The Potential of Real-Time Payment Data

The value in real-time payments goes beyond the ability to move money in seconds. The capacity to exchange transaction data is also significant. Financial institutions are quickly realizing the potential of the rich data that comes with 24/7 instant payments.

To leverage this data and take full advantage of the information that it offers, banks must adopt technology that provides a full view of transactions across different faster payment types and the various faster payment rails -- such as The Clearing House’s RTP network, Same Day ACH,and the FedNow Service.

There are a few different areas where real time payments data can enhance a bank’s operations:

Treasury Operations

Rather than spend hours reconciling payments through multiple channels, balancing accounts and compiling reports, a centralized payments platform like Pidgin can help banks automate and simplify many of these processes. Not only does this save time, it also minimizes human error, which is a prime risk that comes with manually entering data into back-end systems.

Automating these treasury processes with real-time payment data can reduce operational expenses for banks as well. Each and every transaction that fails to post or requires manual intervention to resolve can cost a financial institution an estimated $50 to $60, according to industry estimates.

Using real-time transaction data, banks can establish rules and define the parameters for various back-office workflows, including reconciliation and exception management, eliminating much of the need for human intervention. For example, some banks may opt to assign specific reconciliation processes for payments based on certain transaction attributes.

Compliance & Risk Management

Having a single, unified payment processing platform means transaction information is maintained in a central location, so it can be easily accessed and shared by authorized personnel throughout the bank.

This makes it much easier to connect payment data to other upstream and downstream applications, such as anti-money laundering and fraud detection systems, as well as to internal and external sanctions lists. Doing so ensures that transactions run automatically without compliance issues while also enhancing security.

Liquidity Management

Additionally, financial institution leaders need to understand how they will maintain suitable liquidity for around-the-clock, instant payments. Real-time payments will mean that banks no longer need to calculate liquidity needs based on end-of-day batch processing and can instead use real-time transaction data to determine dynamic intraday liquidity based on the speed of liquidity changes and associated counterparty exposures.

With real-time visibility of transaction data, financial institutions can optimize their funding positions and improve liquidity management, resulting in fewer missed revenue opportunities.

From improving risk management, compliance, fraud detection, and more, the ability to consolidate transaction data from disparate sources into a centralized faster payment platform and view that data in real-time can boost efficiencies across the bank.