Wholesale Banking Trends & Higher Standards l Tony Smith, ACI Worldwide

Tony Smith of ACI Worldwide, provides his insights on current customer innovation and future trends in wholesale payments. http://www.ACIWorldwide.com The Payments Industry is unforgiving because the tolerance for any kind of outage in payments has steadily come down and down, in that 10 years ago it was probably acceptable to have the Payment System off the air for an hour every month. Now it's really not acceptable to have it off the air ever. There's really zero tolerance for outage. So the stakes get higher and the standards have to get better and better. A bank that's a leader in the payment space really has to be good at three separate things. They have to have really competitive payment products and that means that they have to differentiate themselves in the payment offerings that they make to their different customer segments. They have to be best in class in Payments Operations. They need efficiency and completely competent Payment Operations that, again, just like the Payment System are never down and never not working. They need really good IT support for payments. They need to be good at all three of those things to be best in class in payments. There's a bank in the Americas which had very fragmented payment systems as a result of acquisitions and a legacy of internal development. With a single instance of MTS with an amazing improvement in their unit costs and their efficiency they were able to replace all of those payment systems. In Europe there's a bank which was highly respected as having some of the most innovative payment products and as often happens because they had developed their systems internally for many years and really had very impressive, very sophisticated systems they were quite sure that no package could ever do what their homegrown systems could do. There were some gaps. There always are when you're replacing a very sophisticated homegrown system. I think it was quite amazing that the gaps were tiny and at the noise level and that off the shelf, MTS as a payment engine could replace almost all of their very high-end homegrown functionality. In Asia, I can point to a bank which very proudly tells us that when they first installed MTS as their RTGS Payment System their staff for back office operations was reduced by half. Over the next several years, their volume increased five-fold and their staff never went up at all. There's a bank that I'm particularly impressed with that is very innovative in their operational approach. They have branches in different countries around the world. These can be addressed with a single consistent MTS Solution that processes their payments the same way in all countries. Because of their consistency they're able to distribute their operational workload. They can have' follow the sun' processing. They can have Operation Centers backing each other up and in particular almost all of the routine payments work is done by a shared Service Center in India. If I think back over the last 20 or 30 years the very important innovations I think have come from the ability to change the definition of payment processing and create innovative payment products simply by defining rules in the payment engine. It wasn't long ago maybe even five or ten years where all of this would involve changing the software, writing new lines of code but now a lot of the product management and the operations support can be done simply by changing rules in the payment engine. This gives a bank a lot of flexibility and the ability to narrowly focus their products on different customer segments. We've seen examples where unique payment products have been created. For example in the energy industry, in the movie industry in one case, and in particular, for the mortgage industry which have unique payments requirements. We're also going to see real innovation in the managed part of payment processing which is in the back office and that means we're going to see the final frontier start to break down. Where the bank can really run all of its payments on a common platform and we'll start to rationalize some of the differences in the payment industry, some of the inefficiencies and be able to really have best in class Payment Processing across the entire Payment Lifecycle. SUBSCRIBE HERE TO SEE MORE GREAT VIDEOS ► http://www.youtube.com/subscription_center?add_user=ACIWorldwide SUBSCRIBE TO PODCAST CHANNEL ► https://itunes.apple.com/gw/podcast/aci-worldwide-podcast-series/id820468115?mt=2 CONNECT WITH ACI WORLDWIDE Facebook ► https://www.facebook.com/aciworldwide Twitter ► https://twitter.com/aci_worldwide LinkedIn ► https://www.linkedin.com/company/aci-worldwide Google+ ► https://plus.google.com/+Aciworldwideinc/