The title of this referenced article, appearing in Global Finance, is a bit off, since ‘riding’ is present tense, and therefore suggests adoption on a mass scale, which is certainly not the case. However, catching eyes is important to having people click. In the U.S. RTP has gotten off to a slow start, with momentum building in the larger institutions. Same Day ACH has shown fast growth, but still a relatively small % of total B2B volume. Canada is still working on the new real-time rails. The sub-title of the article is closer to reality, which speaks to adaptation (and increasing expectations) amongst the financial professional community. There is certainly interest, but a lot of ‘wait and see’ also in evidence as bank and solution access, pricing and so forth work through the morass.
‘A recent CGI Client Global Insights report revealed that “while European executives are focused on operationalizing new regulatory schemes by, for example, implementing open and real-time platforms, North American executives are in a more anticipatory mode, waiting to see the full impact of the shift to open banking and real-time everything.” However, banks in North America “fully expect to invest in payments modernization over the next three years,” according to the report.’
As we have pointed out on a regular basis, most recently in Fintech in Corporate Banking: Digitize or Miss the Boat, industry is changing and by the year 2025 we are going to be closing in on real-time ubiquity and convergent digital processing across cash cycle solutions. Determining exactly when this digital divide is actually tipped is hard to figure, but just a matter of when, not if.
‘With the digitization of business, many industries are undergoing accelerated change, and even disruption, leading to new business models and new ways of producing and distributing products and services. “Treasurers need to adapt how they do their payments and collections and efficiently finance the cash-conversion cycle to create value for their firms at a time of great change,” says Chakravarti.’
So the expectations and aspirations are accurate, although a wide variance in execution across industry sizes and sectors.
‘Once completed, the deployment of artificial intelligence, robotics, APIs and cloud services will enable treasuries to behave in more strategic ways. One thing is for certain: Treasurers and their banking partners look set to enjoy an easier ride on new, faster payment rails.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service