Payment Transactions

Payment systems are stabilizing? Not in your life!

The evolution of the Euro system is quite challenging and keeps banks busy. The transition to SEPA (Single Euro Payments Area) just being completed, the next demanding change is the consistent introduction of ISO 20022. TARGET2 plans the complete replacement of the classic SWIFT messages by the end of 2017.

The introduction of Target2 Securities will also make the use of ISO 20022 mandatory. Furthermore, the liquidity management (Euro intraday liquidity) is strongly impacted. The introduction of wave 3 of T2S, with a live date in September 2016, therefore results in big projects for the entire German financial market.

A number of new regulatory initiatives create an additional challenge for financial institutions, such European Payment Services Directive (PSDII), ever-changing Sanction Rules, more stringent regulations on liquidity and cash management (Basel III), and initiatives such as SecuRe Pay.

The topic of Instant Payments poses great challenges and requires huge investments. The ECB initiative to make money transfers possible in real time could revolutionize the financial sector as a whole. New IT systems would be necessary and familiar processes would have to be rethought.

syracom has more than 15 years of well-founded know-how in banking, in particular in payments and treasury. Our experts will gladly support you in managing the upcoming challenges. They accompany you during the preparation, implementation, and management of your projects.

  • Strategic questions
  • Euro System (TARGET2, T2S)
  • Architecture and integration
  • Instant Payments

Regulation and innovation in payments, competition and cost pressure – these are the hot topics for banks. New legislative and regulatory requirements, both national and international, have a significant impact on this area. While the hope was that the implementation of SEPA would create a solid basis and thus a stable basic system for many years, in fact the payments ecosystem is changing faster than ever. In addition to innovative payment methods and the associated technical challenges, Fintechs have entered the market with product innovations and new services.more on thisless

As a result, banks face more pressure than ever. For instance, banks are subject to a lot more regulatory requirements for authentication procedures than service providers. However, providers of new products only cover parts of the entire process chain and expect that banks cover the other (unpopular and often cost-intensive) sub-processes. On top of this, consumer behaviour is changing rapidly. In particular the young and internet-affine generation of bank customers desires alternatives to bank transfers and credit cards:

  • Important decisions must be made concerning cooperation with Fintechs or the development of own products
  • Instant Payments: own products or minimal implementation of ECB initiative

The number of topics is increasing exponentially. Keeping up with this development requires that the right software solutions are continually updated and developed. And of course, it is necessary to analyse and optimize existing business processes and get them ready for the future.

syracom has the expertise to help you develop new strategies for payments. We also help you implement solutions such as Instant Payments.

Get an overview of our service spectrum and contact our consultants.

A lot is left to achieve the harmonisation Europe's financial markets. The next topics on the agenda are Target2 Securities and Collateral Management. In order to develop TARGET2 further, a market consultation took place in the last few months in which the ECB and the Central Banks presented their Vision 2020 and asked for feedback.more on thisless

Many banks have a critical view of a few points, such as the transition from TARGET2 to ISO 20022. Nonetheless, more harmonization (beyond SEPA and EUR) is deemed sensible. The introduction of new standards must therefore bring benefits. The experts of syracom will gladly advise you concerning the results of the ECB study and help you form an opinion and implement projects.

T2S is to be used in 21 European countries by February 2017 and cover almost 100% of the securities transactions in Euros. In addition to the implementation of basic functions (change of settlement processes and standards), the roll-out also exposes financial institutions to changes in the management of intraday liquidity and intelligent use of collateral, e.g. using so-called auto-collateralization. The optimization of these processes will occur over an extended period of time, as will the implementation of the diverse T2S-related change requests of the banks. At the same time, the planned February 2017 roll-out date for the German market will require adjustments of procedures and processes. syracom is already helping various companies with the introduction of T2S. Get in touch with us!

Innovative payment services make it easier to shop online, especially for internet-affine users – whether per smartphone, tablet, or notebook. At the same time, PayPal, paydirekt, or Amazon Payments pose challenges for all businesses in Germany. . In order to maintain their ability to act, they must adopt their IT strategy to the changed business models. Thus includes sustainable process optimization as well as the development of new target architectures for payments, always taking into account the technical requirements of the businesses. Together we can formulate requirements and solutions and coordinate them with your departments of external partners.more on thisless

Communication channels and protocols

An important component in the payments transactions of banks are the used transfer protocols and communication channels to clearing systems and correspondent banks such as SWIFT and EBICS. They presuppose the development of a suitable IT infrastructure or the outsourcing of the respective connections. We will gladly help you select and implement suitable action options. . . In this manner you will be able to implement inter-bank payment transactions safely and quickly world-wide.

Managing and using information efficiently: digitization

Digitally archiving payment documents and searching for them with the click of a mouse. This is no longer a revolution but simply the standard for all banks. This gets rid of old receipts in huge archives. Whether you use the services of a provider or want to create your own system – together with us you can integrate your entire desired archiving model into the IT system of your bank.

 

 

Money transfers in at most 10 seconds (from client to beneficiary), 365 days a year – that is Instant Payment. Based on the EPC Scheme SCT Inst, it is to be available everywhere in Europe at the latest by the end of 2018. Great Britain and Sweden already have functioning national solutions. In addition to other national providers, both EBA Clearing (from November 2017 with their offering RT1) and the Eurosystem of the ECB (Go live in November 2018 with their offering TIPS) are working on clearing and settlement solutions for Instant Payments.more on thisless

There are various questions that credit institutes must answer when implementing Instant Payments:

-          How to ensure the liquidity for Clearing Instant Payments different systems around the clock and on weekends?

-          How to verify the credit balance of the payer?

-          What connections to which clearing and settlement systems make sense (possibly several connection in parallel)?

-          How to structure the products for one's own customers?

Industry experts agree on one point: Instant Payments will change the payments market visibly in the coming years and at least partially replace various payment instruments. This will also greatly affect SEPA payment instruments. Banks thus not only face the question of whether but also when and how they should offer their customers Instant Payments products.

Due to its diverse contacts, syracom knows the topic first hand – and knows how far the plans of different providers have progressed and what peculiarities the different systems have. syracom can thus advise its clients in the decision-making process, calculate the feasibility of different scenarios, and guide the institutes through the implementation phase.

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Interested?

Call me or write me

Harald Keller

Head of the Competence Center for Payment Transactions and Treasury

Phone: +49 6122 9176 0