In a new white paper, leading global payments technology firm RS2 outline the risks presented by instant payments – and what banks can do to manage these risks, and optimize the delivery of instant services to their customers.
In an earlier blog RS2 outlined how the risks associated with instant payments include new types of fraud, coping with the sheer volume and speed of transactions and making sure that cash is available to manage settlement 24 hours a day, seven days a week, every day of the year.
However, RS2’s new white paper reveals the challenges associated with instant payments don’t stop with transaction processes and fraud risk.
Foreign exchange (ForEx) costs via card networks can be expensive, and many banks currently have a sub-optimal understanding of how ForEx works, with low transparency about costs and inefficient processes frequently cited as problems by banks.
Bank treasury functions will also require complete upgrades, since banks are no longer dealing with overnight or longer settlement periods, but the requirement to transact and settle within two to three hours.
Finally, regulation and reporting will be transformed, as banks need access to transaction information within seconds.
In cross-border environments, banks will also have to cope with the regulatory requirements of a wide range of national governments and international organisations, further increasing the burden on them.
“The longer banks wait, the higher the cost of replacing legacy tech.”
These problems are not going to go away: indeed, there is significant evidence that the longer banks wait to resolve tech infrastructure problems, the more expensive and complex such problems will be.
And with McKinsey and Co estimating[1] that leading banks spend 70% of their tech budgets on maintaining legacy systems, these could end up being huge numbers.
The answer: a single global platform for instant success.
In response to these challenges, RS2 has developed BankWORKS: a single global platform that provides an end-to-end overview of the entire payment chain and is optimized to meet the challenges of an instant future, whether in terms of fraud management, ForEx risk, handling large volumes of transactions securely, or managing a wide range of payment types.
BankWORKS enables bank clients to receive funds instantly, ensuring that they have better control over their finances and can manage their liquidity more effectively.
The system also reduces clearing times, a particular benefit for businesses that relying on quick turnovers.
Thanks to a fully-orchestrated, automated approach with a single global overview, BankWORKS lets clients streamline their operations, reduce the backlog of pending transactions and improve overall efficiency.
Because manual intervention and processing delays are reduced, banks will find their overall operational costs are lower.
Finally, BankWorks helps banks to manage liquidity by monitoring transaction flows. This enables banks to adjust their reserve requirements to ensure that there are always enough funds to cover instant transfers.
Find out more about BankWORKS® from RS2 – read our new white paper to see how banks can transform their payments infrastructure for success in an instant future.
[1] McKinsey & Co. “Winning in digital banking”
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