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Can you cope with instant payments and the instant data economy?

There are two main strands to a business becoming ‘instant/real-time’, first there is the move to instant payment systems and second the evolution to becoming part of the ‘instant data economy.’

Instant payment systems

Deutsche Bank’s Instant payments – A guide for corporates white paper is a detailed description of:

  • the infrastructure in instant payment systems
  • how regulated
  • the opportunities and benefits for corporate treasurers embracing instant payments as part of their liquidity management strategy. 

It describes the schemes in place, how they work and how to make the most from them. 

It has been written by a team from Deutsche Bank who cover:

  • what is an instant payment and process flow:
      • Source & Copyright©2019 – Deutsche Bank 
  • a global review of regulation, market practice and other drivers of development 
  • the instant payment schemes worldwide and an explanation of instant payments in practice 
  • SEPA Instant Credit Transfer: challenge or opportunity and examples of use cases per customer segment 
      • Source & Copyright©2019 - Deutsche Bank
    • How to combine instant payments and APIs 
  • Payment and information flows from an e-commerce perspective
  • Existing and future functionality.

The excellent 30+ page practical report closes with Deutsche Bank examining how the banks can differentiate themselves from non-bank providers. There is a key paragraph stating that “One key factor for the success of instant payments will be whether the banks prove able to create a user-friendly and cost-efficient environment for consumers that will provide a competitive, secure and reliable payment system, which delivers a convenient user experience and provides advantages for both corporate and retail clients.”

Grabbing the benefits of the ‘Instant data economy’

There are many suppliers working on the new instant payment environment. Esther Groen, Partner at INNOPAY, in an interview on their website, explains why she believes that this changes the game and that all organisations should develop a coherent Data Strategy that will help them reap the benefits of the Instant Data Economy 

INNOPAY supports financial institutions and corporates in their digital transformation, specifically focusing on how to operate in open, data-driven ecosystems. She writes that “The Data Economy is a digital ecosystem in which data is collected and exchanged by networks of parties to derive value from the information. The value of the EU Data Economy is predicted to increase to EUR 643 billion by 2020, representing 3.17% of the overall EU GDP. Currently, 2.5 quintillion bytes of data are created each day, and the amount of data will continue to increase exponentially as more people are on-boarded, as the Internet of Things expands, and as the sharing economy develops.”

INNOPAY claim that there are many benefits from revolutionising business models, optimising production and decision-making through automation, and enabling the development of innovative products and customised services, the data revolution can spur job creation and significantly enhance competitiveness and public service provision.

There are many challenges in preparing for the Instant Data Economy. The complexity and depth of the changes that are required are shown by the Triple-A Model INNOPAY have developed to break the problem down into 3 connected layers:

Source & Copyright©2019 – INNOPAY 

Groen advises that organisations take three steps towards designing their own Digital Operating Model:

  1. Create a Data Strategy for your business
  2. Consider how your future commercial propositions will be impacted
  3. Think about the new requirements for your internal organisation.

Groen’s overall conclusion is that "If organisations don't act now, they risk losing business, becoming less relevant, getting disintermediated and becoming more vulnerable from a risk and security perspective.”


CTMfile take: Both the Deutsche Bank white paper and this interview are well worth downloading. They show that moving to instant payments and to the ‘Instant data economy’ requires huge shifts in systems, processes and attitudes. Are you ready? Can your systems deliver?

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This item appears in the following sections:
Best Practices & Benchmarking
Operational Risk Management
Urgent/Instant Payments
Tips
Treasury insights

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