1. Investing in fraud prevention will increase customer loyalty. A fraud solution must enable innovation, protect the consumer and ensure compliance. With the world moving to real-time payments, real-time fraud is inevitable. A fully integrated real-time fraud prevention and payment solution will enable you to minimize the impact on the customer, reduce and control fraud losses and protect the reputation of your bank. Westpac New Zealand is doing an amazing job in this respect. I would encourage you to watch this short video to understand how they are using artificial intelligence and machine learning to combat real-time fraud.
2. Real-time payments are here. The Clearing House has signed up 26 banks, Zelle is gaining 100,000 customers per day and processed $75 billion in 2017. Banks, even in the US, need to stay competitive in this rapidly changing marketplace. We often get asked many questions at ACI such as:
a. What is the business case for real-time payments?
b. What’s the difference in a strategic implementation vs. a tactical implementation?
c. What are the value enhancing services that banks can offer corporates?
What this demonstrates is that there is a tremendous amount of investment taking place at banks in the US, and as the data from Ovum indicates, across the world too. According to the aforementioned Global Payment Insight Series, real-time payments is viewed by banks with optimism and an important revenue opportunity. The quantitative data suggests a consensus that real-time will produce new revenue streams, but banks are struggling to put the services in place to capture this opportunity, as the qualitative questions we are asked show. We recently released a paper discussing how banks can realize the value of real-time payments. It can be downloaded here.
3. Open APIs will re-shape the payments value chain. Interestingly, respondents’ actions in terms of APIs was dependent upon their geographic location. For instance, the insights show that banks in markets like the UK, where Open APIs are being regulated, are moving aggressively. In markets like the US, the banks are taking a “wait and see” approach.
Most recently, the big news saw Coinbase strike a relationship with Barclays. Coinbase was granted a money license by the Financial Conduct Authority in the UK. They are now part of the Faster Payments Scheme thanks to their link up with Barclays, which will allow for fast settlement of digital currencies with UK-based customers.
4. New Payment Types & Services. It seems like every day I see a new story about a payment method or service that consumers can now access. The question I often pose to banks is how long would it take to have your current technology do the following:
a. Accept the new payment from the point of entry?
b. Process the payment and authorize a transaction?
c. Update your fraud rules for the new payment type?
Sadly, the answer I often get is a blank expression or “many months.” This does not need to be the case. Westpac New Zealand reduced their development window from 18 months to 2 weeks. They are not just an agile technology organization, but a much more agile business. New products can be introduced into the marketplace much faster than their competition and they can be iteratively improved.
So future proofing your technology, to me, means improving your customer experience and enabling the business to win market share and continue to grow. It’s not a just a technology conversation, but technology can be used as a catalyst to improve the business.
ACI Low Value Real-Time Payments 
