if you have a ChatGPT with 700 million users and you have a large enterprise that is you know some of the the big players that already start thinking about how do they make sure that their AI assistant gets surfaced up with some of these queries, are you as an enterprise as an organization going to going to be completely irrelevant? I don't mean to be a doomsayer but I think there's big questions with big implications in terms of how the industry is going to transform.

Janet Lalonde:
Thanks, Kathleen. That's incredibly fascinating and really thought provoking as well. I’m wondering if Rebecca, did you want to add anything?

Rebecca Tascona:
I think we all just need to pause and think about the world that she's just painted. No, I'm just kidding. I mean, she's right. The future is here. I don't even think we can conceptualize what the world's going to look like in five years because it's moving so quickly. I asked my Co-pilot how I should respond. No, I'm just kidding. But you know, all I'll say is I agree with the comments around that you have to start experimenting. And it's one thing to deploy it in your company, but then you have to actually make sure people are thinking about how to use it, and it really needs to be leader-led is what I've discovered.

You have to encourage experimentation within safe parameters but also like set the expectation that this is here to augment how we do our work so we can focus on the higher value work as well, right?

But from an AI perspective, I mean I think I'd be remiss if I didn't talk about the power of AI and what we're going to see and what we are already seeing around protecting and detecting fraudulent activity at a pace that a human could not. We need these tools. These are tools that are designed and will be designed to protect organizations that instill trust because we're going to be able to quickly identify where something's a miss. But it's one of the first lines of defense when we talk about how to create a risk culture that we have to start using if we're not already because the power is in all the data that's there.

Janet Lalonde:
Yeah, I think it's that 12 to 18 month horizon that you referenced Kathleen that for me I find incredibly eye opening. When we have this session next year, it's going to be the agentic commerce that is going to be the table stakes, right?

Abraham you have anything that you want to add on the AI topic before we move on?

Abraham Tachjian:
Yes, I think it's been covered fantastically. I think in terms of opportunities one of the angles that I think has the most promise is perhaps on the more boring side in terms of what's happening in the background with respect to the payment transaction. I think Rebecca made a very good point with respect to fraud and how fast fraud evolves today and the ability of AI to actually be ahead of it, to recognize patterns that humans or existing data models may have you know challenges recognizing. So, I think that's really going to instill confidence like we talked about earlier and trust in this mechanism if you'd like to call it that. And I think that'll lead to greater adoption.

From another perspective, I think it's really going to empower consumers with respect to how they pay. We had a great example Kathleen was giving with respect to agentic AI and how merchants could be potentially disintermediated by not being the front end of the transaction.

You've spent all this time and money optimizing search engines to get people on your website with a lovely experience and suddenly that's completely disintermediated with an AI agent that summarizes a product for you and actually executes the transaction without you actually going on the website.

So to a certain degree it empowers consumers in terms of saving time but there's also a risk for merchants and you know other payment companies that offer payment tools as well as merchant tools to make sure that you know part of their business isn't displaced.

But at the end of the day that really empowers consumers to make decisions faster and perhaps focus on what's the best payment method. My friends that know me, know me as a huge rewards guy and so I love to make sure that every dollar I spend gives me maximum value between cash back between the airline points. And I think one of the great examples, at least personally for me from a selfish perspective, is having an AI agent that actually helps me to make sure that I'm getting maximum amount from every dollar I spend from a rewards perspective, from a consumer protection perspective or a variety of other perspectives.

I think those tools are really going to you know kind of erode the motes that exist from a product competition perspective where you know consumers may not necessarily switch because the challenges related to that, but you you have an AI agent within a certain framework that facilitates that transaction for you, facilitates switching, allows money to be moved between accounts while you're sleep, which, again I'll focus in on the competition angle – that's really going to bring it up. I can imagine, like my other panelists, what five years down the road will look like. I'm just hoping selfishly I have more travel points.

Janet Lalonde:
Thanks Abraham. So I want to talk for a minute about partnering and partnerships. I think you know as is evident just from our discussion over the first 40 minutes here, the pace of change and the amount of complexity in the payment environment is significant. And it is going to require partnerships for organizations to be able to keep up. So, how can we ensure that we're addressing current and future market needs through effective collaboration? Are we doing a good job? Do we need to do more?

