In a survey of 47 financial institutions, 60% told Aite Group the business of payments is extremely important to the bank's or its clients' profitability; another 36% chose "very important."
Banks are not satisfied with their current payments technology, according to another survey Aite conducted in September, in which it found that none of the 31 bankers, vendors and consultants attending a webcast were happy with their existing payments structure and systems. The majority -- 53% -- are planning for payments consolidation within the next two years, although 32% are not confident about how to make that happen. Another 36% are in the process of implementing payment changes now.
Consolidated payment services for business clients are rare among banks today. The Aite survey found that at 44% of banks, payments are managed and processed by individual payments type and line of business. At 33% of banks, payments are managed and processed through consolidation of payment types, but segregated by retail or commercial banking. At another 17% of banks, payments are managed and processed as a single line of business for the bank, and at only 6% of banks, payments are managed and processed by consolidated payment types, with one system for each type of payment.
Unconsolidated payment operations present several challenges, according to report author and senior analyst at Aite Nancy Atkinson: "lack of systems consolidation or interoperability, lack of consistent policies and procedures, lack of coordination across all payments stakeholders (e.g., banks' customers, business managers, operations, risk management, and information technology), and lack of enterprise-wide information." Banks that create payment hubs, allowing business customers to manage all their payments from one place, can "expect internal cost savings from the removal of duplicate systems, automated communication between remaining systems, and the opportunity to reduce or deploy staff."