Demand for faster payments on the rise
Financial institutions, government organisations, and providers like Fiserv find ways to set up innovative solutions for faster payment infrastructures.
In our personal and professional activities, we want speed, ease and convenience in all that we do. Our expectations are accelerating in most areas of our lives. The rapid advancement of digital tools like mobile phones, tablets, and wearable devices bring new and innovative experiences to how we interact with the world. Financial services are no exception. People and businesses want their money to move at the speed of thought - when and where they need it.
Fueled by 24/7 digital capabilities, the demand for faster payments continues to accelerate. Global payment infrastructures are moving toward faster payments and real-time settlement. To facilitate this faster payment infrastructure, financial institutions, government organisations, and technology providers like Fiserv are creating industry-wide “rails” that allow for financial institutions to set up innovative solutions for customers.
For example, the National Payments Platform (NPP) is currently under development in Australia with Fiserv building the addressing services. This will provide the capability to transact a payment within only a few seconds. The impact of this will bring a great deal of benefit to consumers and businesses. Small and medium enterprises (SMEs) will be able to receive payments from their customers and in turn, immediately pay their employees for their daily work. This is an enormous difference from the present reality of small businesses often working in arrears as they wait to collect and process payments for services. With a faster payment system in place, businesses can attract a greater pool of daily or casual workers and more effectively serve their customers.
Other front-end innovations will continue to develop as the faster payment rails are created. Payments are no longer a distinct step in the purchase process when instant payments happen as people think of them. If you search for an item on your mobile and want to buy it, you can often do so immediately. GPS and location-based services can enable push and pull offers with predetermined “buy” settings, including electronic coupons that can be purchased or redeemed in real time. In the UK, mobile apps such as Zapp and PayM are using the faster payment rails to allow users to pay for a plethora of goods and services. Financial institutions should be doing the same.
Security Considerations
Moving money quickly is one thing; moving it safely is another. As financial institutions continue to meet the demand for anywhere, anytime services, those in risk and fraud management specialist will need to provide security that matches the speed of those transactions. People and businesses want mobility, convenience and speed without the interference caused by out-of-date fraud protection systems raising red flags when none are necessary. Fraud detection tools that set arbitrary barriers, such as transactions above a certain amount, can often lead to false positives. The security should enhance, rather than hinder, the customer experience - such as ANZ’s recently announced Voice Biometrics step-up authentication feature - and in the near future, will be coupled with machine learning systems ensuring the heuristics always remain a step ahead.
Hybrid analytics help financial institutions achieve that balance. It’s a sophisticated technique that leverages a broader set of data from a consortium of institutions to analyse transactions in real time. The process identifies the nuances of behaviors that indicate fraud. And it does so in an operationally efficient way. Hybrid analytics establishes a layered series of checks and balances across a transaction’s lifecycle to help ensure what’s happening with a payment is consistent with previous outcomes. Strong protection often depends on monitoring the entire flow and ecosystem, as it may not be enough to target only one point of the transaction at a time.
Time is of the essence and the most precious commodity. As life’s demands continue to accumulate, our devices become smarter, our interactions become richer, and our expectations become greater, this realisation becomes more self-evident. The winners of tomorrow will ensure that everything they design and create – including financial payments – will have this truth embedded into the very fabric of that new app, that new service and most importantly, within their own mindsets so that they can execute at the speed of life.
By Robert Liong, vice president and managing director, Australia, New Zealand & Pacific Islands, Fiserv