24
but standardisation will be required to ensure the necessary ubiquity. The ISO 20022 messaging standard is being specified by Australia, the US and EU – all of which are aiming to launch new real-time infrastructures in 2017. It is a good means to deliver rich data services as it can handle 140+ characters in comparison to the single figures of older message standards. It enables mobile phone numbers to be linked to bank accounts more easily and cross-border interoperability if a global framework can be agreed that minimises the slightly different interpretations from country-to-country.
The London-based Real Time Payments Group (RTPG) and other initiatives such as the SWIFT Harmonisation Charter, which will map to the RTPG ISO 20022 framework, are working to try to formulate a global standards roadmap for new instant payment platforms around the world.
Many newer launches such as the FAST payment system in Singapore, which has 19 participating banks on the shared back-end, rely on ISO 20022. As Ricky Lim, ex- MD of BCS which engaged VocaLink to help build and launch FAST in 2014, said at the Sibos 2015 trade show: “ISO 20022 helped us future-proof the national payment infrastructure and means we can carry bigger data loads.”
Now head of regional cash management at OCBC Bank, Lim added that “as China adopts ISO 20022 it means we should be able to plug into other nation’s [future] systems simply”. The planned new real-time infrastructure in Thailand, which VocaLink has signed a letter of intent to build, will also use the standard. If banks can access platforms cross-border it allows them to compete more effectively with global card schemes and other competitors.
Building a new platform is all well and good but unless banks’ own technology is flexible and run inexpensively, while still offering a great front-end customer experience, then they could still lose out to FinTech newcomers and challenger banks, especially if they have access to the new national real-time infrastructures being built. This isn’t a given and will depend upon each country’s approach to competition, resiliency and access, with
www.ibsintelligence.com © IBS Intelligence 2016
some insisting on sponsored access by an established bank. Others might seek to keep payment platforms for bank usage alone until the investment cost is paid for or the regulations covering deposit-takers and PSPs are equalised, but this position will be hard to maintain long-term.
Banks will only have a limited amount of time to offer the fast, data-rich services customers want before they lose their monopoly control of some real-time platforms or are simply overtaken by tech-led disruptors. Some newer national infrastructures won’t allow them that control in the first place.
The service layer should be the battleground for business and volume in the opinion of most regulators and customers, but this can only happen if the infrastructure layer is good enough to compete with the likes of Amazon or Alibaba. A national real-time payment infrastructure with new capacity and functionality means the technology can be good enough. Established banks’ must then ensure that their own legacy IT is in a good enough state to be able to take advantage of it.
There will be instances where FinTech firms, banks, PSPs, processors and others cooperate with eachother in order to provide ubiquity and customer uptake, and compete on the customer-facing frontline. This has prompted the somewhat cumbersome new word ‘co-opetition’ to denote how the payments landscape is growing and changing as more players become involved. Regulation plays a part too with the EU’s Payment Services Directive (PSD) 2, for instance, insisting on a more open playing field for all in Europe.
International overview – How soon is now?
The Australian new payments platform (NPP) system, being built with SWIFT’s assistance, is aiming for a maximum 15 second timeout parameter for its real-time solution by its 2017 launch date. In the UK a payment can be acknowledged in a similar timeframe on its older FPS backbone but in reality the settlement takes longer as three settlement cycles are run throughout the day due to the older technology and card-based messaging
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
