The International Payments industry is being disrupted. High growth new technologies and payment methods were high pre covid. However, Covid has seen an explosion in this growth. Many banks and other providers were well behind in addressing digital customer experiences, automated regulation and compliance and straight-through payment processes. Banks have been moving towards fintech partnerships and once again need to accelerate this process.
Global B2B international payments are expected to total $150 trillion annually, the total cross border segment is estimated to hit $156 trillion by 2022. Banks still service the lion share of this market and have a great opportunity to increase their customer satisfaction and reduce processing costs by adopting new technologies within the international payment and cross border segment.
With an estimated 10,000 new entrants in the last 5 years in the international payment space, the need to increase service to current customers is imperative. The largest segment of cross boarder flows comes from business customers need the ability to be able to place, spot, forward and limit orders online on a self-service basis.
Banks who are using feature-rich and scalable cross border payment platforms are seeing increases in flows and customer retention. Additionally, the use of new technology provides the banks additional options to be able to utilise real-time and cost-effective payment rails as more and more companies provide real alternatives to the current SWIFT network.
Banks must offer international payment services to be able to complete the full suite of services that are offered to both business and retail clients, so need to do so in a cost-effective, user-friendly manner.
Banks globally still use legacy systems with no automation and a lot of human interaction is required when the banks end customer processes an international payment.
Opportunities for Banks when it comes to international payments:
Increase Customer Experiences
- Offline or poor customer experience, the end customer doesn’t have the ability to transact on their own. - Provide a responsive online self service portal.
- Slow systems and manual processes lead to customers becoming frustrated. - Move to the cloud to ensure scalable and secure processing.
- Expensive due to the inability to utilise other payment rail providers. - Implement an agnostic technology stack that comes with pre built and iterative connections to the best payment providers worldwide.
Replace Legacy Systems and Practices
- The rapid pace of system innovation has resulted in market participants becoming uncompetitive and inefficient. - Integrate a full stack application that covers customer on boarding, FX conversions, payments and compliance.
Lack of Alternatives
- Many banks, money service businesses and remittance providers have continued to rely on traditional payment rails and have not offered alternative cost-effective solutions that are demanded by customers in this modern era where innovation is essential.
- Banks are often perceived as lacking innovation and partnerships, although this is now changing and the wealth of third party technology providers in the market provides banks with an opportunity to leverage entrepreneurial technology that is often built by market professionals.
Reduce Cost and Lengthy Time to Build Internal Systems
- Resulting in high overheads, missed revenue, missed sales opportunities. put the viability of these businesses at risk. Internal builds can be difficult for non core products. With Fintech companies maturing and understanding the complex data and security needs that banks are held to there is real opportunity to take modern out of the box products for segments of the bank allowing bank technology teams to focus on core activities.
- Increased focus and costs in compliance require innovative integration. A platform must operate in an environment where segregation of duties and robust checks and balances are available. There is an increasing opportunity to integrate with third party cloud based compliance providers, ensuring that no payment goes unchecked.