Volante Insights

On Open Banking - for the European PSD2 directive, the final Draft of the RTS (Regulatory Technical Standards) was published in February 2017, with a final version expected to be published by early Q4 2017. European banks will now be looking in earnest at how they will go about implementing APIs in their estates to comply with this huge regulatory headache. In order to try and create a standardized public data model for the required APIs to comply with PSD2, the Berlin Group reported at a recent EBA Open Banking Forum that it expects to publish a set of data standards and associated messages for public review in early Q2 2017. The group has consulted with a number of other European industry groups, and this is a welcome move to try and avoid variation in implemented APIs for PSD2.

Similar progress has been made in the UK with the Competition & Markets Authority’s (CMA’s) Open Data and Open Banking initiative, where some of the APIs covering ATM location and Branch opening hours have been published.

SWIFT GPI (Global Payments Innovation) goes from strength to strength. The initiative fully launched in February 2017 with 12 institutions now fully live and the support of two major U.S. payments infrastructures, including the Federal Reserve and CHIPS aligning with the scheme to enable end-to-end tracking of cross-border payments between the different schemes. This initiative does certainly offer real value to global corporates and addresses some of the arguments raised by alternate cross-border payment mechanisms that have been proposed using distributed ledger technology (DLT).

On the subject of DLT and Blockchain, from conversations at meetings and with Volante clients it seems that this technology and its wide scale adoption in Financial Markets is somewhat in the proverbial trough of disillusionment at the moment. I think it’s clear that we will see a really powerful application of this technology in the near future, but for now the noise on how it will change the world has abated somewhat.

And finally, in the Capital Markets the hard deadline for MiFID II draws near (January 2018) and if you haven’t started work in compliance for this wide-reaching regulation covering a broad range of entities and new financial instruments, I would say it’s probably time to start now!

Real-time payments are coming - are you ready?

Having the honor of sitting on the U.S. Faster Payments Task Force gives me - and in turn Volante - valuable insight into some of the challenges that U.S. banks and other financial institutions will face when looking to implement real-time payments (RTP) solutions. I have been a member of the Task Force since 2015 when RTP was merely a concept; fast forward two years and the phenomenon is now being widely considered and increasingly adopted. We take the intelligence gained from interaction with groups such as the Federal Reserve-led Task Force and others around the globe, and combine it with intel from our customers to ensure we continuously build up our RTP knowledge and expertise database. This means that our customers can look to Volante for expert advice when navigating the increasingly complex RTP landscape.

The RTP landscape in the U.S. is quite unlike any other global market. In the U.S. we are not driven by regulation; there is no government mandate to have one single system. There are several and differing RTP initiatives in place and the number of banks looking to implement RTP capabilities is not insignificant. In the UK there are a handful of banks and a regulatory directive, in the U.S. there are thousands of banks that can interact with one or multiple RTP solutions. The fact that multiple solutions will exist in the U.S. market introduces interoperability issues which will need to be addressed in order to achieve ubiquity.

In addition, the business drivers for being able to send instantaneous cross-border payments cannot be underestimated. Our industry has recognized that current processes are antiquated and a solution for sending money instantly, not just domestically but around the world, remains essential. The potential lack of a solution for cross-border payments could risk the U.S. lagging behind the rest of the world.

Whatever position you choose to adopt when it comes to RTP solutions, we’d suggest that sitting back, waiting and watching is not one of them. While there is a clear case for tracking developments and eyeing up newly created RTP initiatives, we recommend you act now to be in a position to quickly and swiftly adopt the RTP solution you ultimately feel is right. Of course, one of the ways you can confidently accelerate your adoption is by working with Volante.

Volante celebrates one year at the new business-centric office in Pune, India

Having already established a technology development center in Chennai and integration solution center in Hyderabad, Volante expanded in February 2016 with a third new office located in Pune, India. Unlike the other two technology centers, however, Pune was established as a customer-centric office focusing on Volante’s payments business applications. The purpose was to create a business-led center of excellence concentrating on the payments business. This meant recruiting people with deep business functional knowledge and expertise of the payments industry.

