Much of the complexity in making progress in cross-border payments arises from the significant number of stakeholders in the public and private sector. The building blocks under this Focus Area are intended to drive meaningful, coordinated change at a global level over a sustained period. This will address frictions where complex regulatory, political and operational issues are prevalent. It will also provide the foundations to deliver interdependent building blocks in other focus areas. To date, much focus on removing frictions in cross-border payments has centred on technology and operations. But divergent regulation, legislation, supervision and oversight frameworks across jurisdictions, or overlaps and underlaps in frameworks, can reduce any benefits of such initiatives. The building blocks in Focus Area B are intended to foster greater coordination by advancing consistent international rules and standards. And this covers not just regulation of firms, or infrastructure providers but broader compliance and Anti-money laundering type issues too. That does not mean everything will end up being identical, but rather it seeks to promote greater consistency in rules and standards. The building blocks in Focus Area C are targeted at improving the existing payment infrastructures and arrangements to support the requirements of the market. This is at the heart of what we, as central banks, are doing. Addressing technical and operational restrictions rooted in the design of both international and domestic systems can tackle the key frictions underlying the challenges in cross-border payments, including different operating hours, access criteria and long transaction chains.
The agenda for this conference – covering topics such as cyber security, artificial intelligence and digital currencies - gives an insight into the scale and pace of innovative thinking currently taking place in the payments industry. Innovation is at the heart of the topic I will be focusing on today – cross-border payments. I will cover why greater innovation is needed in cross-border payments and outline the G20 initiative to develop a roadmap for action. I will then seek to bring it to life by outlining some of the key developments already underway at the Bank of England to support the international agenda in this area. Cross-border payments lag behind  Over the last decade or so, there has been a strong focus on further enhancing domestic payments with a significant increase in instant payments and great innovation at the customer-facing end. Just consider our ability to pay for goods and services not just with cards and phones but also with watches and smart speakers. There is also a move to enhance the core underlying infrastructure. In the UK, the Bank of England is renewing its Real Time Gross Settlement Service and Pay.UK is developing a New Payments Architecture for retail payments. Many other countries are undergoing similar transformations, including the US with FedNow and Australia’s New Payments Platform. Traditionally, however, there has been less focus on cross-border payments even though they are so significant in both value and volume.