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Speed of Payments Is Key Consideration as Digital Banking’s Roots Deepen







It would not be a stretch to say the pandemic has been a “forced experiment” of sorts into how we’ll continue to adopt technology into a range of financial services, for individuals and enterprises alike.

FISPAN Head of Product Strategy Matt Naish told PYMNTS that with the digital age firmly upon us, and pandemic concerns ebbing a bit, we have entered a phase where lenders can see which behaviors will be most firmly entrenched — and which will require additional thinking from financial institutions (FIs) in terms of how these changes will mesh with existing consumer-facing and commercial banking strategies.

The conversation came against a backdrop in which 84% of banking customers plan to keep the same level of digital banking after the pandemic subsides. Keeping that level of digitization has symmetric benefits on both sides of the banking relationship for FIs and consumers alike, Naish said.

Those benefits for the bank revolve around time savings, efficiency, record keeping improvements and risk mitigation. For the customer, FIs have the advantage of being able to “meet” clients when and where clients want — whether that’s at a certain time of day or with services that are well-integrated into their daily lives and business processes.

With the pandemic fading at least a bit into the background, the financial services industry now can look out over the mid- and long-term horizon, he said.

One overarching theme that reverberates as we navigate through the current inflationary environment is that at least some stakeholders will want to get their money faster, which in turn translates into better cash flow management. However, the desire for faster payments — for example, real-time payments — depends on the use case.

Speed Matters (Sometimes)

“There are payments that absolutely and critically need to get there right away, and then there are others where it is OK to take a few days or even over a week,” he said.

But all manner of corporate decision makers see real-time payments as a key component of their overall payments mix, which indicates a desire to be ready in the event that demand for real-time payments widens, he said.

Naish said that to get there and meet the changes within consumer and corporate banking, application programming interfaces (APIs) offer a way for FIs to embrace any number of strategies, “no matter if that strategy is to accept, to extend or compete.”

In those respective cases, companies can watch to see how new trends develop. An extension includes FIs partnering with industry leaders to deliver best-in-breed solutions, and the push to compete is one where FIs might endeavor to create new options in-house and then go to market.

“No matter if the FI is choosing to extend or compete, the foundational building block will be the API,” he said.

Building a solid base of APIs now allows FIs to meet customer needs in the here and now, while also laying the foundation to meet the demands and opportunities yet to come.

APIs and advanced technologies also enable the digitization and streamlining of front- and back-end functions, allowing humans to do more of what they do well, he said. On the consumer-facing activities, that can mean eliminating the need for in-person, wet signatures as documents can be signed digitally. On the back end, that could mean automating compliance and regulatory processes.

“Overall, the humans can be left to tackle the value-added activities, like relationship building and providing advice, not processing paperwork that should be easily handled by digitization,” Naish told PYMNTS.



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