Regulation, Opportunities and Accelerating Payments Transformation

Last month, Icon brought together payments professionals from across Europe and the US for our 3rd IPF Day. Amid regulatory pressures, increasing competition and evolving business needs, the event served as an invaluable opportunity to connect our bank community, sharing key learnings and success stories, as well as future requirements for the Icon Payments Framework (IPF) roadmap.

Takeaways from this event and our recent work with clients are:

Embracing Instant as a catalyst for Modernisation

With the deadline for the EU's Instant Payment regulation fast approaching, European banks have just a few months to ensure they can receive instant payments before the implementation date, and many are at different stages in their transition.

This should be no surprise given that SEPA Instant has been available since 2017. Globally, the number of real-time payment systems continues to rise, with 70 schemes already in operation and several more, like Canada’s RTR, expected to launch next year.

Addressing these changes in isolation is no longer viable, as it can result in missed opportunities to differentiate products and services, reuse shared technology components, and optimise the application landscape.

From our experience, banks have used Instant Payment initiatives as a springboard to modernise their end-to-end application landscape. Adopting modern, cloud-based, scalable, and cost-efficient technologies to build next-generation payment platforms is key to maximising the benefits of ISO 20022, ultimately enhancing return on investment.

Launching into a new payments landscape

Banks are keen to innovate to improve payments services for their customers. With IPF, engineering teams can use features to address long-standing challenges with legacy technology and, very importantly, accelerate in-house development, which means they can innovate more and faster.

Business models and strategies are under constant review. Faced with tightening profit margins on account-to-account (A2A) payments and intensifying competition from Fintechs and big techs, revenue opportunities from payments and freeing up resources has become a priority.

This is highlighting the value of strategies like Payments Processing as a Business (PPaaB). By offering a way for banks to leverage their technological and regulatory assets to deliver value-added services, and protect ground from new market entrants.

IPF updates

• a working demonstration of Business Activity Monitoring which provides a detailed health report of payments processing on IPF platform and allows remediation actions to be taken early,
• an overview of the Reachability service that allows determining different possible routes the payments can take based on bank preference, industry membership data and dynamically maintainable configurations.

• verification of Payee (VoP) which is a regulatory requirement in some markets enabling payment providers to validate that the beneficiary of the payment matches the account number prior to making the payment,
• additional scheme packs including some for the North American and Asian markets,
• and the extension of our rules manager to include a validation language which allows non-technical users to define validation rules in a commonly understood syntax that can be reused in parts of the flow to insure consistent validation when necessary.

A connected banking community

We undertake initiatives such as our IPF Days because our customers play an important role in the development of IPF. We give payments professionals a forum to openly discuss and learn about new ideas and strategies that will help them to navigate industry changes, and ultimately, deliver better payment solutions.

By bringing the payments community together in this way, we are also working to ensure that we deliver future-proof payments technology that helps our customers to differentiate themselves and capitalise on emerging opportunities across existing and new markets.

To find out more about IPF, get in touch with the Icon team today.