Episode 45: Takin’ care of business (every working hour) — The RTR reality

Elizabeth (Liz) Dempsey:
Welcome back to The SUMMIT Summer Series, a special presentation by The PayPod, the podcast from Payments Canada that explores the trends and topics influencing payments in Canada and around the world.

I'm your host, Liz Dempsey.

Today, we are bringing you an especially well-received breakout session from the stages of The 2026 SUMMIT. The session, entitled "Takin' care of business (every working hour): the RTR reality," dives into the shifts occurring in Canada as we prepare for the launch of the Real-Time Rail.

As the country moves toward a national real-time payment system, success in this new era will be determined by how participants leverage constant connectivity, rich data and manage liquidity to create value for Canadian businesses.

In this episode, we join moderator J.D. Penner, Vice President of Wholesale Banking and Payments at Intellect Design Arena, as he moderates our expert panel. 

Joining the discussion are Jude Leclerc, Senior Vice President of Transaction Banking and Commercial Banking at CIBC, Dougal Middleton, Managing Director, Head of Treasury Services and Payments for Canada at J.P. Morgan Payments, Steve Miller, Vice President of Cash Management at Royal Bank of Canada and Todd Roberts, Senior Partner, Market Infrastructure and Payments Leader at Deloitte Canada.

If that’s not an all-star panel, I don’t know what is.

Together, they discuss what's required to run real-time payment systems, the critical role of data in modernizing corporate workflows and the balance between transaction speed and system safety.

Enjoy the conversation. Here is J.D. Penner.

J.D. Penner:
Good morning everyone. Welcome to the “Taking care of business every working hour” RTR session. I'm J.D. Penner and I'll be your moderator for this session. 

We do want to talk about how the landscape might change in the market as a result of RTR, what the reality is going to be and including the good, the bad and the ugly. And with that, I'll introduce our panel, starting with Jude on our left. Go ahead and say a little bit about yourself.

Jude Leclerc:
Hi, I'm Jude Leclerc. I am head of transaction banking at CIBC.

Dougal Middleton:
Dougal Middleton. I lead the payments franchise for Canada at JP Morgan Payments. 

Steve Miller:
Awesome. So, Steve Miller, I lead the cash management business at RBC. 

Todd Roberts:
So, Todd Roberts, I run the payments business at Deloitte 

J.D. Penner:
Very good. And I'm J.D. Penner. I'm a VP of wholesale banking and payments at Intellect Design Arena Limited. If you haven't heard of them, they're a tech company that provides retail and wholesale banking software to financial institutions large and small. 

So let's start with the technical plumbing for 24/7 banking is a given, but really the strategy is where the winners will be decided. For each of you, what is the most critical shift your bank is making — this is for Jude, Dougal and Steve — that you aren't just available 24/7 but you're actually bringing value and constant connectivity that drive new growth? So what's that look like for you?

Jude Leclerc:
So, you know, I think we're moving away from just a passive availability over a 24/7 period to how do I make every minute of that 24/7 work for my clients better. We're talking about AI. We talk about actionable insights. We talk about data analytics, the connectivity, the real-time, all of that coming together to give our clients much better solutions moving forward. And it's not unlike the revolution that we saw with the mobile experience two decades ago. So, in the mid 2000s, we went from all these digital experiences, but now everybody had smartphones. And smartphones meant you were interacting with what was in your back pocket. And at first, for those of you that are old enough, you might have remembered, it was like, okay, you would just log on to your bank's website and it was tiny and it was like your fingers were as big as three buttons. And you never got to where you wanted to go. And then eventually, with time, you know, we all got on board and we're like, we're building apps, we're building mobile experiences, and having the digital experience and on laptops and on desktops was just as important, if not as as the mobile experience. 

