Volante Technologies Annual U.S. Mid-Tier Bank Survey: Real-time Payments, Wire System Replacements, and Cloud Are Top Payments Modernization Priorities

NEW YORK, May 2, 2022Volante Technologies, the global leader in cloud payments and financial messaging, today announced the publication of its annual mid-tier payments modernization survey report, available for immediate download here.

The study, based on surveys conducted in the first quarter of 2022, provides insights into the current payments operations and future modernization plans of a representative sample of mid-tier banks and credit unions in the U.S. with assets between $2B USD and $25B USD. It incorporates interviews with payments professionals with a wide variety of business titles and seniority levels from executives to front-line operators.

Real-Time and Instant Payments Momentum Continues

The survey results reflect the ongoing generational shift towards real-time payments. Twenty-seven percent of respondents indicated they are already connected to The Clearing House’s RTP® network, almost double the result from just a year ago. Of those not yet connected, real-time is the top missing capability, and 37 percent are committed to joining the RTP network within the coming year. Overall, over half of the mid-tier market should be connected to the RTP network in 2023.

Institutions are also actively planning for FedNowSM, the new instant payment service from the Federal Reserve that is expected to go live in 2023. Thirteen percent of respondents identified themselves as early adopters, saying they will connect to FedNow “immediately.” An additional 16 percent plan to join within the first year. Many are planning to join both the RTP network and FedNow, showing that mid-tier banks see the two networks as complementary rather than either/or propositions.

Wire Systems are the #1 Domestic Payment Modernization Target

Over a quarter of survey participants indicated they are planning to significantly enhance or replace their wire processing system in the coming six to twelve months, nearly twice as many as were involved in ACH replacements. The primary drivers for wire modernization are rising volumes and staffing/productivity challenges, as reflected in the 2021 survey

Fraud is also a pervasive concern for wires, as it is for ACH and SWIFT cross-border operations. Indeed, fraud was seen as a much bigger challenge in 2022, with the number of respondents citing fraud as a major concern doubling from the previous year.

Cloud and Payments as a Service (PaaS) is a Strongly Preferred Modernization Strategy

More than twice as many respondents said they were planning to adopt cloud-first and PaaS approaches to payments modernization, as compared to those pursuing traditional payment hub or legacy system upgrade strategies. Overall, one fifth of all respondents are actively deploying PaaS solutions.

“The overriding message that emerges from the 2022 survey is that while some of the systems in place are working well for the current needs of most institutions, there is strong appetite for modernizing or replacing legacy systems to ensure future competitiveness,” said John Farrell, SVP Global Product Management, Volante Technologies.

“It is not surprising that mid-tier banks are placing a premium on cloud and PaaS modernization strategies,” continued Farrell. “PaaS addresses many of the operational challenges faced by mid-tier institutions. It can help them manage rising volumes, improve staff productivity, and accelerate time to market for innovative real-time payments services—all at a fraction of the cost of traditional payment hub and legacy upgrade programs.”

To read the full survey, surf to: Payments Modernization: U.S. Mid-Tier Banks – 2022. You can also request a complimentary copy at the NACHA Smarter Faster Payments Conference, Volante booth #429.