Let’s start with the UK which is the gold standard for real-time payments. The emphasis on consumer-centricity and the customer proposition was the key message for the packed audience from Graeme Donald from Lloyds and Craig Tillotson from UK Faster Payments.
Graeme Donald highlighted that as real-time payments services mature, likewise do customer expectations. Today, nothing less than 24 hours a day and 7 days a week real-time payments underscored by real-time banking will do.
Craig Tillotson added that more financial institutions need to have direct access to the real-time payments infrastructure, while ensuring the security of the ecosystem. The key to realizing this is a competitive layer of aggregators, who can aggregate the demand for a large number of smaller banks, as well as handle the technical complexities on behalf of these banks.
Most markets and countries implementing real-time payments programs will go through the same stages of maturity, but time scales have been drastically compressed. While earlier entrants such as the UK may have had seven years to evolve, in contrast, those considering real-time payments programs now will probably have only one to two years to launch to be relevant; and when they launch they can expect dramatic volume growth, as experienced this year in Denmark which launched at the end of 2014.
Australia is in the midst of building its New Payments Platform (NPP). Banks there believe that it is crucial to position the platform as a means to help their customers achieve their business goals.
To bring the customer experience-focus to life, Philip Joyce from Westpac highlighted three factors to differentiate one from one’s rivals: how well you understand your customers’ problems, how you differ from your rivals and how you integrate your differentiation factors into your offerings.
As tough as it is to see additional revenue from real-time payments, the business case is really about remaining relevant to customers through overlay services.
Stig Korsgaard from Nets Denmark added that the good governance in the country, coupled with strong commitment from banks, central banks and other players ensured a speedy process of implementation. It’s a one for all and all for one mentality that underscores a universal recognition of the importance to be connected.
The Danish program was also facilitated by the support made available to banks (such as onboarding and clear pass-through steps), clear division of responsibilities, and agreement to utilize existing capabilities that banks have such as web services. All of this translated into an investment experience that was manageable for all banks.
In the US, Sean Rodriguez from Federal Reserve reinforced that they have found that overlay services is extremely important to both strategy and business, so much so that while the infrastructure is key, it is nothing without the services layer. Rodriguez added that with the existence of different models, settlement and clearing of real-time payments did not necessarily need to happen at the same time.
Multi-stakeholder engagement is critical and it should cover as many relevant parties as possible – such as end users and non-bank providers.
Paolo Cederle from UniCredit advised banks to focus on local real-time payments’ implementation but to also monitor global developments in order to to facilitate future interoperability.
Cederle summed it up nicely: the defining characteristic is service and customer experience. All payments have to be faster and banks need to make bold decisions such as adopting new technologies to stay relevant and competitive.
Real-time payments were widely discussed throughout the week at Sibos and are clearly a strategic theme for the industry – feedback from the audience confirmed that this panel concisely articulated the key points and insights on the benefits and challenges of real-time payments. You can see a replay of the session at www.accenture.com/siboslive and read Accenture’s own insights by downloading our Real-Time Payments for Real-Time Banking paper, and the Executive Guide to Immediate/Real-Time Payments.