Rebecca, your thoughts?

Rebecca Tascona:
I would say the Real-Time Rail example right here is an example of collaboration. But to Abraham's point before, I think the ecosystem and the new entrants are all bringing something unique to the table and we're firm believers that we can't build it all on our own. There's just no way. The pace at which things are changing and evolving client demand, it requires creativity and innovation from all over.

And so for example, we have a public partnership that we've announced that we've had in place with a company such as Fispan, which allows us to offer integration with ERPs through our online experience to our clients. We would not be able to build that utility into the rest of the industry on our own. We needed to work with a partner and that allowed us to bring it to the market very quickly.

So I just think that partnerships are going to be the foundation of innovation going forward and you see it in all the news announcements that keep going across the newswires every week that different companies are partnering to bring a new capability. And to me that's just going to be the way that we do business.

It does require that you know you strengthen your controls around the partners that you choose, some of those controls to make sure that you're comfortable with it. And of course when you introduce different players into your own ecosystem like that's when cyber risk also heightens and so having those controls in place like you can't understate that but if you feel comfortable in your practices there like you you have to have a mindset that partnerships are critical to continue to evolve.

Janet Lalonde:
Thanks, Abraham.

Abraham Tachjian:
Thanks, Janet. Well, I think the thing with partnerships is at its core, you need to have trust with your counterparties, right? Partnerships can only go so far as the extent of trust that you have with the organization that you're working with. And I think we've done a pretty good job over the last year with implementing policy to increase that trust.

And the example I like to give is the RPAA. As a financial institution when you're trying to work with an organization that has a capability that is more accretive to what you have, where you can't build, the first thing you're going to go through is some sort of due diligence on your counterparty and typically based on existing guidelines. Those are very laborious if you've gone through any of them challenging. So I think regimes like the RPAA where you have Bank of Canada oversight on these potential partners to banks and credit unions where you've implemented certain regulatory requirements right from an operational perspective, from an incident management perspective, from a fund safeguarding perspective. I think it opens the door to easier conversations in terms of having trust with the party you're doing business with.

So I think when we lay the foundation of trust, whether that's consumers or whether that's organizations working with one another, I think you facilitate that evolution of partnership.

Abraham Tachjian:
Thanks. And Kathleen?

Kathleen Woodard:
Maybe I'll just add in two two quick things. I think both Rebecca and Abraham have touched on this future is not going to be won by any single party. It is going to be where collaboration and ecosystems are the name of the game. One of the things that I would just say broadly that I'm seeing is I think the industry recognizes that is the case. There is lots of work being done in terms of picking partners and thinking about what is the path that's going to give them the most optionality, flexibility for the future. And that is of course important, but I think we have to recognize that in this world there is not going to be one provider. There's not going to be one LLM model.

There's not going to be one solution that is going to be a winner takes all. I think we are going to have to all operate in an environment that is very much about an open ecosystem. So, I think as the industry is thinking about designing for the future, partnerships, collaboration, ecosystems, I think that there is a good job happening. What I see is recognition that that's you know critical. But I also think there's real understandable hesitation just in terms of who's the partner that I pick for the future and how much does that commit me to a certain path.

None of us on this call know what you know in 12 months from now what the world's going to look like in this space. So I would just say you know one really important thing is we're thinking about this collaboration ecosystem, making sure that you have flexibility and choice by design built into how you are enabling that future. And then the second thing I would say is that, I think Abraham touched on it, about security and fraud. When I think about collaboration and ecosystems I think competition should stop at the security layer.

Security needs to absolutely be a committed shared understanding and commitment from all of the players in terms of making sure that we are building the trust that every panelist has talked about and security into every layer of what we're doing for this ecosystem.

Janet Lalonde: 
Great. Thanks. So, we're going to open up the floor to audience Q&A in a moment. So, please start submitting your questions in the ask the speaker box. And I'm going to close this portion of the discussion by asking each of our panels, what is the biggest opportunity that you see on the horizon in payments? And Abraham, I'm going to go to you first.