And that was sort of your phase one, the mobile experience, simplified interfaces, etc. Phase two of that was, well, what does my phone have that my desktop wouldn't have? And now you were looking at, you know, you're loading your cards onto your phone, you are QR scanners, bringing the QR scanner technology into how you make payments. Now, we're at the precipice of yet another revolution and it's the AI revolution. And I know we're going to talk about a lot of that probably throughout here, but I'm just going to because I started with digital experience, I'll finish with that here is if you think about your URL experience, you know. Let's say, as a transaction banking, treasury services, you know, all the names we are called, most of that is done with the idea that it's a human usage on the other side. But what if it's not a human using your URL on the other side? It's an AI agent. It's an AI bot. Does that use your URL experience the same way that a human would? And the answer obviously is no. And so I think one of the big focuses for a lot of us in in banks, but also at our clients, in our in the corporates, whatever, is how does the AI agent use that URL experience, not just the human because in all, you know, in the future, it probably won't be the human at the corporate client using your URL experience, it will be an AI agent.

Dougal Middleton:
Well said. I think from our perspective, it's really about driving customer outcomes and client outcomes. And given our multinational, corporate client base, it's about being able to deliver that consistently across the footprint everywhere we operate, real-time payment schemes on a 24/7 basis. And to do that, we really spend a lot of time zeroing in on the types of problems that our clients are trying to solve and helping marry up the characteristics of the RTP realities with the problem set that they're trying to solve for and looking at which characteristics are best employed to really get to the most effective solution for them. Whether that's pay-in and payout behaviors, whether it's client disbursements in the insurance space. It's really about really zeroing in and helping clients truly understand the value prop of not just instant, but to Jude's point, all the other characteristics that come together to deliver against that outcome. 

And I think all of that has to be really soundly underpinned by strong controls both on the fraud side, but also on the liquidity and the funding aspects of it. And when you're facing a multinational corporate treasury team and they're having to deal with settlement windows locally across multiple time zones, that reality of how you fund operations across jurisdictions when you've got really large-scale payout businesses happening on local real-time payment schemes, it's really really important that you're able to bring all of those types of aspects to the solution so that they're able to continue to run on a 24/7 basis when their end clients really truly depend on those types of experiences. I mean, we start to layer in all of this with the evolution of AI and agent, etc. And it really becomes super important that the focus on the foundations is really, really prominent to be able to deliver on those experiences.

Steve Miller:
Yes. And as you said to Jude, well said. So, just continue to build on the themes. So really when I think about it, I sort of pocket into a number of areas. So like Jude and Dougal said, it’s really about workflow. Our client's workflow is entirely changing as far as process. So it's with AI, it's with the human processes going into automated solutions to be able to do that like the real focus has to be moving from clients coming to a digital solution to us being embedded into their ecosystems and being able to move forward bringing in that contextual advice but also bringing in the decision factors around liquidity, around rooting of the payment all of that sort of component has got to be the platform which we build on. In addition to the AI taking advantage of things like open banking and how we can help as far as supporting, you know, multi-bank liquidity solutions in real time 24/7 over the weekend from that view. The intelligence has got to be totally embedded into that infrastructure. 

And the last piece, which you both touched on as well too, is really the trust. Like we cannot work at this velocity without having that element of trust. Not just from an execution perspective, but from fraud, from an AML, from a regulatory perspective for our clients; all of this is going to scale. Fraud's going to scale. You know, the complexity of our use cases are going to scale. So, we've got to go back and consistently look at the use cases that we're going to bring to our clients, the ones that we're talking about today, but the new ones that are going to emerge over the next five years plus.

J.D. Penner:
And, I think we used all of the potential payments industry buzzwords in the last three people. Good job. 

Todd, as our consultant on stage today, you have a bird's-eye view across the industry. From your perspective, what's the most critical shift an institution must take either in their framework or in their technology or in their mindset to ensure they're using this connectivity to scale? 

