Secure, timely, reliable, low-cost payment processing and settlement no longer provide a differentiating advantage for a financial institution; it is a baseline expectation and is the commodity element of transaction processing. However, innovative payments channel development and high quality client care offer banks the ability to differentiate their services in this highly competitive market. But the pressures of competition for market share and customer retention are magnified by aging technology, the need to adopt new channels such as mobile, risk management, and new XML-based clearing infrastructures.
Integration and overall visibility into payments and message processing is a fundamental issue. Poorly integrated systems make it difficult to increase the efficiency and profitability of processing, but also a bank’s ability to truly understand the overall status of operations and their market exposure.
To meet these challenges requires a strategic response based on channel and product strategy, operational organisation, and supporting technology infrastructure. From the mission-critical server platform to user-friendly consumer experiences, Microsoft and our technology partners provide payments and messaging solutions in the following areas:
Payment Channels and Mobile Payments
The payment delivery channel and experience is a critical touch point in the relationship of a bank with its customers. Payment channels are increasingly valuable as a means of differentiating the banking experience, but also contribute to client retention and growth of new accounts. This is also the point in the payments lifecycle that is most prone to disintermediation by non-bank providers. People need to make payments, but do they need banks? Whether for retail or wholesale banking, Microsoft and its partners’ solutions are designed to deliver a more innovative payments experience that strengthens the customer relationship.
Payment Operations
Payment infrastructures underpin the very business of banking. As we move from batch to real time, the requirement for real-time analytics and business intelligence becomes more acute. Operations managers need to know about the state of payment operations regardless of client, payment type, delivery channel or settlement method. This is particularly so when clients are becoming better educated about the payments process, and have higher expectations about the level of service demanded from their banks. Furthermore on the investment banking side, lack of clearing efficiency and quality have a direct financial impact. Microsoft and its partners’ solutions are providing the necessary reliability and flexibility so that costs are reduced.
Many banks are implementing modern payment hubs to centralize processing, whereas others are modernizing legacy applications bit by bit. Whether a bank implements a hub or streamlines existing operations, a cohesive integration solution is essential.
Microsoft partners provide solutions for payment hub operations and the necessary application to application integration frameworks.
Financial Messaging
Financial messaging for payments and cash reporting has changed significantly in recent years. Standards organizations are now increasing collaboration and interoperability in data flows and message structures, often around XML ISO20022. As message dictionaries become richer and more reusable, financial institutions have an opportunity to consolidate the management of their messaging infrastructure using tools that meet strict industry standards, yet give flexibility in defining workflows and straight through processing (STP) rules. Efficient reconciliation of all message types is also a significant factor in operational efficiency and risk management.
Financial messaging solutions from Microsoft and our partners address the automation and reconciliation of financial transactions, enabling end-to-end straight-through processing of payments between banks and with their corporate customers. Find out more about Microsoft financial messaging possibilities using the BizTalk Accelerator for SWIFT.
SWIFT (the Society for Worldwide Interbank Financial Telecommunication) is a member-owned cooperative through which the financial world exchanges millions of standardized financial messages daily. SWIFT enables customers to automate and standardize financial transactions to reduce costs, reduce operational risk, and eliminate inefficiencies from their operations. The Microsoft strategic partnership with SWIFT enables financial service providers and mid-size to large corporations using Microsoft technology to quickly and easily connect to SWIFT. Microsoft works closely with SWIFT to deliver deep industry value and simplify SWIFTNet implementation for customers worldwide.