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Couple of observations Richard, peronally I think the love affair with Direct Debits is not as hot as made out to be, consumers like them for certain thinks such as regular fixed payments (rent), but not so much for variable payments.  If an alternative was available like e-invoicing then DDs would drop of over the next several years.  Also many banks find DD simiply causes lots of customer complaints causing bad customer experieince and cost.

As for batches, surley any bank that wants to survive in the digital age has to get rid of batches and batch processing systems. I agree corporates will keep batches for now, payroll, etc., but that is no reason for banks and indeed the schemes to keep antiquated batch systems, Faster Payments already via Direct Corporate Access (DCA) takes in corporate batches and processes them as individual faster payments.  It would not be hard to put same day or even scheduled payments through FP too.

It’s great to see that ISO 20022 is now accepted as the way forward, however I am concerned at the number of ‘schemes for harmonisation’ that are now appearing.  First back in January 2015 EACHA published their study on Interoperable Immediate Payment Schemes, the EBA responded to the ECB and ERPB call to action with their Instant Payment Forum, and as recently as the end of April the ISO 20022 RMG convened a very inclusive and independent roundtable to discuss and make a plan for Global Interoperability of Real Time Payment schemes, which SWIFT, market infrastructures, associations, vendors and the press were invited to.  Now we hear that SWIFT, not including all interested parties, has also held a meeting to cover the same topic.  I have three main concerns with this:-

1. There are now so many of these interoperable schemes or working groups which are expensive for the industry to resource, surely this is what the ‘International Standards Organisation’ is there for, are they not best placed to bring all the parties together to create a single way forward?
2. Did SWIFT take an all-inclusive approach? Possibly not as they now compete commercially with some stake holders, unlike the ISO and the EBA.  Other parties, including vendors see the good and the bad with standards as we work with them all the time, we have valuable insight and experience and are willing to share.
3. Following on from the above, you have to question if SWIFT is truly an independent standards organisation any longer?  There is already scepticism in the industry, especially as it is developing the Australian NPP immediate payments scheme.

I would encourage SWIFT to make the output public as do the EBA and ISO, including details of participants and key discoveries, so all stake holders in the industry can benefit.

I agree with both Tom and Rik, yes this is a difficult time for banks, immediate payments and PDS2 will change the fundamental nature of financial services.  This is a massive opportunity for banks to take back the central role in financial services, which for many they have already lost. But it requires action, they need to embrace these changes and engage with partners on their terms, not just regulatory compliance.  The alternative is rather obvious.

Ripple may well offer an alternative global solution, and it would be nice for once for a real global standard to emerge, but will the ever so conservative finance industry adopt such a novel idea?  ISO 20022 is tagged as such a global standard, but unfortunately the majority of modern payments systems adopting ISO 20022 seem to be using the standard in a slightly different manner, we will never learn?  There is hope that the ISO 20022 RMG may look into this, so crossed fingers.  Also, given SEPA is just about complete, the world has moved on and we are now all talking real time or immediate payments with many countries doing or building these new infrastructures now.  This is why the EPC is concerned that if all Euro countries build their own real time payments system using ISO 20022 differently, we could lose the benefits of SEPA before it even beds down.

I also agree, targeted investment in back office automation means that banks can gain efficiencies, freeing up budget which can then be used for more innovation.  The alternative is you just keep systems working while piling on more channels and making the cost to income ratios even worst.

The targeted approach is not big bang and can be smaller less costly projects and will also gives clients better information and service levels.  

In my experience you can add in as many new services as you like via cloud or on premises to add new products for customers, but the main issues remain time to market and maintainability, to me this is a very short term approach unless you already have a modern payments infrastructure.  If you have to link your new cloud based e-invoicing system to several back office systems you have a large integration project, which is costly, time consuming, takes a lot of testing and adds to the all too familiar spaghetti.  You are simply building on instability, you have to maintain these new interfaces, adding cost and reducing budget for future innovation. 

Ideally when you add these new services you should also start the process of implementing a strategic orchestration layer and build the interfaces once and properly through the orchestration layer, this ways it’s not a big bang project, time to market is faster, testing easier and you have started the process of modernising your payments infrastructure.  Although this is not a new approach I still find it very rewarding when a banks architect after stating something like ‘we have an ESB, why do we want another’ and doing a Proof of Concept openly change their minds once they see the power of a purpose built payments orchestration solution. 

I often think the confusion is down to the misuse of the term payment hub, in my mind you don’t buy a hub, you build one, whether you start with a new engine and integrate it (and if you don’t use a payment orchestration layer you are just building more point to point spaghetti which immediately becomes legacy) or you use a new payments orchestration layer to speed up time to market for new services and start the process of integrating your existing assets in a far more efficient and sustainable architecture.  

I am more in agreement with Gilles and Daniele, I can't see how you can continue to add functionality and provide the joined up processes and data needed to offer such things as Bo is suggesting without modernising the payments infrastructure.  However that’s does not mean you have to renew the entire platform, its more about orchestrating the services and accessing the data already available within the bank to offer better services.  This is still a major project and needs good, enterprise level approval and planning, but it is far easier, cheaper, less risky and much more achievable than a full replacement project and can be phased to prove success and value along the way.

ISO 20022 is a big step towards a global standard, but you are correct that it will not be the silver bullet once hoped for, just take the SEPA example of AOS.

So although a big step forward which will reduce the formats nightmare, we are some way from the perfect standards world, meaning that other strategies to manage formats and the enterprise payments processes needed for better services, fraud and reporting data will be needed for some time to come.

Spot on Tim, real time / faster payments is the target now, lets hope it does not take another 15 years for Europe to catch up with the rest of the world.

I would agree that there are significant differences regionally and along the lines that mature markets are evolutionary and newer markets are more revolutionary, I also see the revolution in many African countries.  What is also true is that in these revolutionary countries you often see the payments infrastructures also being updated to modern (sometimes real time) ISO 20022 based solutions as they prepare their country to support the trade and transaction banking required to participate in the global economy and grow prosperity.