Todd Roberts:
So, you know, a few buzzwords as well. We're in a moment in time that we've never experienced. So, you can use Carney’s, “we're in a rupture.” You can talk about a post-mythos environment. And if you look at your own environments and you say, has anyone here had more things to do ever in their previous life?

So, in that context, and you look at how much money your institutions have to do discretionary things. The answer is almost always 5 to 10 to maybe 15 per cent of your total budget goes to doing things that actually move you ahead. We're spending 85 per cent of our money on treading water, like that has never made any sense, you know. 

So, being able to find a way where you can change the dynamic of the resources that go into things that will help you, you know, in the future. This isn't me shilling for intellect, but it might be a little bit. You need to think through how do you disaggregate the messy back end from a thin front end because until you change that dynamic, you know, you're going to be chasing the rabbit all your life. And the world is not going to get simpler. There's zero per cent probability that this government or the Trump government or whatever future international galactic government happens is going to make life easier. Life is going to forever be more complicated and it is going to forever move faster. 

So if you just accept that for a second rather than bemoaning it, what does that mean that you have to do? It means that you have to fundamentally change how your environment works. You need to be more agile. You need to be able to be API native. You need to embrace agentic. You need to embrace AI. These are just the practical realities. And so organizations that can find a way to change the dial to put 85 per cent of their money into “net news” rather than putting 85 per cent in terms of feeding the dinosaur. Those are the ones that will do better.

J.D. Penner:
Well, why don't we pick up on that? How are your organizations – Jude, Dougal, Steve – handling that challenge of your legacy architecture not serving what you need to do?

Jude Leclerc:
So I'll answer it in two components. The first we'll pick up on the data component yet again. So look, we talk a lot about APIs, we talk a lot about AI, and that's great, but it presupposes something very basic. It presupposes that there is data to start with, that it is being held in an infrastructure to begin with. And above and beyond that, if you want good actionable insights and, you know, good tailored solutions for clients, it also presupposes a few other things about your data. It presupposes that your data is accurate, which might be a big thing. It presupposes that your data is timely and it also presupposes that your data is accessible. 

And we know that in a lot of banks and a lot of large corporates, it's certainly something that we see across, you know, larger older organizations is that accessibility is not as obvious as it should be. I joke around sometimes that the most powerful tool we have in any organization really is the Excel sheet because that's really what connects two systems that don't talk to each other. So as we move more and more towards the AI world, towards the API world, you are looking at data that's got to be accurate, data that's got to be timely, and data that's got to be accessible. So that's the data piece, and that really speaks to a lot of what Todd was saying earlier. 

The second piece of this, because I am a payment nerd, is the macro system in which a transaction or a payment lives is not just in the payment platform. There is a whole host of systems prior to the payment platform that gather the instruction from the client that's going to have to do everything from authentication, authorization, you know, it's doing a whole bunch of checks with a bunch of middlewares in the middle. It gets the payment platform so that the instruction can be released and then it goes through a whole host of downstream systems: sanction screening, transaction monitoring, fraud management, etc. And so we focus a lot on the transaction becoming real-time, and we talk about real-time payments. The reality is that in order for a payment to be real time is that the 34 upstream systems and the 73 downstream systems, they need to move just as fast if not faster, as well. You know, and most of us who work in payments, especially if you've worked in the operations side or on the servicing side, you've all heard about that crucial payment that needed to get through. We promised the client and now it's stuck in “name the AML system,” let's say sanction screening, and it's because it didn't go STP and now it's in a queue. And so we talk about real-time payments, but in order for real-time payments to occur, you obviously need the end-to-end journey of those one hundred-plus systems up and downstream. And it can be really downstream. We can even talk about dispute resolution if we want to. Right. So that's the thing. It's not just the clearing and it's not just the payment. It's everything else.

Dougal Middleton:
Yeah. And I think the reality of payment, excuse me, is that you will always have this long, long list of things to do. And it doesn't matter how big your budgets are. The product backlog is massive. Because of that value chain that Jude just described. It is very sequential and that orchestration to really get it into a real time end to end is a massive uplift for organizations and you have to tackle it in a way that you're driving to low latency, high frequency, while maintaining the safety and control of the entire system on the end to end. 

