The Future of Payments

40 BANKING PERSPECTIVES QUARTER 4 2018 RTP at 1: Corporate One A AS THE CLEARING HOUSE’S RTP (Real-Time Payments) platform rolls out across the United States, the conversations within the market have shifted beyond the technical mechanics of messaging, speed of payment, and settlement and to a series of fundamental business questions: • How can a real-time payment framework enable my financial institution to transform the customer/member experiences? • How will a new payment framework allow our internal teams to develop and introduce innovative financial services to enhance or dramatically change the level of customer/ member engagement? • What are the opportunities a real-time payments framework can present to our local business partners or the community as a whole? • How can we leverage the opportunity associated with the real-time information exchange to create relevant conversations with our customers/members? • What are the competitive aspects our team needs to account for and outline as part of the planning process and digital transformation strategy? As a provider of correspondent, investment, and digital services to nearly 800 credit unions across the country, Corporate One and its wholly owned credit union service organization dedicated to digital transformation have actively monitored the developments of RTP over the last three years. During this period, we have provided dozens of executive briefings and educational sessions related to RTP and our customers are now seeking guidance to the questions noted above. As part of that guidance, we have provided numerous examples to reinforce the impact that faster payments will have within the global financial services arena, including the following stats outlined in the October 2018 Faster Payments Tracker: 1 • Expected value of faster payments in the U.S. by end of 2018: $255 billion. • Share of executives who expect real-time payments to improve liquidity planning, forecasting, and cash investment efforts: 87%. • Total members in the Faster Payments Playbook initiative: 60. The shift to real-time payment data exchange and settlement has started in other countries, including the U.K. and Australia, and the U.S. is positioned to adopt the first dynamic payment solution innovation in 40 years. The challenge will create significant opportunities, along with a series of challenges that must be addressed. The integration of RTP functionality into legacy back- end platforms as well as digital experiences will be analyzed closely by each financial institution. We anticipate a new category of service providers will emerge to offer streamlined connectivity to RTP. Regardless of how a bank ultimately will access RTP, we have encountered a demand for guidance and supporting material to understand why RTP is important to create long-term relevance. This article offers a perspective of the competitive forces from FinTech providers driving open connectivity via application programming interfaces (APIs), and why the RTP DELIVERS A NEW FRAMEWORK FOR DIGITAL TRANSFORMATION AND REAL-TIME EXPERIENCE INNOVATION. WHY RTP MATTERS BY KEITH RIDDLE, CORPORATE ONE