Summary
Real-time data, when used in concert with customer performance analysis, can help banks accelerate migrating customers that use paper checks to electronic payment methods. Real-time data will strengthen banks ability to provide international payment offerings as part of a complete payments solution for corporate customers.
Analysis
Large banks such as JP Morgan Chase, Bank of America and Citibank are fully engaged in creating complete payment solutions for commercial customers. These payment solutions include domestic and international payments. They enable improved ease of use, self-service payment portals, integration with payment applications from vendors such as Oracle, SAP and Microsoft; and support of a full range of payment types such as ACH, debit, credit, international ACH, wire transfers and alternative payment type such as PayPal. Broad payment platforms utilize multiple communication networks such as Mastercard/Visa, AMEX, SWIFT, CHIPS and FEDI. They serve all customer types from large multinational companies, mid-sized companies and small companies, including those engaged in international trade.
Customer performance analysis is required in order for banks to correctly understand the firmagraphic attributes and behavioral characteristics of customers. Holistically understanding the entire banking relationship with these customers will enable banks to offer broad payment solutions that will entice and compel corporate customers to abandon paper checks and take advantage of electronic payment methods - domestically and internationally.
Today, the majority of B2B payments are sent via paper check (25 billion according to BIS Research), representing 60-95% of total B2B payments made by check (% varies according to company size: source Aite Group). The integration of real-time data into Check 21, currency trading and back office conversion (BOC) initiatives can help banks communicate and persuade customers in a relevant and timely manner when based on usage of customer transactions.
The benefit of real-time data is in creating timely and relevant conversations with banking customers that move them away from paper checks. It allows banks to deliver high value services to customers that must manage the risk of currency fluctuations while they do business in a global economy. Real-time data enables banks to put control of the clearance or settlement date in the hands of the corporate customer and improve their cash management operations.