And if you can't prioritize that and if you can't sort out where the biggest blockers are and the biggest boulders to navigate around are you're going to be stuck with, you know, a front- end experience that may feel and seem real-time, but you're not going to be able to deliver on the value prop on the end-to-end aspect of it. And that gets back to some of the earlier conversation about how do you actually solve the problem for the customer. The minute they have a problem, the minute that it hits a friction point, the minute it gets stuck in sanctions and we're not processing the payment end-to-end, they start to lose trust in the system. They start to lose trust in the offer. And then adoption suffers. And when you scale that across your business, you start to really impact the ability for your customers to really take these things on. And so you have to be able to focus and prioritize, but at the same point, it's not all about your budget and it's not all about the extensiveness of it. You have to be pragmatic and you have to focus on where the biggest pain points are.

Steve Miller:
Yeah. I love that you started with data and Excel. I mean, I think the reality is that when you look at our customers, I would say that even the ones with ERPs and treasury management systems, Excel is still their bread and butter for 90 per cent of them and how they're moving. But I think the relevance of that is, so how so how do you start tackling those then is is sort of the is the key and how do you start thinking about delivering against that and I think what you really have to be doing is looking at you know first of all is helping your customers get the right data from the from from their systems, which unfortunately a lot of the time is is Excel, coming in and they're leveraging the ISO capability that we've been talking about for over a decade and still just beginning to get that traction. 

But then it's how you build it, and it's really how we’ve been thinking about it. How you tackle that problem, across creating those microservices of scalability across in which you're going to build: build the data, build the AI infrastructure, build the microservices to execute against that, all in milliseconds versus hours, which is the challenge that we're all sort of facing today to your to your point. And then, how do you effectively bring in the intelligence layer over top of that to solve those problems? Because it is about connecting. You know, we're lucky as far as, you know, those of us on the stage here. The amount of data we have allows us to bridge some of those gaps where the data isn't complete. How do we leverage the data that we have in the ecosystem overall? How do we share the data across the banks and to be able to solve those problems to increase the straight-through processing, reduce the fraud risk, and reduce the overall risk to our customers? I think that's the approach that we're thinking about taking going forward.

J.D. Penner:
So, let's pick up on that because we've talked a little. We've sort of alluded to some of the use cases and what you know customers can expect. But let's think about that. Let's say RTR is real and live. Let's assume that for a moment. What are the corporates and commercial clients, like some of them I've talked to have said, well, I'm happy with the kind of payments I do today. They're predictable. I'm going to predict my liquidity this way. I don't wake up on Saturday morning at 2:00 a.m. saying I need to make a $10 million payment. So, where is the real-time treasury, or real-time payment value, for corporate-commercial?. And you've had experience presumably with that in other jurisdictions. 

Dougal Middleton:
Yeah, and like it really comes down to the fact that it's not about speed, right?. It's about the value prop, it's about the other aspects of modern payments. You can pick even a modern RTGS with straight-through processing that can be fairly real-time. But we all gravitate to the RTP dialogue and the liquidity implications, right?. But, it really comes down to how you are positioning those aspects against the client challenge and how you are making sure that they can understand where these things fit for particular use cases. It's not a panacea that doesn't solve every problem. To your point, there's a lot of comfort in the batch and reconcile aspects of things like predictable payments, predictable payroll flows. But there's very, you know, unique and more modern problems whether that's instant client experiences in the insurance disbursement business, what have you, whether that's earned wage access, those types of things demand something different. 

