First Data Joins Silicon Valley Bank In Fintech Accelerator
#Silicon #Valley #Bank and #First #Data look for #fintech companies with Series A funding for their virtual #accelerator program.
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In Digital Transformation Top Banks Are Leading
The top three or top five #banks are #leading the way in #digital #transformation while smaller institutions are hampered by slow-moving tech vendors. Accenture sees the goal as reconfiguring the back office to interact directly with customers, re-casting or combining the roles of CIOs and COOs.
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Same-day ACH vs. real-time payments: What banks need to know
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.
Figure 1. Comparing Real-Time Payments and Same-Day ACH
Source: TCH and FIS Proposal to the Faster Payments Task Force 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.
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Digital Banking? Look To Asia And Africa For Leaders
The pace of change in Asian #banking #technology is startling. Some of the #leaders — Ant Financial and Tencent — are entering the American marketing, catering to Chinese visitors and students, at least to start.
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IFC and VCs Want To Take Emerging Market Microfinance To Mobile
More #fintech firms in developing economies could expand financial services such as credit and trade finance to small businesses which can’t access traditional #banks. But first the fintech firms themselves need financing.
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Understanding MiFID II’s 30,000 Pages Of Regulation Requires RegTech
Financial regulations are streaming forth faster than mere humans can read and interpret them. Regulators need to employ tech to create machine-readable standards — FCA is leading the way — while users and fintechs need to work with regulators to develop standards.
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A summary of the new Open API framework in Hong Kong, and how it compares with PSD2
Today, #Open Banking is gaining traction globally, through a combination of #banks’ internal efforts, market initiatives, and regulations like the EU’s #PSD2 and the UK’s CMA Open Banking. Now #Hong #Kong has also gotten on board, with the Hong Kong Monetary Authority (HKMA)’s launch of its draft Open API #framework.
Publication of the framework on January 11, 2018 marked the start of a public consultation that will run until March 15, 2018. Responses will feed into a final version that will be binding for the territory’s largest retail banks, although other banks will be able to join in the future.
So, what are the highlights of the HKMA’s Open API framework? It includes the following goals:
- Increase the competitiveness of Hong Kong’s banking sector.
- Generate opportunities to reach out to untapped markets through better customer experience.
- Define Open API use cases and deployment timeframes.
- Recommend Open API technical standards.
- Recommend Open API facilitation measures.
One of the most interesting aspects of the HKMA’s framework is the splitting of use cases into four phases with different product categories and timelines:
Phase 1
Product and Service Information: Third-Party Providers (TPP)’s access to banks’ products information, which is frequently used by customers on a ‘read-only’ basis and thus helping financial product comparison sites. Banks will be expected to implement these APIs within six months of the framework’s finalization.
Phase 2
Customer Acquisition/New Applications: Customer acquisition via TPPs and through online applications for credit cards, loans and some insurance products. Banks will be expected to implement this within twelve months of finalization.
Phase 3
Account Information: Retrieval of both stand-alone and aggregated account information. It would help TPP services that aggregate multiple accounts or perform analytics to gain customer insights. The timeline for this phase will be discussed later between HKMA and the banks.
Phase 4
Transaction Processing: Enabling TPPs to communicate customers’ payment instructions to banks. Again, the timeline will be discussed later between HKMA and the banks.
Comparing the HKMA’s framework with the Regulatory Technical Standards (RTS) for strong customer authentication (SCA) under PSD2, one of the biggest differences is that the HKMA’s draft is a mixture of a regulatory paper with some initial timelines, recommendations on specific protocols and data formats, and high-level specifications for each product category. PSD2 is #technology-agnostic and does not define any API standards, with other initiatives like Berlin Group and STET stepping in to fill this gap.
Other differences between HKMA and PSD2:
Click to view larger While HKMA Open API was inspired by Open Banking and PSD2, its approach is visionary—and in many ways, unique. It remains clear that a single API standard is vital for any economy to attract global innovation and avoid fragmentation. This is a lesson that HKMA is well-placed to take on board.
Click to view larger *6 months (Phase 1) and 12 months (Phase 2) after release of the Open API
**To be reviewed by HKMA and banks for a Phase 3 and 4 timeline
My thanks to Hakan Eroglu for his research and analysis for this blog.
The post A summary of the new Open API framework in Hong Kong, and how it compares with PSD2 appeared first on Accenture Banking Blog.
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Alexa! Move Over. Smart Turret Tech Understands Trading
IPC, the #turret company, and GreenKey Technologies which does advanced speech recognition, have designed #trading #tech that works on voice.
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Aegon Leaves Legacy Behind With Ohpen’s Cloud Finserv Platform
Paradigm shift — #Aegon is using Ohpen to create an integrated #platform where customers can see and work with multiple accounts through a single #cloud-based platform running on AWS.
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Toyota Finance Uses Advanced Analytics To Improve Sales And Profits
#Toyota trucks are hot but sedans may need some help from incentives — the #analytics team at Southeast Toyota #Finance is on the case.
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