By André Casterman, Chief Marketing Officer at INTIX, the data management fintech.
Big Data technologies help financial institutions address Corporate client expectations for increased tracking of cross-border payments whilst relying on existing back-office applications and correspondent banking practices.
Payment instruments have evolved but mainly at domestic level
Payments bankers are under pressure to deliver drastically improved payment services and experiences to their corporate clients. This follows positive developments such as mobile payments on the retail side.
In the cross-border payments space, initial improvements started a decade ago with the Single Euro Payments Area (SEPA) which brought harmonisation of payment instruments across the European geography. SEPA is an example of an industry-wide effort that profoundly transformed payment practices, albeit only at regional level. Since then, the industry focused on further improving the client experience and rolled out new real-time payment schemes, mainly at domestic level (e.g., UK faster payments) and soon at regional level (e.g., EBA instant payments).
The cross-border payments market is however much harder to transform than domestic ones. The higher number of counter parties involved in cross-border payments as well as the multiple jurisdictions and the absence of regulatory alignment make it a harder nut to crack. Improvements on cross-border payments are therefore often proposed in terms of increased predictability and visibility on end-to-end processes, rather than a full revamp of established practices.
If you can’t accelerate it, track it
Rather than re-inventing completely cross-border payment processing, bankers have focused efforts on increasing visibility and control on those T+x days clearing and settlement cycles – where x ranges from a few of days to an infinite number as some payments never reach the intended beneficiaries.
Tracking payments from start to finish and delivering increased predictability to clients adds to the client experience, yet it does not offer the real-time capabilities of domestic schemes. SWIFTgpi is the industry response to the much needed modernisation of correspondent banking practices which are the main railways for cross-border payments processing.
In order to deliver on such incremental improvements, banks have increased their investment in payment tracking capabilities. Bringing end-to-end visibility on payment processing at every step of the journey is now seen as a must, before being able to extend the real-time experience from domestic to international level.
Challenge is however to respond to such client expectations with minimum impact and cost on banks’ internal IT infrastructure.
Big Data technologies help track payments and match client expectations
Big Data technologies help banks address the needs from all stakeholders: (1) banks’ clients want more predictable payment processing, SLAs and access to continuous tracking notifications; (2) operations teams need real-time monitoring of internal processing information for preventing processing failures and (3) business teams want intelligible analytics on client behaviours and use of liquidity.
Big Data technologies offer the required capabilities to achieve those goals whilst adapting to the legacy environment. Delivering end-to-end monitoring and control on transactions being processed by various internal systems is achieved using similar Big Data technologies as those required for advanced regulatory reporting and business analytics.
Figure 1 shows how Big Data technologies – as offered by INTIX – used with a financial institution help implement industry initiatives such as SWIFTgpi.
Figure 1. Big Data technologies help financial institutions implement SWIFTgpi to track cross-border payments
Big Data technologies help bankers increase the level of real-time experience expected by their clients with no need to revamp back-office applications. In addition to delivering an attractive Return on Investment (RoI) on the Big Data investment itself, such approach also helps bankers increase their RoI on legacy back-office applications which remain critical as processing systems and data sources. No need to replace them when you can complement them.
INTIX makes it happen
INTIX help financial institutions improve their clients’ experience with cross-border payments. The use of INTIX Big Data technologies easily extends from archiving, searching, reporting and analytics to tracking, alerting, … as shown on Figure 2.
By leveraging INTIX Big Data technology, financial institutions increase the Return on Investment on their internal systems and utilise transaction data to address emerging client requirements.
Contact us to discover how to work with a FinTech without taking risk whilst getting immediate benefits. Email us at firstname.lastname@example.org or visit our web site www.intix.eu.