And I don't think we're at a point yet where that's a mass market type of ideology. But at the same point, there are enough large-scale providers out there. There's a lot of large-scale tech companies that are actually recognizing and realizing the demand of RTP and gravitating to that as the fundamental of the payment processing engines that they have and the businesses that they run. And they're starting with that. But I think for the general corporate treasurer, there's a point in time where RTP and all the implications that come with it actually help them. And then there's still traditional methods, traditional payment rails that will continue to operate and continue to sustain other core aspects of the business.

Jude Leclerc:
I think as well, we talked about the RP, the availability, the real-time, and we've mentioned the data. The data itself can help the corporate treasure. It can also help other products we sell to become more powerful, right? So the payment data helps you sell a treasury solution and the treasury solution is really the thing that the client needs. So you know the data that comes from a rail that takes more data allows you to sell, I don't know, next-generation virtual accounts and that's what allows the client to do the reconciliation and the reporting they really need.

Todd Roberts:
Yeah. So if I could just build on that, like I think there's always an assumption that we're always talking about rails. So one of the things that I think we're going to see going forward is increasingly institutions will self-clear. Like they will manage, you know, liquidity and distribution within their own environments on a global basis. You look at what's happening with all the blockchain pilots and versions of CBDC's.

I think you are going to see more and more financial institutions embracing the notion that I can handle my own traffic for my own clients on a global basis more efficiently and only having rails, whether they be national infrastructure or global infrastructure, for last-mile elements. I think what you're also going to find is that the whole notion of, am I really going to make the investments necessary to do real-time liquidity management back to clearing and settlement with infinite complexity or am I just going to take, you know, keep it simple Barney kind of standard and say I'm going to put extra capital in. Right? So there's a real tradeoff around whether the best answer is investing in yet more process and yet more technology or is a cheaper answer to simply say I'm prepared to over-capitalize for a period? And that is a real trade-off that I'm seeing more institutions being comfortable with not just financial institutions but also clients. Right? Is it sensible for you to park a certain amount of liquidity in other jurisdictions because that is a necessary cost of you doing business? We keep talking about ISO 20022. So, at some point in time, we're actually going to use the MX message, but it's going to be when we have ERP solutions and more importantly, financial institutions that are saying, "I'm going to support the ERP solutions, such that it's the ERP systems themselves that are actually populating an MX message. And I think once the financial institutions embrace that change, I think we're going to find corporate treasurers will also embrace that change." But I do think people have to be a bit more flexible in how they think about this because technology and process is not always the answer. National rails are not always the answer and the RTR is going live this year and it's going to rock.

J.D. Penner:
So how do you keep the pulse on liquidity like one of the interesting things when TCH-RTP launched in the US I think even TCH was surprised that the first use case for the corporates was cash concentration right? They weren't using it for payables receivables or payroll; they were using it for cash concentration. Now the US has a legacy of segmented banking and all that kind of thing over 50 states so that's an understandable challenge for them to address. How do you see that playing out? Like what do you see? How do we keep our finger on the liquidity pulse for clients and how are you handling that challenge? Or how do you expect to handle that challenge given that it's coming?

Jude Leclerc:
I think for me, I know we're here to promote all the new stuff and the Real-Time Rail and everything, but to me there is a real role for our mature infrastructure, our batch payments. I mean, and I'll look I'll plug something from Payments Canada, they put out a really great report every year, Payment Trends and Methodologies. I hope I didn't misquote it. But in which it's quite clear that in Canada 98 per cent of businesses are small and medium-size enterprises. One point eight are mid-market and 0.2 are large corporates. Now obviously there's an inverse relationship for the volume of payments. 
But what I think is important to remember is that the vast majority of clients in Canada, especially businesses, they're a farmer. Payments is something they're just kind of doing on the side that they have to do just to make the business work, but it's not their passion. You know, the trucking company, the barber shop, that the payment stuff isn't their passion. And so, like you said, Todd, they don't want to invest a ton of money into an IT system. They're a barber shop, right? So, if you have and you leverage predictable payments, payroll is a perfect example of that. You're a gym, you're collecting membership payments once a month. Predictable payments, EFT infrastructure, like honestly, is perfectly good. And a lot of clients don't want to pay the price point of a much higher real-time rail, right? That they're happy again to pay for something that is a sunk cost of very mature infrastructure. 

