In the payments world, we are definitely seeing an increase in real-time and instant payments, with significant investment in real-time systems in the UK, Europe and the US. This is very much in line with customer expectations for a real-time experience.
Why transform payments?
How banks process payments makes a big difference for merchants and customers, and often the traditional technologies banks use don’t work in an optimal way for every use case, merchant or consumer.
Transforming payment processing not only benefits banks from a revenue generation perspective, but also helps keep consumers happy. The credit profile a consumer has with their bank is always valuable to merchants, and as a result, consumers are more satisfied with the service they receive from their bank. Read our white paper, “Adapting to the Digital Shift,” to learn more.
Adapting to new proposals
This is a rapidly evolving space. Banks need to accommodate new propositions involving payments, from environments such as gaming to leveraging different asset classes and investments. If banks continue to use legacy systems, it can be difficult and costly to make the changes required to process payments for these different use cases.
A bank’s reputation for being able to process payments 24/7 is part of the relationship with its customers, especially in a digital world where the bank and its operational capabilities are fully visible to customers.
Aimer O’Connor
Chief Product Officer, Form3
Reduce the burden
Therefore, it is important for banks to transform their traditional payment processing platforms, which may include leveraging third parties such as card payment processors and real-time payment processors. These third parties can help banks efficiently adopt modern infrastructure and reduce the burden of transforming their traditional platforms.
Unlocking Value
Once banks have access to a central infrastructure capable of processing real-time payments, the next step is to leverage that capability to deliver products and services that provide real value and differentiate from competitors. This is key to delivering greater value in a digitalized way.
The flexible technology available today offers banks a huge opportunity to make their offers as compelling as possible to segments of their customer base. They can also use the data they gain from interactions with individuals to create rich, personalized experiences.
Third-party payment processors can provide banks with the modern infrastructure they need to support new use cases, stay compliant with rules required to protect consumers, and continuously innovate.
Mehret Habteab
SVP, Products & Solutions, Visa Europe
Adopting emerging technologies
As the digital shift continues, technologies such as machine learning (ML) and artificial intelligence (AI) will play an increasingly important role in helping banks stay current.
Many banks are already starting to explore how they can use AI to enhance their customer support and service capabilities, for example by looking at how AI can help them better understand their customers’ financial situations or identify where they are in their customer journey.
Understand customer behavior
By analyzing the products and services customers use and understanding how consumers engage with their banks, banks can gain a clearer understanding of behavioral patterns, which can help banks engage with their customers more effectively. It could mean helping people suffering financial stress or providing a product or service that meets the needs of customers at a particular moment in time.
Deliver a personalized experience
Consumers increasingly expect their banks to understand who they are and what they want, to deliver personalized experiences and suggest relevant offers.
AI and data will play a key role in helping banks meet this expectation safely and securely, with customer consent.
Digital-first businesses are better positioned to leverage the benefits of AI, while traditional banks may need to work with technology providers to take advantage of the opportunities AI brings.
Think about how we interact with news agencies or retailers and are offered products and services based on past behavior. Data exists for banks to interact with their customers.
Aimer O’Connor
Chief Product Officer, Form3
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