Expectations are high across all account types and use cases. Real-time capabilities are the top requirement when choosing a banking partner, say 85% of corporate decision makers in a 2022 Citizens Financial Group survey. Consumers have made clear they expect real-time funds availability, credit for bill payments, A2A transfers and payments of all kinds.
The rapid growth of our Turnkey Service for Zelle®: Small Business product underscores the value financial institutions and their small business clients place on real-time money movement. As of December 2022, we saw a 159% increase in users and a 182% increase in transactions year over year.
Many organizations have quickly stepped up their game – so much so that more than 1,000 financial institutions are connected to real-time via the NOW Gateway from Fiserv. NOW acts as a router, a network and a gateway, connecting clients to real-time payment networks through a single integration. API-based connections to The Clearing House (TCH) RTP network and the FedNow Service via the NOW Gateway will cover more than 80% of DDAs in the U.S.
What’s next? Real-time payments are going global. EY projects cross-border payments to exceed $200 trillion by 2027, including everything from B2B and B2C to remittances, so you can expect interest in this space to be high. Collaboratives are already working to deliver cross-border payments in real-time, and to overcome the challenge of interoperability between systems in different countries. For example, Swift, TCH and the European Banking Authority are working with major banks on a pilot to determine how to make real-time cross-border payments work between the U.S. and Europe.
Real-time priorities extend to information and data
Financial institutions are increasingly looking to understand how they can factor real-time data and information into user experience and workflows. Prior month transaction data is no longer enough. Institutions want a clear view of consumer financial data to help them understand how, where and when accountholders receive and send money, and in what amounts, in real time.
The goal for many of the financial services providers we work with is to use real-time data to engage consumers and enrich the user experience. For example, to help people manage finances, use credit responsibly or plan for the future, an accountholder could receive alerts saying:
- “Did you forget to pay your electric bill? You usually pay it by now.”
- “House hunting? You’re pre-approved for $X. Tap here to learn more.”
- “We see you’re car shopping. We can approve you instantly for $X at Y%”
Send real-time loan alerts to accountholders when they are at a dealership.
Another priority is to mitigate risk and simplify the process of sharing consumer data with third-party providers. These connections require consumer-permissioned access, which many consumers are willing to give. Fiserv consumer trends research Expectations & Experiences: Fintech Adoption found that two-thirds of consumers aged 56 and under are likely to share their banking information with a third party to access fintech applications.
Despite some consumers’ openness, limiting third-party access to provide only the necessary information (and not all of a consumer’s account information) is a priority for financial institutions. Security is far and away the most important reason, but data owners also benefit from having access to data others don’t have.
Fiserv introduced AllData Connect to allow users to specify exactly who they want to share data with and what account data they want to share. A user can share with one organization but not another, and can indicate which aspects of their account (balance, deposits, transaction history, etc.) they want to make available. Since this specificity relies on consumer-permissioned, pre-embedded data, makes screen scraping unnecessary – even where the institution hasn’t already shut it down. The third party never has access to the user’s credentials, creating a more secure environment for everyone.