Pune was chosen as it is considered to be the hub of all payment projects within India. To lead the Pune operation, Volante hired Manish Inamdar as Senior Director Payments Business, and Vikrant Sant, Director Payment Solutions. Manish and Vikrant joined with more than 20 years experience in payments, having previously worked for large firms such as Oracle with its payment partner products including D+H, Clear2Pay, and Dovetail, where they helped implement global payment schemes with top tier banks.

Each team member has more than 14 years of experience gained in the world of payments, and they are dedicated to pre-sales and understanding the customer's language and operations. This information is worked into product design and implementation which helps define the product roadmap for Volante’s VolPay Suite. Since establishing the Pune office just over a year ago, the team has completed over 15 ‘proof of concept’ assignments, numerous RFP responses, and conducted customer workshops for various clients including top tier banks and corporate enterprises from around the globe. Serving such a diverse set of clients and prospects enables Volante to engage a strong best practice approach to building in broad and powerful functionality.

Each team member has more than 14 years of experience gained in the world of payments, and they are dedicated to pre-sales and understanding the customer's language and operations. This information is worked into product design and implementation which helps define the product roadmap for Volante’s VolPay Suite. Since establishing the Pune office just over a year ago, the team has completed over 15 ‘proof of concept’ assignments, numerous RFP responses, and conducted customer workshops for various clients including top tier banks and corporate enterprises from around the globe. Serving such a diverse set of clients and prospects enables Volante to engage a strong best practice approach to building in broad and powerful functionality.

“Through our expertise and work with clients, we have identified several key drivers for change: regulation, new technology, the commoditization of products, and the banking industry’s desire to create ‘payment highways’ with a holistic view of all payment processes. Whatever the driver, banks want a product that is adaptive to their environment, accommodates new programs easily, complies with regulation and is innovative. In essence they seek to dramatically increase business agility through payments technology,” comments Girisha.

Manish adds, “Taking the above into consideration, we have further identified three key areas within the payments ecosystem that must be addressed within a payment hub: the first is acquisition of payments, the second is pre-processing of payments, and the third is how the payments are orchestrated, processed and cleared. Our team is structured around these three areas, with senior management looking at the holistic solution, and smaller internal teams of experts on each of the key areas aforementioned. We operate a similar structure for pre-sales, because we want expert practitioners to be a part of sales cycle, with their knowledge shared with customers and prospects.”

Volante is completely focused on accelerating all processes and tasks associated with payments, so firms can connect quickly and efficiently in a cost-effective manner. Following Volante’s success gained in the integration of financial messaging, the company now operates the exact same way in the payments space. Volante currently supports over 400 payment APIs, so as new payment schemes emerge and become more prevalent, immediate support is available, creating the appropriate technology for people to connect and integrate at speed. An example of this is the recent launch of the VolPay Hub: RTP Suite, in which, aside from the core real-time payments processing and orchestration, there is a growing library of RTP Processor Modules for the various RTP schemes emerging around the globe.

Manish comments, “In working with clients we noticed that their previous experience in payments involved too much dependency on external specialist suppliers to ‘run the bank.’ This has created too many dependencies, complexities and excess costs in dealing with change. In this regard, one of our objectives is to create and evolve payments business applications that enable financial institutions to be empowered to be far more confidently self-sufficient – in charge of their own destiny, if you will. Our research and experience, together with other independent industry commentators, suggests that for every dollar spent on payment transformation software, about $6 to $8 is spent implementing it! A large proportion of this implementation cost is due to integration challenges. We consider this unacceptable and are passionately dedicated to reducing this cost by building clever software products containing automation features. In fact, recent Volante implementations have shown to be around the $1 to $3 range to implement when it comes to integration activities.”