If you have the business idea and you want to grow it, there are several ways that you can adopt. Maybe your friends and family are able to lend support financially or you can go for some other option as well. Surely a bank cannot help you because your loan is a #small amount. There […]
Bank Innovation
2017 was a big year for ACH #payments. It saw implementation of both the Clearing House’s Real-Time Payments (RTP) system and Phase 2 of NACHA’s Same-Day ACH (SDA) payments initiative. These developments accelerate settlement of ACH transactions, creating new payment product opportunities for financial institutions (FIs) and prompting them to reevaluate their current payment products. Although the RTP system and the SDA initiative perform many of the same functions (Figure 1), there are significant differences between them that FIs will #need to #know in considering their use.
The Clearing House launched its RTP system in November 2017. Using Vocalink’s infrastructure, the RTP system enables FIs to complete clearing and settlement within five seconds.1 In its proposal to the Faster Payments task force, the Clearing House highlighted the system’s ability to support the complete payment cycle, including transmission of bills, invoices, and payment confirmations as a differentiator. To participate in the service, FIs are required to connect to a new ACH core system, which requires development and integration with all channels, including online and mobile. Integration also involves changes to operations, such as customer service and back office support, to respond to messages 24/7 and perform applicable fraud and AML screening. To lower implementation costs, the Clearing House has partnered with a variety of #technology providers, including FIS, D+H, and Jack Henry and Associates, to streamline the integration of FI’s systems to the RTP core infrastructure. However, cost and operational support changes remain a consideration.
With the second phase of SDA payments complete, all FIs are now required to receive same-day credits and debit payments. Although SDA’s features differ from that of the new RTP system, (for example, SDA offers no bill/invoice transmission, instant settlement, and confirmation of payment), implementation of SDA requires less effort and is less expensive, since issuers do not need to connect to a new ACH core system. SDA also offers FIs the ability to support direct debits commonly used for one-time and recurring consumer bill payment transactions; RTP supports “requests for payment,” but does not support direct debit transactions.
Despite the first-mover advantage SDA has in faster payments, NACHA’s reported volume for SDA credits in 2017 was not substantial. There were only 56.8 million SDA credits2 (less than one percent of all ACH credit volume) during 2017 (its first full year after implementation).3 In contrast, the Clearing House projects that RTP will process close to 1 billion transactions within the first year after implementation, reach ubiquity in 2020, and by 2023 the system’s transaction volume will reach 8 billion (close to 30 percent of projected ACH volume).4 Looking at the mix of SDA credit and debit volume for the fourth quarter of 2017 (after SDA debits became available), however, 46 percent of NACHA’s SDA transactions were direct debits5; this may signal that same-day debits will be a significant differentiating factor between SDA payments and RTP.
While both services are still nascent, they have significant potential to change the way FIs and their customers think about ACH payments and the role ACH plays in the digital economy. With a comprehensive review of their product portfolio, FIs can clarify how faster ACH payments can meet the needs of their customers and identify products that will benefit the most from reduced settlement and clearing processing time. FIs should evaluate the functional and implementation differences between the RTP system and SDA payments, and consider how each of the new offerings would affect their unique operational setup. They should also evaluate how RTP and SDA would affect their existing product offerings (such as payment cards) and determine the optimal product suite to bring to market.
Discover more on immediate or real-time payments systems and infrastructures in our report, Real-Time Payments For Real-Time Banking: How banks can seize the full opportunities of immediate payments
1Faster Payments Task Force, Faster Payments Solution Proposal by the Clearing House and FIS, clearing and settlement time page 12
2NACHA, Infographic 2017 Same Day ACH Volume, Credit Volume
3NACHA, 2017 Quarterly Network Statistics, 2017 Total Network Volume
4Faster Payments Task Force, Faster Payments Solution Proposal by the Clearing House and FIS, TCH RTP Transaction Volumes (projected)
5NACHA, Infographic: 2017 Same Day ACH Volume, 4Q Same Day ACH volume
The post Same-day ACH vs. real-time payments: What banks need to know appeared first on Accenture Banking Blog.
EXCLUSIVE – After more than two years of planning, #Payments Services Directive II or #PSD2 finally arrived in Europe on Saturday. The #regulation has been dubbed as one of the more substantial regulatory changes of its kind in Europe. While many traditional #banks and FIs might not be thrilled #about having to open their APIs […]
Bank Innovation
Sure, #cryptocurrency and #bitcoin might seem like the talk of the town, but a recent survey found that #most #people #don’t even #know what a digital currency is. According to a survey conducted by cryptocurrency platform COBINHOOD, only 56% of the 1,035 Americans surveyed knew that cryptocurrency is a digital decentralized currency designed as a […]
Bank Innovation
Who said regulators can’t be innovative? The #Office of the Comptroller of the Currency (OCC) announced its Office of #Innovation will host Office #Hours for financial institutions and fintechs, to be held from July 24 to 26, at the #OCC’s district office in New York City. Companies can request a slot by July 5. The OCC held its […]
Bank Innovation
“Where is my money going?!” is a common enough shopping refrain, but #consumers might be doing more than lamenting bad #spending habits. According to “socially conscious” bank #Aspiration, consumers are legitimately asking where #their money is going—that’s why the startup launched its new Aspiration #Impact Measurement (AIM) feature earlier this morning. The feature, live today and offered […]
Bank Innovation
In this blog series about anti-money #laundering programs and #know your #customer initiatives (AML/KYC), we’ve explored the challenges and associated regulatory requirements that come with these efforts. We’ve also taken a deep dive into how financial firms can manage these programs, whether via home-grown #talent, explored in our paper, Leveraging enhanced talent development programs to increase anti-money laundering workforce effectiveness, or via a managed services effort or even robotic process automation (RPA), as described in our paper, Anti-money laundering and know your customer programs: sustainability through managed services, and its corresponding presentation.