But my reality, especially when you're re-meeting a lot of clients, is you look into their operations and their operations are 9 to 5. They're not 24/7. Greta, who's been doing something the same way for the last 30 years with her big knuckles, she's going home at 5. She's going home at 5 and she is not staring at a screen all day long. She has batched her activities throughout the day to do certain things at certain times. She will do her reporting and reconciliation at the end of day. Once that's done, she'll do her end-of-day positions. She goes home, she has dinner, she plays Clue with her friends, show her kids, she watches some TV, goes to bed, comes out in the morning, and in the morning she'll look at her morning position. She is not monitoring this 24/7. So I think there's a segment of clients for whom 24/7, AI, APIs, all the data in the world, there's very large corporates out there that are really, really important that need this. There is also a massive amount of businesses in Canada that are just not functioning that way. And so having investments in the dual rails is important because not everybody needs everything real time.

Dougal Middleton:
I can envision Greta is really frustrated with all of the manual overhead that she has to deal with every day. She's punching walls before she goes home. And she's got 20 years of wear on those knuckles. And I would hope at some point we can bring her better, more fruitful solutions that can get her past that manual reality and give her a little bit more streamlined experience. But anyway, I get the point. 

I totally agree, like Canada is primarily a small business commercial economy, right? And the multinational problem applies to Canada for a very, very small part of the population. And Canada is another part of the liquidity pool that the multinational corporate treasurer has to be concerned about.
But given that's like a big chunk of our business here in Canada, we have to make sure that we're enabling our clients for that reality of liquidity provisioning and ensuring that we're giving them those liquidity tri those liquidity solutions that are actually triggered off of the rich data and they can actually make their fund sweeps happen globally across the different time zones and they're not chasing those RTGS local cutoff times by sending money and hopping around various jurisdictions. And so a big part of that liquidity pulse is helping them shift from, you know, that fragmented, segmented reality across different jurisdictions into something that's going to give them that liquidity visibility in a far more on-demand reality and allow them to react to different needs across the globe. So that they can keep, you know, the payments flowing and the liquidity flowing to fund their operations. 

But certainly a big part of a lot of these use cases in the corporate treasurer space aren't necessarily about the disbursement activity. It's about the inter-company funding activities, right? I think with the uplift that we've even seen in the RTGS systems here in Canada with links, etc., that starts to bring far more achievable STP rates for everybody, which gets end-to-end that much more fluid, which helps liquidity flow when you're doing inter-company type transfers and activities. I think Todd, you touched on the world of tokenization, digital assets, etc. I think I'd be remiss if I didn't at least make a bit of a plug here. But the reality is like, you know, a lot of our multinational corporates that are adopting our Kinexys platform. It's been in market for the better part of 10 years now. And if we compare the volumes that we see on that platform with the reality of what we see globally on every other platform, we do about 13 trillion dollars in volume every day. But that platform, the Kinexys platform, is only seeing about 8 to nine billion on a daily basis. So, it's starting to kind of pick up. And that's all primarily inter-company activity because you get that, you know, 24/7/365 millisecond type activity that's very programmable, triggered events on liquidity flows and that's super important for the multinationals.

J.D. Penner:
Steve, RBC has a good portion of the large corporates in Canada. What are you seeing from your end?

Steve Miller:
So I think a lot of our corporates are still very much historians when it comes to when they look at balance and transaction reporting. They come in and they effectively look at what's happened going back in time and you know they come in at 6 a.m. or they come or they have a group that comes in at the end of the day. We're still seeing that. Like, to your point, we're still seeing that the corporates work on, you know, a 9-to-5 that they have their processes and they have a batch and and those sort of things. The global ones for sure though, are looking to see how they manage exactly, to Dougal’s point, the liquidity that that's going on. 

