Back in 2020, the priorities for financial institutions involved responding to large compliance, regulatory and industry-driven changes such as ISO 20022, instant payments and Fintech competition, according to the 2020 annual payments survey, commissioned by Fiserv.
Now that emphasis is changing. As the 2022 annual payments survey from Fiserv shows, the focus today is on optimizing the investment made in addressing the changes above, functioning in an environment with high demands on limited resources, and on reducing risk. The report, Payments Transformation: Emerging Stronger, discusses how financial institutions are continuing to grow – and tackle emerging and disruptive competition – while rationalizing investments. It indicates that payments are key to financial institution growth and strategies for competitive differentiation.
Here are highlights from our 2022 report.
The survey identified customer experience and market competitiveness as the most important reasons for launching payments transformation initiatives. Delivering enhanced customer experiences has become a critical success factor for financial institutions, and the incorporation of key experience metrics into internal processes is often an underlying driver of the transformation program.
In contrast, the list of immediate tactical projects identified by financial institutions was topped by high-value modernization, followed by instant or real-time payments. Financial institutions may believe these projects will ultimately enhance their customer experience and become a competitive differentiator. However, the survey also indicates that compliance is still a priority.
The survey demonstrates there is a clear understanding of the benefits of payments consolidation (meaning a unified platform for all payment types), including operational and customer experience improvements. Undoubtedly, payments are a critical element of a financial institution’s value proposition. By outsourcing payments processing to trusted partners, financial institutions gain best-of-breed capabilities and an improved customer experience, on a per-transaction basis.
Over four-fifths (82%) of respondents confirmed they were actively implementing or pursuing payments consolidation projects. The vision of a unified platform for all payment types and channels is becoming a reality for financial institutions.
Financial institutions and corporate treasurers know that a real-time approach to cash and liquidity management enables them to make effective use of their liquidity. However, most organizations lack the robust systems and tools needed to achieve that level of liquidity management. The survey confirmed that, with good, integrated cash management platforms and systems in place, financial institutions could track available liquidity and cash-flow needs, identify how to meet those needs and determine where to source necessary funds.
Funding, liquidity buffers optimization, intraday credit measurement and cost allocation require sophisticated capabilities. They depend on real-time processing, cross-asset visibility, forecast accuracy, limit management and the ability to interact with payment flows. The use of predictive cash-forecasting and self-service tools is therefore essential for financial institutions.
The survey also found that financial institutions understood the need to offer efficient cash management services that give corporate treasurers greater visibility, access and control of their bank account balances, transactions and money movements, as well as future payables and receivables information.
Surprisingly, almost none of the respondents admitted to having issues in this area, with the majority stating they were able to detect financial crime in real time. However, the majority also indicated there is a greater need for industrywide risk assessment in the instant payment environment.
It was clear from the survey that financial institutions will continue to play a significant role in the payments landscape, whether operating as a full-service, one-stop bank, or providing banking as a service, offering financial products to customers at the point they need them by integrating into a wider ecosystem.
To support their differing roles, financial institutions are increasingly looking to specialist providers to augment their services. Considering a relationship with a trusted payments partner can enable them to focus on what they do best: financial services and customer experiences.
Interested in learning more? Download the full report.