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Real-time payments: A roadmap for banks

Real-time payments will soon be a common expectation. The challenge for banks is getting it done.

Overview

Consumers increasingly expect instant access to monetary value, while governments are pressuring banks to create ubiquitous real-time payment systems. An estimated 35 countries have implemented real-time payments capabilities, and up to 140 more could move there soon.

Banks wanting to meet these customer and governmental expectations must overcome operational and technical challenges. It requires redesign of internal processes and an alteration of current batch payment operations. Underlying payments technologies and central infrastructures also need modernizing.

While each bank’s path to build real-time payments will be unique, banks can take advantage of key success factors and common steps in the journey.

DOWNLOAD REAL-TIME PAYMENTS: A ROADMAP FOR BANKS [PDF]

A multi-year effort to build a new real-time payment processing platform in the United States could cost up to $5 billion—at least 10 times that expended in the United Kingdom.

Source: US Federal Reserve and Clearinghouse

Key Findings

Real-time Payments

The ease, speed, convenience, security and always-on processing afforded by digital technology will soon make real-time payments—the immediate transfer and availability of funds 24/7—a common occurrence.

DOWNLOAD THE REAL-TIME PAYMENTS: A ROADMAP FOR BANKS INFOGRAPHIC [PDF]

Experience in the United Kingdom, Australia and other countries shows that real-time payments is achievable and points to four key success factors:

  • Vision and strategy to shift the bank from a 30-year-old payments model to a 24/7/365 payments model. This means taking a hard look at the big picture to plan both for today and what’s ahead on the horizon.

  • Commitment and patience to invest billions of dollars and years of leadership focus to both minimize costs and optimize competitive advantage by pursuing new business and revenue opportunities.

  • Clear and actionable roadmap that outlines a step-change path to the end state and reflects lessons learned in other markets. For many banks, seven common steps move them from strategy to deployment.

  • Skills, gained by collaborating with other banks across the national industry and developing alliances and partnerships within the payments ecosystem.

Recommendations

Four considerations will greatly influence banks real-time payments journey:

Starting point    

Starting point. Banks with a centralized payment hub have a good foundation for real-time payments. Others will find it more difficult.

Time commitment    

Time commitment. If starting without a payment hub, the journey can take two to three years. Planning now is imperative.

Cost    

Cost. The cost through deployment can be up to $250 million. An appropriate investment strategy avoids a knee-jerk response if real-time payments become mandatory.

Customer adoption    

Customer adoption. Customer adoption in the United Kingdom took five years. Denmark’s adoption was much faster. The adoption curve is accelerating, pressuring banks to act now.

 

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Authors

Diana Bersohn

Diana Bersohn
Managing Director – Accenture Strategy
IT Strategy

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Jonathan Magder

Jonathan Magder
Senior Manager – Accenture Strategy

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