Payment Transactions

Payments & Treasury – real-time into the future

Digital payments, instant payments: payments - for a long time the "grey mice" of banking services - have been changing with increasing speed for some time now. The result: a coming new generation of payment products. Travelling this road, banks and financial services providers must face a number of challenges. The substantial changes affect the interaction between banks and customers (retail customers or corporate treasuries) as well as the payment streams between banks.

New interfaces, new formats, new technologies... banks must prepare for the massive upcomming changes. For the majority of them content and dimension of the projects will likely result in  resource constraints – both from a technical and quantitative perspective. To make things worse, there are  quite ambitious timelines and, on top, growing regulatory requirements.

Instant Payments have just been digested, banks now need to prepare for ECB’s T2/T2S Consolidation, a project aiming at a harmonisation of all Eurosystem Services of ECB. And along with this the complete change to TARGET2 and at the same time EBA EURO1 convert completely to ISO20022.

Zahlungsverkehr_Instant Payment

Change brings opportunity

The current developments in the payments landscape open up many opportunities for banks. New systems must be rolled out, architectures revised, business processes for payment execution improved, and payments and treasury management better aligned.

Already now, TARGET2 provides a number of liquidity saving features. The introduction of centralized liquidity management (CLM) for the consolidated TARGET2 - TARGET2Securities platform provides further automation and optimization potential.

Optimising the use of Intraday Liquidity does not only addressregulatory requirements. It will become essential once + the low-interest phase comes to an end Now is the time to build the foundation for cost and yield potential in liquidity management.

The way to the future of payments and liquidity management holds both opportunities and risks for the banks. Our consultants for the topic of payments & treasury will help you minimize risk and exploit opportunities.

We will help you prepare, implement, and manage your payments and treasury projects. Get in touch with us!

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

Regulation and innovation continue to shape the development of payments. With PSD II and Instant Payments, the discussions about FinTechs have faded into the background. T2/T2S Consolidation is a really hefty obstacle confronting the banks. The new development of the TARGET system pushed by the ECB ties up enormous resources: software readiness for the go-live in November 2021 must be reported to the Deutsche Bundesbank no later than October 2020. Changed account structures and modified procedures for the management of intraday liquidity in the Euro system pose additional challenges.more on thisless

On top of that: SWIFT will start its migration of payment transaction formats to ISO 20022 at the same time - but (unfortunately) not with identical allocation rules. These are all projects that require solid experience. And it is all but impossible to find employees with precisely this scope of experience on the job market. This applies equally to banks, consulting firms and manufacturers of payment transaction software.

In addition to these major projects, the regulatory environment also places high demands on banks. And with all this, they must not lose sight of the needs of their customers. Consumers expect innovative products and services - be it when transferring money or paying by credit card.

In order to withstand this development, business processes must be designed for the future and, among other things, the right software solutions must be continuously adapted and developed.
Keeping up with this development requires that business processes are future-proof and the right software solutions are continually updated and developed.

Whether complex market infrastructure projects or the migration to ISO 20022: syracom experts support you in the implementation. In addition, we work with you to develop the right strategy for your payment transactions and support you in implementing innovative solutions like Instant Payments.

Get an overview of our range of services and contact our payment transaction specialists.

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