We have noted that many options are available, and that financial firms might often benefit from a mix of approaches. We’ve even looked at some of the factors that can help a financial business decide on the right approach.
The next step on this journey, then, is getting ready.
If your aim is to build talent in-house, you can adopt a few strategies to get your AML efforts up and running:
If you are aiming toward a managed services AML/KYC model, these are the basic steps:
Finally, if you’re aiming for an approach involving RPA, some of your steps will be similar to those for managed services. You’ll want to:
These are only some of the steps you’ll want to take, and if your business is like many, you may well be combining several approaches in your comprehensive plan.
Managing your AML/KYC workforce talent can be challenging, but help is available. As we’ve seen over the course of this series, a powerful #solution is within your reach.
The post Paving the way for a new anti-money laundering and know your customer talent solution appeared first on Accenture Banking Blog.
In this series, we’ve looked at new challenges financial firms face with regard to anti-money #laundering and #know your #customer regulations (AML/KYC). Our paper, Anti-money laundering and know your customer programs: Sustainability through managed services, and the companion SlideShare consider the various challenges facing firms. We hone in on workforce challenges, in particular, in Leveraging enhanced talent development programs to increase anti-money laundering workforce effectiveness.
There’s good news! In this series we’ve explored several options and alternatives for building a strong AML/KYC program and workforce, whether using home-grown talent, managed services or virtual help.
The question, though, is: How can an enterprise choose the #best, most appropriate solution for the set of concerns it faces? Should a particular process be handled by robotic process automation (RPA), a managed services team or an internal resource?
Continue reading the post What’s the best anti-money laundering and know your customer approach for your business? on Accenture Banking Blog.
In my last post, we talked about the need for alternate options for some financial enterprises when it comes to cultivating AML/KYC talent. Accenture has taken an in-depth look at #talent solutions for anti-money #laundering and #know your #customer (AML/KYC) in our paper, Leveraging enhanced talent development programs to increase anti-money laundering workforce effectiveness.
We’ve also explored the broader #concerns around AML/KYC compliance in our paper, Anti-money laundering and know your customer programs: Sustainability through managed services, and the accompanying presentation.
Talent development for AML/KYC is a specific concern, and one not easily solved for many financial firms. Fatigue and turnover are high, hiring is challenging in a saturated market, and learning programs may not have kept pace with current industry and regulatory trends.
So what alternatives are available to firms for meeting KYC/AML requirements?
Here, a three-pronged approach might work. Step one is to establish a formal learning program, positioning AML/KYC as a function in which the business can invest. Next, the programs themselves may best be designed to offer role-based training, aligned to the business’s competency models and complete with certification requirements. Finally, the program could include blended learning approaches, and include ongoing reinforcement techniques.
These steps can help create a robust AML/KYC workforce over time.
For those organizations that choose migrating to a managed services model to handle AML/KYC, many benefits can be had. Why? Some businesses might find their current model is built on inefficient or manual processes. Sustaining these at the higher level needed to support new AML/KYC work might not be feasible, and upgrading the old model might not be an option either. Then there’s the flip side. For some institutions, finding the right resources to support an existing model that is updated to include AML/KYC may be a challenge.
By contrast, a managed services approach brings reduced costs, better access to the right skill set, global capabilities, scalability and improved quality throughout the AML/KYC program. For many, this option is worth considering.
There’s one more step down this journey: Adding robots or, in essence, using #technology to automate processes otherwise done by humans. Robotic process automation (RPA) offers advantages that humans can’t: It gets the job done, and also records and remembers the details of the job, bringing more data into the picture.
The idea of RPA is not new and it isn’t entirely unexpected either; our supporting presentation on the topic notes that 84 percent of banking executives surveyed by Accenture anticipate having to “train” their machines as much as they train their people in the future.[1] RPA brings even more dynamic capabilities than managed services, handling higher demand as easily as it knocks off lighter loads. Robotic processes can take place on a 24/7 basis, too.
View the presentation
Combing through the AML/KYC effort, financial firms may identify sub-processes or elements suitable to RPA, such as highly manual, high-volume efforts where the potential for error is high. These pieces might be prime candidates for RPA.
With all these #options available to financial firms, how can each enterprise go about choosing the approach that is right for them? If a combined approach makes sense, what pieces should be combined, and how?
My next blog will take a look at how firms can choose the best approach for their AML/KYC model.
[1] Accenture Technology Vision 2015 Survey
The post Tackling anti-money laundering and know your customer talent concerns? You’ve got options. appeared first on Accenture Banking Blog.
Last week, Amazon’s digital assistant, Alexa, hit the 10,000 #skills milestone. The top 5 categories of skills, in descending order were: News, Gaming, Education/Reference, Lifestyle and Novelty/Humor. The Business & Finance category logged in only 190 skills as of this morning (less than 2% of the total). Most of those skills are for reference purposes, like […]
Bank Innovation
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