StoneX – modernising African payment systems

StoneX is working with institutions to modernise the continent’s payments systems. Beatrice Pechtl – StoneX head of Correspondent Banking, EMEA, and David Unsdorfer – Senior VP, StoneX Technology Services, EMEA & APAC, answer our questions about the business and its relationship with Africa.


Image : Pushish Image/

StoneX Inc., founded in the US, is a NASDAQ-listed global financial services network that connects companies, organisations, traders and investors to the global markets ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services.

It currently serves more than 32,000 commercial, institutional
and payments clients, and more than 330,000 active retail accounts across 180 countries. With intra-African trade set to boom as a result of the AfCFTA, StoneX is working with institutions to modernise the continent’s transactions.

Beatrice Pechtl – StoneX head of Correspondent Banking, EMEA, and David Unsdorfer – Senior VP, StoneX Technology Services, EMEA & APAC, answer our questions about the business.

Beatrice Pechtl
Beatrice Pechtl – StoneX head of Correspondent Banking, EMEA.

StoneX’s Global Payments Division specialises in transferring funds to frontier markets around the world. Can you tell us more about this business and your relationship with Africa?  

Beatrice Pechtl: StoneX’s Global Payments Division commenced in the late 1980s, initially servicing our NGO client base, who needed to transfer funds into the emerging markets around the world. At that time, funds sent to the African continent via the traditional correspondent banking system were almost exclusively in USD, had no traceability and there was little view on what fees and exchange rates would be applied to those payments.

Our vision was to improve this experience by offering clients a guaranteed settlement date, a guaranteed amount of local currency and an upfront exchange rate that was inclusive of fees. To make this work, StoneX set up its own network of partner banks across the continent, usually two or three banks per country, whom we could rely on to deliver funds in the local markets on behalf of our clients.

Can you tell us about your history in terms of correspondent banking and how you see things evolving? 

Beatrice Pechtl: After the financial crisis of 2008, and the toughening of Anti Money Laundering (AML) / compliance regulations, most correspondent banks decided to exit markets deemed too complicated or difficult to service – especially those which were not generating sufficient revenues. In some African countries, this has had a real impact for the local banks and their clients. 

The 2008 global financial crisis actually represented an opportunity for StoneX to widen our service offering to traditional financial institutions that had left the continent, but had a continuing need to support their own corporate clients with their cross-border payments needs.

Today, StoneX’s correspondent banking network in Africa spans 160 banking relationships across the continent, and our business has also grown to serve many of the world’s largest banks, in addition to a wide variety of multinationals and corporates across numerous different industries and sectors. 

Cross-border payments have changed massively since the 1980s. What do you consider the biggest challenges in 2021?

Beatrice Pechtl: From a business point of view, we are witnessing a significant increase in payment volumes, with customers now sending lower value payments more and more frequently. 

We are also seeing increased client demand for transparency and traceability, with customers seeking to track their payments in real-time in much the same way as they do their online shopping. The roll-out of SWIFT global payments innovation (gpi) has been instrumental here, and StoneX is very proud to be amongst the first non-banking institutions globally to join SWIFT’s gpi programme, and to actively collaborate with SWIFT on extending gpi capabilities into the frontier markets together with our correspondent banks.

With regards to Africa, in my opinion one of the biggest challenges remains cross-border payments within the continent. It is an incredibly complicated matter and unfortunately the need for a US or European bank to be involved is still predominant. This will change with AfCFTA but there is an urgent need to modernise and reach consensus on a regulatory environment between African countries. We need to see more investment made in a global financial market infrastructure.

How can banks adapt to the faster pace of transactions brought about by modern technology?

David Unsdorfer
David Unsdorfer – Senior VP, StoneX Technology Services, EMEA & APAC.

David Unsdorfer: Advances in technology and the explosive adoption of mobile and tablet technology have led to huge increases in global trade, and as such have led to massively increased volumes of cross-border payments. 

They have also fundamentally altered customer expectations, demonstrated by increased demand for easy-to-use products, real-time services, automation, and straight-through-processing.

The overarching challenge here is responding to these new client demands and implementing robust and dependable systems and processes to support them. Given that many customers still operate legacy infrastructure that cannot directly support digital services, this is a complex problem, with many turning to middleware platforms that are capable of bridging this gap. 

This digital transformation agenda has been massively accelerated due to the Covid-19 pandemic. As a matter of personal observation, organisations with robust digital services and automated operational processes in place fared much better than those without, and in particular organisations that relied heavily on manual-based operations were caught out in line with office restrictions and remote working. 

At the same time, regulatory directives on consumer protection and prudential security, and increasingly complex cyber threats, must continually be monitored and managed in order to keep customers safe and secure. 

We’ve seen the rise of many fintechs in Africa. How are they disrupting the financial landscape and what role do you see them continuing to play here?

Beatrice Pechtl: Yes indeed, and in fact many African fintechs are leading the way here and have revolutionised the way we make payments today, particularly mobile payments. 

However, when it comes to more ‘traditional’ cross-border payments such as in the B2B space, we are yet to see a real disruption. Those payments are still being processed via SWIFT by and large, and many recipients’ banks still struggle with the processing. 

The manual element is still very much present in many countries, although some have excelled in automating their payment infrastructure, such as Kenya or Nigeria. Unfortunately however, in most cases responsibility seems to come down to one or a group of specific banks within a country to lead the effort, whereas it should perhaps be led at country-level instead.

David Unsdorfer: So, whilst fintechs have come to market with hugely popular, state-of-the-art apps and incredible front-end channels, the back end has remained largely the same for many years and modernising this back end remains a complex problem requiring global cooperation. 

How do you think companies operating in the payments industry can leverage your technology? 

David Unsdorfer: In the digital age, an organisation will only ever be as operationally efficient as its IT infrastructure allows it to be. Meeting the needs of fast, accurate and secure cross-border payments requires global cooperation, infrastructure modernisation and standardisation. 

StoneX, as a certified SWIFT Service Bureau, is working closely with our correspondent banking partners, increasing awareness and understanding of this important new development, as well as offering our professional project management services for those who would like our assistance. 

On legacy infrastructure replacement and modernisation, there is certainly no one-size-fits-all approach, and the ‘correct’ approach is very dependent on the particular circumstances of each organisation. 

From our point of view, many of our customers and partners are pursuing an iterative modernisation strategy. This approach avoids the risks associated with a big-bang project, under which the entire core is replaced in one go, and also enjoys the benefits of leveraging digital and real-time services quickly, securely, and safely. 

Application interoperability is the key to success here. StoneX has developed its own proprietary, cloud-based middleware platform which our customers are leveraging as a tool to automate their own workflows, remove or eliminate operational friction points and consume real-time digital services.

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