Considering the outsized role technology plays in virtually all manner of innovation today, it should come as no surprise that faster data and better analytics will do the same for payments and banking.
This, as cloud-based solutions and data-insights platforms can expand access to financial services for millions of people worldwide who are increasingly going online to conduct every aspect of their lives and expecting 24/7 service 365 days a year.
Amid the global shift, these technologies can help keep “trust at the core of everything we do,” Early Warning Chief Technology Officer Milind Nagnur told PYMNTS, “and also make these services more accessible, faster, smarter and safer.”
Underscoring this, Nagnur pointed out that Zelle, the payment network owned and operated by Early Warning Services has logged 1.3 billion transactions so far this year, moving more than $350 billion. This includes 466 million transactions worth $127 billion in the third quarter alone, as Early Warning said at the beginning of this month, with dollars moved increasing by 51% versus a year ago, while the number of payment transactions increased by 44%. It noted that small businesses received $11 billion with Zelle in the same period.
He noted that the move toward real-time payments, and nearly instant settlement, doesn’t just help “eliminate the mental math behind account balances and positing times” for consumers — and prevent late payments in the process. For banks, the move to real-time payments reduces settlement risk and opens several new business cases. Speedier payments also benefit commercial operations, Nagnur said, cutting down the long lead times associated with paper-based transactions.
“To do this, you must be on a modern platform to have fast transactions, and you also need to be able to link invoices with those transactions,” Nagnur said.
As real-time transactions become reality, banks must ensure that these faster payments don’t lead to fraud. This involves applying analytics to data from disparate sources to validate identities and look for signs of fraud — all in real time. The industry is also applying analytics toward other challenges, like making the financial system more inclusive, Nagnur added.
In the U.S. alone, 50 million consumers have no credit score and can’t get traditional loans as a result, Nagnur noted. Initiatives like Project REACh, a collaboration between banks, civil rights organizations and tech firms, seek to improve access and financial inclusion by leveraging different data sources (such as deposit account level information) to assess risk and expand access to products and services in underserved communities.
The future, he said, is about automation and using mobile channels to serve consumers and businesses across any activity from account openings to applying for credit “when and how and where the consumer wants it,” said Nagnur.
“The ability to use analytics and [artificial intelligence (AI)] on modern platforms addresses four dimensions of more accessibility, better speed and user experience, smarter interfaces and customer experiences — all done more safely than ever,” Nagnur told PYMNTS.