Modernizing Payment Infrastructure: Banks Must Adapt Existing Rails, Says Temenos Exec

Temenos Business Line Director for Payments Mick Fennell recently discussed the evolution of payment systems at Sibos in Miami. Rather than focusing on entirely new technologies, he emphasized that banks should prioritize adapting their existing infrastructure to support faster, smarter payments.

The Rise of Agentic Commerce

Fennell defines agentic commerce as machine-to-machine decisioning and payment processing — where AI agents handle parts of the payment flow. He notes that these applications are already emerging in corporate and business segments, with pilot programs showing promising results. Early adopters are seeing value in automating routine payments while retaining human oversight for complex transactions.

Breaking Points in Payment Systems

The first challenges to emerge as payment systems become more automated will be infrastructure limitations — speed, capacity, and legacy systems that can’t handle event-driven processing. As payments occur at machine speeds, fraud controls and service-level rules need enhancement with features like:

  • Dynamic amount thresholds
  • Product permission enforcement
  • Real-time monitoring

Fennell categorized digital money into four types, each with unique risk/trust profiles:

  1. Central Bank Digital Currencies (CBDCs)
  2. Stablecoins
  3. Tokenized deposits
  4. Cryptocurrency

He views tokenized deposits as the most bank-native solution because they operate within existing regulatory frameworks and are technically straightforward for banks to implement. While stablecoins offer benefits like faster cross-border payments, liquidity challenges and fragmented rail systems remain barriers.

The customer’s perspective remains paramount — individuals ultimately care about cost, access speed, and transparency regardless of whether a payment uses CBDC, stablecoin, or traditional rails.

The Path Forward for Banks

Fennell predicts banks will require single interoperable platforms that bridge both traditional finance and tokenized assets. Rather than building siloed systems, institutions need to support various digital money forms while maintaining control over liquidity, trust frameworks, and custody solutions.