Advisory services: Kearney

The field of payments is one of the fastest-evolving areas of central banking. Countries around the world are looking to boost the speed and ease of payments, through instant payment platforms, mobile money and, increasingly, central bank digital currency (CBDC). A growing number of central banks have linked up their domestic payment systems to create efficient cross-border links, and global work is underway to overcome ongoing barriers to cross-border payments. Crypto assets and stablecoins have added impetus to the payments revolution.

Global management consultancy Kearney has become a key partner in this transition. The US-headquartered firm has offices in more than 40 countries, allowing it to tap into a global network of specialists and build long-term relationships with its central bank clients.

Kearney has proven adept in helping central banks and related entities to deliver large-scale payments projects, often working from the early stages of strategy development through design and execution, right up to the final launch. It is involved with payments work ranging from overhauling card schemes to instant payments and cutting-edge work on CBDC. Working with central bank clients around the world, the firm has recently partnered with institutions in the Gulf Cooperation Council (GCC) countries.

Piyush Dubey, partner at Kearney, highlights the breadth of the firm’s work, encompassing broad strategic support for central banks, such as shaping and developing a national payments modernisation agenda. “Kearney is able to drive impact for our clients not just for strategy or policy topics, but also support with execution of complex transformation programmes,” Dubey adds.

Kearney supported a GCC central bank to launch a new domestic debit card scheme. “With the client’s ambition as the guiding light, we helped them launch the scheme in rapidly compressed timelines,” says Monti Daryani, manager at Kearney.

Another major priority around the world is instant payments. Such platforms are becoming increasingly ubiquitous, with central banks now looking to add further enhancements such as allowing users to pay with QR codes or send requests to pay. Instant payment platforms also frequently form the basis for bilateral payment corridors. Asian central banks have led much of this work, creating payment links to support trade and remittance flows.

Kearney facilitated the implementation of a best-in-class instant payments platform by partnering with a GCC central bank, from strategy formulation to launch. Marcé Marx, manager at Kearney, says: “This initiative will further accelerate proliferation of digital payments.” Areg Abramyan, senior consultant at Kearney, adds: “We have been privileged to see first-hand how it can benefit residents and businesses.”

The growing use of crypto assets and stablecoins has been a wake-up call for regulators. The vast majority of central banks around the world have begun research into CBDC to keep abreast of rapid technological change. At the same time, global efforts are underway to use CBDC technology to underpin cross-border payments, notably through the Bank for International Settlements’ Innovation Hub. Project mBridge uses distributed ledger technology, a shared legal rulebook and a unique governance structure to allow multiple CBDCs to be exchanged on a single platform. 

Domestically, a handful of central banks are now moving from design to execution of both retail and wholesale variants of CBDC. Caribbean central banks were the first movers, but others are not far behind.

Kearney is currently involved with the rollout of CBDC with a leading GCC central bank. 

“Kearney is committed to supporting the clients in achieving ‘world first’ successes – from design to execution,” says Vagan Esaian, senior consultant at Kearney.

A central banker who has worked with the firm describes the Kearney team as “very agile” and “committed to what they want to achieve”. “This is very beneficial for us, having that agility – sometimes you will face challenges, and it will be necessary to go above and beyond,” the official says.

Where projects call for particular specialisms, Kearney appears to be able to bring in consultants with the right skills from its extensive global network. The central banker says the relationship has deepened over the years that consultants and the central bank have worked together.

In summary, Dubey says: “The GCC is experiencing tremendous economic and social development with central banks acting as key catalysts. The Kearney team is excited for the evolution of the financial services landscape in the region and the promising times ahead.”

The Central Banking Awards 2024 were written by Christopher Jeffery, Daniel Hinge, Dan Hardie, Joasia Popowicz, Ben Margulies, Riley Steward, Jimmy Choi and Blake Evans-Pritchard.