Real-time payments - a key piece of the customer experience puzzle

By : Andy Brown

October 23, 2018 12:00 PM

It has never been clearer that financial institutions can't afford to fall short on customer experience, according to research from Accenture.

 

In a recent report, titled “Back Office, It's Time to Meet the Customers,” Accenture revealed that North American banks currently view customer experience as their biggest strategic priority, ahead of fraud/risk management and reducing operating costs.

 

As financial institutions intensify their focus on achieving the highest possible customer experience standards, one goal that looks set to prove particularly important is the delivery of efficient and secure real-time payments services.

 

The role of real-time payments in customer experience

 

One of the fundamental reasons real-time payments have a critical role to play in the overall customer experience is that consumers don't want to wait hours – or even days – for what is one of the most common interactions with their financial service providers to be cleared.

 

By providing a fast, efficient and secure payments experience, financial institutions can lay a solid foundation for positive and mutually rewarding relationships with their customers.

 

For consumers, instant payments support complete understanding and control of financial affairs. The same could be said for businesses – particularly smaller firms whose long-term success could depend on their ability to manage liquidity and control cash flow.

 

Looking at real-time payments from a commercial perspective, Jim Aramanda, president and CEO of The Clearing House Association and Payments Company in the US, said the country's recently launched RTP system has the potential to "transform commerce for both consumers and businesses."

 

"Building new payments systems also provides an opportunity to build in capabilities that go beyond merely moving money," he wrote in a contributed article for Payments Source.

 

"New payments systems will allow everyday financial tasks such as paying bills, issuing invoices, making payroll or settling insurance claims to be easier, faster, safer and more efficient,”Aramanda continued. “The ability to manage cash flow down to the second will free up working capital for businesses and make life less stressful for consumers on tight budgets."

 

Be ready for the future

 

One of the most effective ways banks and credit unions can maintain high customer experience standards is to look to the future and invest in the technologies and systems required to meet their users' changing needs.

 

The nature of these investments will vary all over the world. In the US, the Federal Reserve's Faster Payments Task Force has set a target date of 2020 for real-time payments to be available to every consumer and business in the country. Financial institutions aiming to meet this target will need to have the required infrastructure and security processes in place to meet user demands and deliver a strong customer experience in the real-time environment.

 

In Europe, the long-term success of the SEPA Instant Credit Transfer scheme could depend on adoption by service providers. Businesses that get on board will give their customers the ability to make cross-border transactions within Europe in a matter of seconds.

 

There could also be big changes on the horizon in the UK, which has experienced success with its Faster Payments scheme since 2008. The embryonic Request to Pay system, for example, could give individuals or businesses the option to authorize instant direct debits from their accounts.

 

As far as acceptance and adoption are concerned, the signs from financial institutions are positive. A recent study by market research and consulting firm Ovum highlighted real-time payments as a "key driver" for a $3.3 billion increase in technology investment by North American banks.

 

In Asia, innovation by fintechs and other forward-looking businesses has contributed to significant growth in payments markets such as China.

 

With further progress in this vein, real-time payments will play an increasingly important role in driving customer experience standards and expectations in the years to come.

 

To discover additional payments insights, ideas and strategies that make your job easier, visit our new payments portal at https://www.ncr.com/financial-services/payments-transaction-processing/payments-processing-strategy.

 

Andy Brown

Marketing Director, Payments

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Andy has nearly 30 years experience in e-payment systems from the delivery and support of systems in the Far East and Europe and in the product management and marketing perspective. Based in the UK, Andy is responsible for marketing NCR payment solutions.