The journey to RTP in Canada
While Canada has been a leader in mobile and app-based banking technology, the same cannot be said for the speed of their implementation of Real Time Payments (RTP). However, the last Payments Canada Summit highlighted some key themes which I feel will drive adoption in the market:
- RTP can be a matter of perception
The Canadian marketplace is unique in that, to the average retail customer, RTP is already here. Customers see real-time updates to their accounts, transfers and requests for payments. However, underneath the slick phone apps and online banking systems, the reality is that many of the banks are struggling to support RTP with their current IT infrastructure.
- With RTP comes greater expectations
Corporate clients are expecting more from their banks. While not demanding RTP in all cases, they are asking for many of the features that have become common across RTP platforms globally. Corporates don’t need payments to happen in ‘real-time’ and they don’t require ‘24/7/365 availability,’ but they do want other features that RTP offer. They want transparency so they know when payments have been made and received. For this to happen, banks are expected to step up and dovetail payments innovation into processing systems to enable new strategies.
- Banks have realised that RTP is only one driver for modernisation
RTP has opened the door to new opportunities for banks and given them a reason to upgrade their current infrastructure. RTP has enabled them to start modernising decades old systems. However, ISO 20022 is much more than just an upgrade to a common messaging format. The new standards will allow banks and customers alike to do much more than just RTP. They will enable data mining and the prediction of future trends, identify suspicious activity more quickly, and will generally allow banks to predict the behaviour of their clients using the ISO 20022 format with AI systems. So RTP is not a driver in isolation – it is part of a much wider picture that encompasses many drivers for modernisation.
With these discussions in mind, we should see a tremendous change in the banking experience in Canada in the near future. I expect my key takeaways for next year’s summit will be very different.