Developing incremental innovation in payments

With the advent of COVID-19, one of the most dramatic impacts in banking was a shift towards much greater digitalisation. In part that was because individuals and organisations were forced to work remotely – and they needed financial services to work for them.

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But while COVID accelerated this shift, it was one that was already occurring. At ANZ and in my role we have been working for some years now on an improved digital environment, one which is simpler, better suited to our clients’ needs, more secure.

“As many billers want to migrate to cheaper and more efficient channels, it’s equally important they understand why their customers are so dependent on specific payment types.”

This is the way all banking is shifting. For example, a recent EY report noted “digital transformation is accelerating, new risks are emerging and banking models and reputations are being tested. The COVID-19 crisis is placing greater pressure on banks to improve their technical capabilities at a time when they are also more vulnerable to cyberattacks and consumer credit challenges.”

That’s the global picture. But how does it play out at the local level? From our experience at ANZ, there are some key areas and functions we see as critical for our clients and where we can help.

Real-time Payments – when COVID hit we knew faster payments were going to be a critical – yet our clients’ IT teams were focused on the switch to remote working. This is why we developed a solution that allows us to accept a direct entry file. Via our translation capability we can then convert that file into an Osko (online network for sending money between participating banks) protocol so payments can be sent at any time of day.

This functionality helped paying casual staff, reimbursing out-of-pocket expenses and making payments to people in vulnerable circumstances. So we could provide an improved customer experience (faster payments) and reduce the need for our clients to use up their tech resources.  

Secure payments – we’ve heard some horror stories about fraud and compromised systems and when it happens to your organisation your concern only heightens. We often ask ourselves: “how can we help our clients sleep at night?”. One of my colleagues developed a solution that alerts a client when a new beneficiary bank account number is added to a payment batch. 

This allows the client to validate the details before authorising the transaction, reducing the potential for a fraudulent payment. It’s a simple solution which uses our matching engine and robotic processing automation to give clients peace of mind.

Working Capital Optimisation – many clients want to automatically identify receipts and consolidate funds. They want one account to manage their working capital or investment needs. Virtual account solutions have traditionally been used to manage reconciliation and compartmentalise balances.

These accounts also use capital more effectively by providing immediate access to pooled funds in one physical account while retaining the visibility and reporting benefits across multiple virtual accounts. This solves a big problem for clients as it doesn’t require complex documentation or facilities to be provided.

We use data analytics to provide deep insights to our clients - understanding customer behaviour is becoming increasingly important to business. As many billers want to migrate to cheaper and more efficient channels, it’s equally important they understand why their customers are so dependent on specific payment types.

Utilising data analytics we can provide insights to our clients on why their customers use a particular channel. We then apply industry best practice to help clients determine the most appropriate migration strategy.

Unattended payments – our clients operate in a global environment. They expect to release payments in their time zone and in real-time when triggered by an event. If funds are sitting in a USD account domiciled in Australia, they can be automatically transferred to an AUD account with clients having full visibility over the foreign exchange rate at the time of funding. Our clients can then process Osko payments from the AUD account to domestic recipients. 

This is possible now with the use of application programming interfaces (APIs), workflow tools and translation. And it’s such fun using all the building blocks to solve these real needs for our customers.

Anne A’Speculo recently won the Innovation Award at the Women in Payments Awards for promoting payments innovation through creativity, vision, and perseverance.

Anne A’Speculo is a Director in Customer Solutions at ANZ Institutional

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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