Abraham Tachjian:
I'll keep it quick, Janet. I think the biggest at least intriguing point for me as well as opportunity is how conventional payment rails as well as upcoming payment rails are going to work in conjunction with new payment methods such as stablecoin, right? With the oversight under the Bank of Canada, I think the government's done a pretty good job in terms of telegraphing the potential of this type of payment product. I'm curious to see how this is going to work with domestic payment schemes or crossborder payment methods. So I'm really interested to see how we as Canadians and the Canadian ecosystem can leverage these two payment rails.

Janet Lalonde:
Great. And Kathleen next.

Kathleen Woodard:
I think we've talked about it. I would say you know the big opportunity here is just this convergence. We've been talking about it, real time infrastructure, open data, agentic AI, like all of these things coming together is going to enable intelligent embedded inclusive payments, which means transactions can be optimized, they can be contextual and also increasingly invisible. So I think the real opportunity here is that institutions have to build for interoperability, trust and embedded experience. I think those are going to be the critical components for shaping the next decade of payments.

Janet Lalonde:
Thank you. And Rebecca, biggest opportunities on the horizon.

Rebecca Tascona:
I would echo that around the embedded ecosystem. We just launched something where we have a sandbox for all of our APIs that allows our clients and prospects to basically take BMO APIs and integrate it within their own experiences.

And that's like the next level of innovation that is here. It's here very much in the US and it's coming to Canada at a fast rate. So I would say the embedded piece is one of the biggest things and I would say also that obviously with the advent of stablecoin and tokenized digital assets that is also something that a lot of Canadians and companies are thinking about and what does that mean for their business models. And then finally 24/7 we've talked about it in terms of payments but you're starting to see announcements of business models moving 24/7. The New York Stock Exchange just announced some of their intentions and that's really I think where the future is going and how companies choose to participate.

They've got to be thinking about that because if you move 24/7 that also means your service models need to be available in a different way and it just opens up a lot of different ways of thinking about how we do business.

Janet Lalonde:
Thank you. So we do have a question from the audience and I'm going to give this one to Kathleen. It's AI related and then see if the others want to weigh in. But Kathleen, you talked a lot about the potential around the use of AI in payments, but do you also see impediments related to the adoption of AI for payments that we have to overcome?

Kathleen Woodard:
For sure. Yes, absolutely. It's probably a good call out to, you know, we like to talk about the shiny new objects in the possibilities but the reality is there is a lot of work that has to be done. I would say I think most people on this call know this but the limiting factor for AI adoption is not the tech, it's not the security, it's actually the culture of an organization. And I know that sounds very fluffy but you know we see it over and over again.

So, as people organizations are trying to think about and this applies to payments as you're trying to think about how do you move quickly and securely down a path of extracting value for your organization because you're driving efficiencies or you're introducing new revenue streams for your customers, that it requires a degree of clarity around the northstar. What are you trying to drive in terms of your business strategy?

But it also requires collaboration internally in these organizations around just how do you govern this? I would say just really making sure organizations are very, very clear around the role of business, the role of IT, the role of risk management in these organizations and how they are working together aligned against the strategy and then working through all of the very real issues that we all need to solve. That is, I would say, the biggest thing. I know it's not a it's not an easy thing, but it's just time and time again, when we're in these large organizations and even in, some of the the payment use cases that I've been seeing where we're we're doing some some really innovative things that are going to drive real value, but it's also about making sure that getting everybody focused on alignment around how you're going to deliver that value.

Janet Lalonde:
Thanks, Kathleen, anything that Abraham or Rebecca would like to add on that one?

Abraham Tachjian:
I can add. Yeah, I think I can add on that, Janet. And we were kind of alluding to it earlier with agentic opportunities. But I think the challenge is there or something that may limit adoption is kind of a framework around how we remediate issues because inevitably something's going to go wrong and we're going to have to determine who's on the hook for what.

