CASE - Auricles and Ventricles of Payments

KPMG's report - insights to global payments titled "The beating heart of Banking" indicates reversal of priorities on payments agenda, which points to opportunities and threats faced by the industry in the coming years.

Future tests strength of basics. Moving priorities from innovation to efficiency, identifying silos - organizational and technological- as barriers to efficiency, realization that low value payments carry high value in volumes and offering end to end transparency to customers - listed in the report indicate the move towards the fundamentals. These traits are not post turmoil revelations, it was there for years together, probably missed out in the hype oriented trajectories, due to up-looking behavior towards so called neo-payment methods and futuristic visions, blurring current co-ordinates.

Basically payment needs of customers are centered around time, trust and cost, where as banks needs are CASE based - (Compliance, Accessibility, Scalability and Efficiency).

Compliance not only on emerging payment regulations in various geographies, compliance to common standards (convergence), compliance to risk management practices, compliance to privacy needs of customers, compliance to information sharing inline with FATF/OFAC guidelines.

Accessibility maps to reach of bank in payments space, the question of reaching Bank A in geography B for payment in currency C within time D spending E dollars. Accessibility points to predictability also. If reachable, when ?. It points to transparency on cost, if reachable within time D, then at what cost ?  This is critical for success of a global payment network. The cited report has mentioned that top 10 global banks if agree, can provide global reach without resorting to any of the existing payment networks. It is not development of parallel global network, it indicates seamless reach-ability with low hopping costs across geographies considering multi entity environment of global banks interconnecting continents.

Scalability - The power to pump up in times of need without linear resource mop up. Margins being concern in payment markets in an environment where external stake holders including governments are pushing banks to offer low cost options, bank need to look at volumes to meet the internal stakeholder expectations. Partnership comes in here, where banks acts as payment factory for all payment needs of clientele and partners including competitors from banking space.

Efficiency - ran over by Innovation is back to centre stage, where innovation is identified as next step to efficiency. Improve then Innovate is the mantra. Efficiency questions legacy, thrashes siloed organizations, applications, processes and people. Replacement of legacy silo systems by integrated applications not only addresses seamless operational requirements, it addresses peripheral challenges on availability of multiple skill set, complex vendor management including vendor viability, high cost of maintenance and operations. Efficiency is primarily on automation, but not entirely dependent on automation, it could be change in process, could be adoption of new payment schemes, could be consolidation of operations.

Banks meeting CASE will meet customer needs on time, cost and trust. In fact, CASE is the four chamber of beating heart of banking - Auricles and Ventricles of payments.