The fiscal strength of financial institutions (FIs) has weakened under the stress of multiple economic and industry factors. A mandate to trim costs to reinvigorate their base and maintain profitability into the coming years grows increasingly difficult to fulfill. And, while the electronification of checks has been a step forward on the path of operational efficiency, initially yielding some economic benefit, it does not go far enough to solve the challenging issue of rising preventable ...
Rapid change is occurring in the payments space to keep up with new demands and
new channels. Some are investing in new technology to keep up with demand, most notably integrated receivables platforms that run in tandem with new and existing receivables channels. But the competition for capital at many banks is making investments in receivables processing systems daunting.
Other banks are outsourcing their lockbox networks altogether, leaving third-parties to
determine the right ...
All of the players in the payments industry — payer companies, receiver
companies, banks, industry utilities, and technology vendors — continually
demand greater straight-through processing (STP) of payments to lower their
costs and speed payments settlement.
An important contributor to payments STP is payments tracking; the ability to track the progress of payments and intercepting specific payments with formatting or other exceptions issues.
The prototype for future payments tracking is package delivery as ...
In the United States, financial institutions, on average, derive 30-40 percent of their revenue from payments. Therefore, the massive transformation from paper-based to electronic-based payments processing is putting financial institution profitability at risk.
While Check 21 enactment in 2004 set many of the payments industry changes into motion, a number of other factors over the past decade have had a material effect on paper and electronic volumes. Increased debit card use and a variety of ...
Imagine a totally automated payment-processing environment where fraudulent, duplicate, or erroneous items are corrected (or rejected) before posting. Imagine how happy your customers will be with the error reduction in such an environment. Imagine the costs that could be eliminated.
Now compare this to the current system of reconciliation, where mistakes and fraud are detected after the fact, after the customer relationship has been tarnished and the institution is forced to write off unnecessary losses. ...
Being duped is never a good thing. This is especially true for financial institutions when the age-old backroom problem, payment duplication, is magnified because of new electronic clearing protocols.
In the past, duplicate postings to demand-deposit accounts (DDAs) were a manageable processing anomaly because financial institutions became proficient at minimizing these exceptions in the paper check-based environment. However, times have changed. Payment systems must now deal with automated clearinghouse and lockbox items, as well as ...