But we also do see customers adopting real-time payments already with you know the APIs of e-Transfer and the business capability there. We see it in the gig economy that you talked about Google. We see it around media and entertainment. We see it around insurance payouts. And what we're then seeing and with those customers that are adopting it, thinking that through, is then how are they managing that liquidity position because they no longer want to keep staff in 24/7. So now they're looking at what is their infrastructure, what is their TMS system, what is their ERP, how do they actually then create that platform. And then their demand of us is then how do you actually create more intelligence and more insight try to surface more of that real data to be able to bring into that platform so that they can actually have that position and can walk away and still manage their business on a 24/7, over long weekends over you know and liquidity decisions are happening in real time for them you know requiring things to come in. 

We're seeing a lot of interesting use cases coming out of, you think about the shipping and trade and the international component. So the ports don't close. You know things come in and things need to be able to move forward. They're no longer stalling because they need to be able to move that money. And so we see those clients started to look at how they move away from your Excel and into something that they can embed and automate going forward. 
My view though is that most of our customers we need to bring them along just like we need to have bring them along with ISO just like we had to bring them along with digital. There's a huge responsibility across all of us here to educate our customers around what is the "art of the possible" for them. How do they think about their workflow changes and then how do we support them in executing that? And that's an industry thing not just an individual bank role that we've got to take them.

Dougal Middleton:
That's a great point. There's so much inertia in the market, right?. Especially when you think about the spectrum of businesses. Everybody from a small business all the way up to a large multinational. There's such a wide variety of prioritization that they have for these types of services and we have to bring everybody along in terms of the value prop and understanding what they can do with it.

Todd Roberts:
So, I think we have this interesting thing where we all keep talking about real-time payments. But there's two things that I think have really massively changed over the past six months. It's cost sensitivity. Like, so how much does it actually cost me to run my business? And you know, the cost of payments is something that people are way more attuned to today than they were before. And the next one is financial crimes. So like, wait baby wait is the new drill baby drill, right? So you know why do you want fast payments all the time, right? So when you have a corporate treasurer that gets a request which is you need to send $10 million right now or I can't close my deal. Those are the things that all the banks are saying slow down.

So I think we have this dynamic that we are going to be dealing with in the very near term, which is the risk of at-scale AI penetration. The increasing sophistication of fraud rings and the greater price sensitivity of end clients is going to cause them to start saying how do I build deliberate friction into my payments experience because it protects me and two how do I look at doing things like I'm going to use the Automated Clearing and Settlement System. But how do I use that near-free payment mechanism yeah uh to be able to say I can have one of the memo fields to be able to direct me to a store that has the the concentration of the MX data because if I don't need the payments in real time but all I care about is the data payload you can go back to a CIBC data store postfact and be able to say I am going to extract the information that is necessary. So I can have a cheap payment with data if we just get a bit more creative about how we use some of our infrastructure. Because it's not always about speed because speed is greater financial risk and speed is greater cost.

J.D. Penner:
It's interesting because the banks and the payment rails I mean we've forced clients to understand the difference between the payment rails right and they don't care about the payment rail which was talked about before. But banks used to be the source of friction and now because banks are removing the friction the corporates and the businesses and consumers too have to introduce their own friction right so that's an interesting way of looking at it.

Dougal Middleton:
That's a big part of it I think we have to we also have to avail services that allow them to frontload the protections right before the payment decision gets made right and that's where I think a lot of that trust and safety aspect comes from where we have to start to introduce things like identity verification, account validation, those types of things that will help protect the payment upfront before it's actually committed.

Steve Miller:
I think the behavioral analysis around all that as well too. But actually we're seeing also a move to the controls themselves to the customer side versus from the digital platform. So how do they embed that into their overall process and from end to end as well. I think we're seeing clients unprepared for that kind of change. I mean the banks used to be the ones that protected the client from themselves and there's only so much we can do that you know your dentist doesn't brush your teeth for you, right? 

