Payments Hubs: Progress in Achieving Straight-Through Processing
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The document discusses payments hubs and their implementation. It provides an overview of market influences driving financial institutions to evaluate payments hubs, including the proliferation of new products/channels and regulatory pressures. It outlines the value proposition of payments hubs in improving customer experience and reducing costs. Key benefits are listed as business enablement, risk management, and operational efficiency. The document concludes with lessons learned around change management and the need for an enterprise approach when implementing a payments hub.
Payments Hubs: Progress in Achieving Straight-Through Processing
- 1. Payments Hubs David Angelus Executive Director JPMorganChase Linda Benjamin Vice President BNY Mellon Jenine Parchmon Vice President Comerica Bank
- 2. Agenda • Market Influences • Value Proposition • Strategic Imperative • Payments Hub Benefits • Implementations • Lessons Learned 2
- 3. Market Influences • Customers begin to expect real-time processing of financial transactions; driven by staggering growth in mobile and digital channels. • New, innovative payment capabilities are rapidly evolving, driven by start-ups and non-bank FIs. • Coalition formed by the nation’s leading merchants to create a new consumer payments model; represent $1T in consumer spending; 17% of all U.S. retail sales. 3
- 4. Value Proposition • Because of market dynamics, FIs are evaluating Payment Hubs to transform silo-based operating environments: Cost reduction, Demand for Proliferation of improved, Commoditization Regulation and mandates. new products personalized of payment compliance Lower pricing and channels customer products mandates experience Limited ability Duplicated High costs of Inconsistent to develop Redundancy in functionalities systems Customer single view of operations and services maintenance Experience customer • Payment Hubs can unlock business value in the areas of customer experience, cost reduction, risk management and innovation/speed to market. 4
- 5. Strategic Imperative Challenges Changes Aging technology platforms Channel preference Speed to market Regulatory environment Payments fee income Channel convergence Risk Management New entrants 5
- 6. Payments Hub Benefits Business Enablement Risk Management Operational Efficiency 6
- 7. Payments Hub Implementation Platform/Operating Model/Organization • Avoid ‘boiling the ocean’: Think Big, Start Small – Incremental • Phased approach of critical components – Messaging, Systems, Workflow – Liquidity Monitoring/Management – Clearing and Settlement – Risk/Regulatory – Reporting/Analytics – Client Service 7
- 8. Implementation Components • Strategic Placement – Global process share or Corporate Utility – Business continuity and recovery strategy – Location strategy – Roles and responsibilities • Identify and assign – Ownership – Contributor – Participant • Implementation Plans – Coexistence/Migration – Deployment – Training – Communication • Change Management 8
- 9. Lessons Learned • Identify a senior business leader empowered to drive the corporate strategy across organizational boundaries • Know where to focus first – Agreement on approach and scope is critical • Create a fact-based assessment of the current product/services, operating and systems environment (s) – Identify end-to-end process owners/SMEs • Ensure governance, support models and prioritization processes are well defined 9
- 10. Lessons Learned • Ensure consistent client experience across business lines with single point of entry • Build for the future leveraging an enterprise platform – Requires enterprise approach across products, channels and lines of business • Develop cross line of business communication plans – Keep key stakeholders informed of success and challenges; problems don’t age well! • Embrace change… – It’s a journey…not a destination! 10