Insight
Tech, compliance & opportunity
ALAN HUSE, HEAD OF PAYMENTS & CASH MANAGEMENT PRODUCT, ANZ | MARCH 2019
Legislative changes have the ability to affect any sector – particularly as rapid changes in technology alter the landscape for both businesses and customers.
For many companies – particularly banks – it’s easy to approach the preparation for such changes as ‘compliance projects’, dictated by minimum requirements and tight timelines. But this misses an important opportunity for both banks and customers.
Indeed, it is important banks look beyond that component in isolation and seek to develop new products and services to bring the spirit of such legislation to life.
A case in point is the New Payments Platform. Launched in February 2018, the NPP was a material project for all banks to amend systems and processes in order to accommodate a new clearing stream.
For many, the prime focus was to be ready on or near day one to provide customers with the initial attractive service of real-time, data-rich, 24/7 payment functionality.
It would not be a surprise to hear the banks’ relief at having achieved this goal and a collective pause for breath.
But as businesses and consumers start to embed this in their way of operating, the scope exists to develop new products and services - and distribute them via new channels on top of these payment rails – in a bid to improve the end-customer experience and commercialise the core investment.
The first two such overlay services being pursued at an industry level are ’request to pay’ and ‘payment with attachment’, both of which can present an opportunity for banks to develop or customise solutions around specific industry use cases.
In exploring such opportunities, the Australian market can learn from the experiences of other geographies where instantaneous or near-instant payments are already quite established.
In fact using the connectivity of real-time payment systems to produce an instantaneous cross-border payment is another potential solution which would solve a longstanding customer pain point.
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“It is important banks look beyond [the compliance] component and seek to develop new products and services to bring the spirit of the legislation to life.”
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Not alone
On top of the NPP, Open Banking is looming on the Australian legislative horizon, both for banks and other sectors associated with the financial industry. The current timeline sees some form of legislation coming into effect in July 2019 with various iterations thereafter.
At its heart, open banking provides consumers with the right to share their data with regulated third-parties. Consumers are always in control of the type of data accessed and for how long.
In an Australian context, it is easy to see a scenario where a convergence of the desired outcomes of these various legislations could arise and where careful, industry-wide planning would ensure these are achieved with minimal risk of overlap or contradiction.
The various bodies that oversee the payments industry in Australia are looking closely at this future roadmap.
Customer driven
In today’s world clients are asking banks to do a number of things for them. In addition to doing the basics really well, customers want banks to help them run their businesses better, improve their own customer experience and tell them something about their operations they don’t already know.
Technology advancements have undoubtedly played a huge part allowing us to deliver some solutions that support this agenda and there have been many recent developments - APIs perhaps being the single biggest contributor - that have brought these solutions to life.
But the regulatory and legislative environment is nudging banks towards a different kind of thinking – one about clients and organisations; one that looks beyond the ‘must-dos’ and to the spirit of the changes. The ones which embrace this thinking are likely to be winners in this continually changing and challenging world.
Alan Huse is Head of Payments and Cash Management Product at ANZ
You can read more about ANZ’s commitment to the NPP HERE.
This piece was inspired by an interview with InstaPay. You can read the interview HERE.
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