Todd Roberts:
But on that one, you know, what we have some we have some regulators in the room. Right. So I think this is an interesting opportunity for the regulators to start to say well are we actually going to have a digital identity framework in the country that everyone can rely on because individual institutions can’t right? I look at we got some friends from BC. BC has done a great job of being able to have, you know, driver's license and health card available to every British Columbian citizen. And then if we actually want to control fraud and if we want to be able to do agentic and we want to make sure that citizens are in control of their lives rather than the government or financial institutions or whomever. Citizen-centric thinking and protecting you know the country and enabling, you know, people to do what they want to do with their lives requires us to have some form of digital identity or at least digital authentication. 

J.D. Penner:
Now all of you have worked with smaller financial institutions and some of your institutions actually serve them directly. What are those conversations? I'm assuming some of you are smaller institutions, smaller banks, not one of the major five. What are you hearing and what are you saying and what are you talking about with your smaller indirect clearers that are having to figure out what they're going to do in this world? And I know Todd's had a lot of conversations on that front with some smaller financial institutions.

Todd Roberts:
I think the small financial institutions have both a luxury and a curse. The luxury is that they are small. So, they don't have the same amount of legacy integration that an RBC does. And when you were on the stage last year talking about the HSBC, you know, RBC integration, you see how hard it is when you are a large financial institution. So smaller financial institutions have the luxury of less complexity and they have the ability to be able to say, how do I look at my relationships with third parties to be able to plug and play.

The curse that they have is a lack of scale, right? So lack of scale is the benefit, but you need to leverage your relationships. So, I think they have to be able to in order to be agile, they need to, you know, have really good front-end systems like Forge, which is now being run by Intellect and Veraparks, the other solution that's in the marketplace. There are three payment processors in the marketplace. So, they need to be able to get over the fact that they have to simplify their environment. 

Smaller financial institutions are going through a radical level of consolidation that has never been seen before in the history of this country. It's not just this country, it's happening everywhere because financial services is a scale-driven business. So you have to sort through how do you leverage payments-as-a-service providers so that scale becomes your friend. And it's not your impediment. I think too many small financial institutions are behaving right now as though they need to manage their own infrastructure uh and they're behaving in a pattern which is consistent with the large financial institutions that is terminal. There's no way that you can compete against a 100 per cent player when you're at 2 per cent. So I think that they need to shift a lot more to how do I empower myself and how do I embrace the fact that I don't have the impediments that the large players do? And consume as many services I can on demand. I look at what the RTR will deliver, RTR API 3.7, the three fraud capabilities that are going to be available at launch. That's a great example of being able to have payment services at scale on a modular basis so that certain elements of the competitive dynamic are leveled. And reducing fraud benefits large institutions as much as it benefits small institutions. So I think we need to aggressively work at that in general but I think the financial institutions on the small side need to embrace the change and I think their providers need to make it considerably easier to consume everything on demand, payments as a platform.

J.D. Penner:
Yeah, I think that we'll leave that on that note. That's a perfect ending to our wonderful panel discussion. 

Elizabeth (Liz) Dempsey:
That is a wrap on another episode of The SUMMIT Summer Series.

We want to extend our sincere thanks to our moderator, J.D. Penner, and our panel of experts - Jude Leclerc, Dougal Middleton, Steve Miller and Todd Roberts - for sharing their payment expertise with us.

If you enjoyed this episode, please subscribe to The PayPod on your favourite podcast app.

And be sure to tune in next week when we’ll have another insightful discussion from The 2026 SUMMIT.

And finally, if you’re just joining us, please check out our other episodes from The SUMMIT Summer Series. There have been so many great conversations so far.

I am your host, Liz Dempsey. Thank you for listening to The PayPod.

We’ll see you next week.