Volante Insights - Issue 1

Payment speed was a key theme in 2015 with significant interest in the implementation of Real Time Payments (RTP) infrastructures around the globe. Faster Payments in the UK is now a well-established and growing system and its success (along with a number of other country implementations) saw the EU start discussions on how such a payment system could be implemented in the SEPA area.

In the US, payment system change will be driven by the FED as they kicked-off their ambitious payment improvement program which will potentially see the biggest change in clearing settlement infrastructure ever. The Clearing House, a US business providing ACH and Wire payments in the US, fired the starting gun with its intent to build a national real-time payment system with UK payment systems provider VocaLink, provider of the US Faster Payments system.

Most significantly, 2015 also saw the first attempt at standardization of messaging in this space with the Real Time Payments Group publishing an industry body agreed set of usage guidelines for ISO 20022 messages for RTP. These are due to be formally published by ISO early in 2016.

In terms of Regulation, an ever-present challenge for banks and financial institutions, 2015 saw the EU adopt new rules on card transaction processing. Aimed at helping merchants and end consumers, through the capping of interchange fees, these rules will however clearly impact revenues for card issuing institutions.

Hot on its heels in October was the formal publication of the tranche of the European Payment Services Directive or PSD2. This regulation will require banks operating in SEPA to provide access to Third Party Payment providers (TPPs) to enable payment initiation and other services such as account information reporting. Banks will no doubt be considering how they will compete with the TPPs to maintain business with their customers. Neil Clarke, Head of Market Engagement for standards evolution at Volante, provided his thoughts on this topic back in August 2015 for Banking Technology.

2015 saw rapid interest from the sector in blockchain technology as applied to financial markets. In some ways this interest correlated with the upsurge in price of the cryptocurrency Bitcoin which experienced a steady increase in price from the middle of 2015. Though Bitcoin’s decentralized nature may not be to the major banks and regulators taste, the technology behind it most certainly, is based upon the rapid rise to prominence of the R3 consortium that now has more than 40 banking institutions signed up to develop distributed ledger based solutions. There was also significant interest in Ripple labs which now established distributed ledger infrastructure for multi-currency payments and near real time settlement and was showcased for the first time at the SIBOS meeting. Volante was pleased to demonstrate at the same meeting its interface to the Ripple system in the VolPay Hub solution launched at SIBOS.

Industry engagement

Industry engagement is a key element to Volante’s business operations and during 2015 we have been active participants in several key industry groups and market initiatives around the globe including:

Common Global Implementation – Market Practice (CGI-MP) - Neil Clarke, Volante's Market Engagement Director, facilitates the Account Reporting working group of CGI-MP, the industry body whose aim is to establish harmonized guidelines for bank to corporate communications using ISO 20022 message standards.

ISO 20022 Real Time Payments (RTP) Working Group – Fiona Hamilton, Volante's VP for Europe and Asia, was an active participant in the RTP working group which under the auspices of the ISO 20022 RMG is establishing a set of message usage guidelines for ISO 20022 messages used as part of a RTP infrastructure.

Fed Payments Improvement program – Volante is actively engaged as a member of the Faster Payment and Secured Payment Task forces. ANSI - Accredited Standards Committee X9 – Volante has participated in the working group establishing the BTRS (Balance Transaction and Reporting Standard), an updated version of the well-known BAI2 standard.

Media commentary about Volante

We have been exceedingly busy meeting members of the press and have been delighted to see their interest in carrying Volante commentary on the markets we serve.

These include a piece in Forbes titled, “Volante VolPay Lets Bank Business Analysts Integrate Digital Payments”; and another article by Banking Technology titled, “Volante launches ‘Babel Fish’ for financial messaging transformation” which looked at how Volante helps firms transform and integrate different message standards within the payments industry.

Volante by-lined articles

ISO 20022 continues to be a hot topic in the financial world, and to help clarify the complex world of ISO 20022 messaging, Volante submitted a number of articles on the topic including a very well-read ISS-Mag guide on ISO 20022, and a three-part series on the path to a successful data integration project. In another article we looked at what it means to have harmony in the standards world.

The Banker Middle East, a publication continually focused on key issues affecting the banking community within the region, chose to publish our thoughts on a few key topics including “Getting ready for the real-time revolution,” “Cash is king, but agility is money,” and “Don’t be afraid to differentiate your digital payments processing architecture.”