I mean, that that is inherent to anything that has to do with the movement of money. And so I think one of the challenges there is lacking infrastructure or rather a framework, I would say, be it legislative or voluntary in terms of how we address customer issues if a payment goes wrong, if an agent makes the wrong payment, if an agent makes a payment more than they're authorized for. There's a variety of ways this can go wrong. Now I don't want to be you know bringing up doom and gloom. But I think it may limit the adoption if we have too many situations where consumers are not in the best position and we don't have mechanisms to quickly redress those issues and quickly put them back — quickly make them whole again. I think that would be an issue potentially for adoption.

Rebecca Tascona:
Can I add one comment, Janet, because I see there's a question about how do you ensure there's trust in payments. I think that's such an excellent question and I'm just going to bring it to something that we spend a lot of time on because no matter how much we modernize and go move to Real-Time Rail, we have to spend a lot of time with whoever's initiating that payment because there's a lack of understanding that once you hit send, it could be gone.

So when you think about the companies that we work with or even the consumer, making sure they understand the parameters of the payment rail they're using as well as making sure they truly trust the instructions they're receiving. So when you think about scams, fraud, account takeovers, stuff like that still exists. People are still not calling back when they receive written instructions to make sure those written instructions are actually coming from someone that can be trusted. And so as we move to real-time payments, I think one of the biggest pieces we have to do as an industry is make sure that we're educating. We're educating whoever is actually initiating that payment what those parameters are. And if they accidentally send it somewhere it shouldn't be sent, what does that mean in terms of recourse, because I do think that there's a lack of understanding. And when you think about some of the companies we work with, they have new employees joining all the time that are accountable for some of these tasks in their organizations. So how do you make sure that you have a really strong program that's educating those that are in charge of payments in any company.

Janet Lalonde:
I mean the question is really around what are our organizations doing to help build and enhance trust in payments and to enable adoption at scale? I agree with your comments completely and I think we can also tie it to something that Kathleen said a little bit earlier which is, when it comes to security and fraud you have to leave competition at the table. And I think that collaboration is key in that domain as well. And that collaboration when you have all of the players in the ecosystem working together to build strength in the area of fraud prevention that builds trust. How about you, Abraham? Anything that you'd like to add about trust building and collaboration?

Abraham Tachjian:
Janet, could not have said it better myself. Nothing to add. All right.

Kathleen Woodard:
I just maybe I'll just add on one thing. I think that the industry is really trying to figure this out. So at Microsoft, we have something called Azure Confidential Compute, the ability to have enclaves where nobody is seeing the data and you can run analytics and insights on top of that.

And there have been some examples of partnership in the industry in terms of combating things like human trafficking or AML. I just think things like that where, Rebecca so right, it's all about education. It's education for consumers but it's also education for all of us, just in terms of understanding the risks of using some of this. And then once it's education it is also then really trying to think about how do we all as players in the the Canadian ecosystem, how do we ensure that we are you know both deriving our own individual value for our own organizations but also protecting the entire ecosystem system by experimenting in some of these things, where you you can run some kind of analytics you can also have shared fraud databases. There's lots of possibilities there and I think that we we have seen some of that and there's I think only more to come.

Janet Lalonde:
Thank you I think it's been an absolute pleasure and a really engaging conversation. So thanks again everybody for your time and your interest and have a great rest of your day.

Elizabeth (Liz) Dempsey:
That was Janet Lalonde from Payments Canada, Abraham Tachjian from Brim Financial, Rebecca Tascona from BMO and Kathleen Woodard from Microsoft.

I hope you enjoyed the discussion. For more like it, be sure to subscribe to this podcast and join us at the Payments Canada SUMMIT in Toronto from May 5 to 7.

To learn more on how to attend in person or virtually, visit thesummit.ca. There, you can also browse our recently released preliminary agenda. There are already lots of great sessions to explore.

And for our podcast listeners, we're happy to share a promo code that's all one word. SUMM, with two M's, PODCAST 26. That's SUMMPODCAST26. This promo code will unlock a complimentary ticket to The SUMMIT’s digital experience as a thank you for being a loyal listener.

Thanks for listening to this episode of The PayPod and thank you to all of our guests.

Until next time, I'm Liz Dempsey.