October 15, 2019
TABLE OF CONTENTS
As institutions realize that real-time payments expand beyond the P2P use case, the desire and need for adoption of an RTP solution is felt beyond the “big bank” atmosphere. In our survey, we found that 36% of smaller financial institutions, which include credit unions, regional banks, and community banks, are considering adopting RTP.
The reality of real-time payments is here and it is not limited to big banks. Now that TCH’s RTP rail is live, the technology is available and the customer demand for immediate access to funds is prevalent, smaller institutions are recognizing they need to implement real-time payments in order to maintain customer satisfaction, reduce customer attrition and support internal cost-saving initiatives.
It is well known that customers enjoy immediate access to funds but beyond that thought, RTP provides benefits that smaller financial institutions are also realizing, such as:
Transaction transparency offers benefits to an institution’s customers but it also provides the ability for the customer to self-service their banking needs. RTP provides customers with the ability to see all transactions, financial and non-financial, in real-time with all of the necessary data. This effectively can decrease the number of calls and servicing the institution needs to support by providing all relevant details to the customer in the UI where they have the power to interact and decision themselves.
In the past, smaller institutions have cited that they cannot compete with the existing digital offerings on the market for corporate customers due to the complex process of reporting batch-based cash positions and forecasting products. With RTP, the immediate availability of data and the requirement to show financial and non-financial transactions in real-time to customers, allows smaller institutions to now offer products that compete with the complex products offered by large institutions. With real-time payments, customer balances and cash positions are accurately reflecting in the available balance provided in the UI.
Payment immediacy and predictability simplifies a companies management of payments and liquidity but it also simplifies the bank processing surrounding the payment lifecycle. Based on the design of RTP and the rules for participating institutions, the movement of money, operational reviews and reporting all need to be streamlined and immediate. This means that streamlined and automated processes have to be built where human intervention is minimal, therefore simplifying the process in which they payment undertakes to get approved and out the door.
Whether your institution is a credit union, a regional bank or a community bank now is the time to start considering real-time payments. The opportunity to provide customers with instant funds availability, transparency and efficiency are here.
Our 2020 Real-time Payments Report is live. See the latest industry insights, emerging trends, and critical data shaping the future of real-time payments by reading the report today.
Senior Financial Services Consultant
Kara Ford is a Senior Financial Services Consultant who works with financial institutions, merchants and enterprises of all sizes to help them identify and implement their payment strategies. She comes to Levvel with 7+ years of experience in banking as a payments professional with deep knowledge in financial services offerings for commercial and retail customers. She has focused the last three years on P2P and Real-time payments with a focus on product strategy, architecture, and implementation of the services for customers.
In 2019, we participated in the RTP Buildathon, sponsored by The Clearing House, Oracle, Yodlee, and The Carolina Fintech Hub. Our task was creating a compelling use case for leveraging the RTP rail and building a working prototype to demo our idea.
Integrating the Zelle P2P Service into a financial institution's ecosystem is an incredible opportunity, but the journey to get there can be a rocky one for institutions not adequately prepared.
Real-Time Payment (RTP) adoption and readiness have been a point of consideration for Financial Institutions (FIs) dating back to The Clearing House’s (TCH) announcement to launch the service back in 2014.
The P2P space is a competitive landscape with fintechs and big tech companies competing with banks for wallet share. Zelle has strengthened banks’ abilities to participate in this market, helping them maintain their valuable customer relationships.