Gone in 15 seconds – why the move to immediate payments requires operational intelligence

By Shakir Ladak, CTO, DRYiCE iControl

Speed and convenience have never been more in demand in the banking sector. The digitisation of the economy, the spread of smartphones and e-commerce are all generating huge pressure for the general acceleration of payments.

Along with growing competition from Fintech companies, this has led the banking sector to the conclusion that payments must become instant or immediate, clearing in 15 seconds or less. In the UK, banks are already using the Faster Payments System, making 24/7 instant payments inevitable. 

“For those banks wanting to offer payment products, rather than loans and investments, instant payments will become the global norm, on both a domestic and regional basis, within 10 years, and even quicker in regions like Europe, Asia and the developing world,” says David Chance, SVP of Product Strategy at Dovetail, a provider of market leading payments and liquidity management solutions. “Banks that cannot provide support for instant payments will be at a significant competitive disadvantage.”

The challenge for banks planning to provide this service will be overcoming the unreliable systems built up in the past to respond to specific needs and requirements. The key to overcoming this will lie in operational intelligence solutions, which will allow banks to achieve the implementation of instant payments without a major overhaul of core banking systems.

The solutions establish what is critical in a bank’s business flows, using eye-catching visualisations that flag up dangerous bottlenecks in the processing of payments so that staff can intervene before any damage is done. Information from a variety of sources can be compared with norms in real time, with capability of refining benchmarks as the business evolves.

This is vital as institutions cope with vastly greater numbers of transactions than are currently processed, requiring them to work with vendors on radical overhauls of their current payment systems in order to avoid building new core infrastructure from scratch.

The danger for banks is that in making such a big move to immediate payments, they risk losing sight of the transactional activity they are processing. This means that important deadlines and obligations could be missed and, more importantly, the requirements of regulators may be left unfulfilled.

With regulations becoming increasingly onerous, banks must incorporate operational intelligence into their solution. By doing so, they can gain real-time visibility and insight into their business and IT operations by running query analysis against live feeds and event data.

At DRYiCE iControl, we work with banks and institutions to help them gain operational intelligence and prepare for the future of instant payments.

By using monitoring tools to feed data into an operational intelligence solution, banks gain access to real-time alerts, allowing them to take immediate action. Operational intelligence can also provide a holistic view, flagging up bottlenecks or imminent processing failures before they cause damage, using an accurate and agile predicative capability.

With payments becoming near-immediate, it is crucial that banks adopt near-instant operational intelligence to take advantage of the new opportunities opening up.