Part of the challenge of payments is the wide breadth of functionality it covers: retail, institutions, transactional, and asset servicing.

Regardless, there are common themes of fragmented or partial data and manual processes arising from legacy processes that mean increased costs and capital risk.

As a data network-focused organisation, AccessFintech looked at challenges and identified areas where we can be disruptive and use data to improve straight-through processing (STP) and efficiency, reduce capital lock-up and enhance client and user experience. Cash payments became a natural expansion of our data-sharing workflow following the successful adoption of our solutions for settlements, margin, claims and upcoming regulation management (like the Central Securities Depositories Regulation).

Once clients became familiar with our matching capabilities, exception management functionality, and shared data network, we found them asking: “what should we do about payments? Our cash payment process is expensive — can you help?”.

The core fundamentals of a shared process, extending across multiple firms (the paying and receiving parties, associated custodian or agent etc.) with a shared interest to improve, are the key factors that drive adoption of the Synergy network AccessFintech operates.

In the finance sector, every function and process is impacted by cash payments, from the processing of derivatives transactions to the managing of asset servicing events.

Payment teams may be on the phone for most of the day, verbally affirming payment amounts, performing callbacks whilst managing manual processes via spreadsheets, email, fax, and doing floor walks looking for managers to provide wet ink signatures. Processes that are manual, antiquated and costly.

These processes often lead to payments not being affirmed and high volumes of erroneous and delayed payments. The effort involved in reconciliation alone can be enormous, as can the capital lock-up whilst investigation takes place — not to mention the cost of kickbacks, rework, overdraft claims, and missed investment opportunities due to the late application of cash to the correct accounts.

With results like this, the entire market now has one more option for what to do about payments:

If payments could be matched systemically just by sharing data, AccessFintech could revolutionise this process — so we did. The first organisation to go live with our Cash

Payment Matching solution reported an immediate STP rate change of 0 per cent to 97 per cent.

Options 1 and 2 will hold for a few months but are not operationally resilient.

The industry is moving fast and those that choose not to change or attempt to solve with even more headcount will soon be left behind.

Bank clients themselves have expressed concerns about how their payments are managed.

Option 3 (to transform, leverage existing data to ensure right first time) is what should be done about payments.

AccessFintech uses data to support transformation with a focus on maximum STP increases and secure, efficient and audited exception management.

With the problem statements with current cash payment matching processes defined and a consensus on the optimal solution from our industry working group reached, AccessFintech was able to utilise pre-existing matching, collaboration, and workflow functionality to create an offering that supports STP matching of payment data prior to pay date.

Most payments are STP matched, leaving teams to collaborate efficiently on unmatched or mismatched exceptions to resolve the real issues in plenty of time for pay date.

The solution has been designed to ensure it can support any payment type, and organisations are currently using it to transform processes relating to six different payment types with many more in the pipeline.

Leveraging existing data to systemically match payments and work collaboratively to resolve exceptions prior to pay date has been proven to work — increased right first time, and decreased errors, reconciliation, and missing cash.

The payment sector is in an exciting time where change is both expected and funded.

The benefits of reduced fails and increased self-service allow for self-funded improvements — and the uptake has been dramatic. Join the industry for the journey!

Publication: Asset Servicing Times