Article

Is real-time banking fast enough?

As more countries bring real-time money movement to their consumers, it raises the question, is real time fast enough?

June 20, 2014

by Mark Ranta, senior product marketing manager
ACI Worldwide

Real-time payments have been the Holy Grail for some time in our industry; with more countries reaching this summit in terms of payment systems and providers bringing real-time money movement to their consumers, it begs the question, is real time fast enough? This past week at our user conference, I had the pleasure of sitting in on a session led by Mercator Advisory Group's Ed O'Brien, who posed that very question in his session.

Stop and think about that for a second, is real time fast enough? In a world where we literally have real-time information flowing freely to our fingertips via our mobile devices, we have reached a point where we are asking ourselves is that enough? In its recent report on consumer banking, "Digital Disruption in Banking: Demons, Demands, and Dividends," a key takeaway that Accenture notes is that nearly half of consumers (48 percent) said that they are “interested in real-time, forward-looking spending analysis.” In this survey, at least the answer to Ed's question is no — real-time isn't fast enough.

Don't get me wrong. In terms of the payments landscape, real-time is as fast as the rails will get, but consumers are starting to want more. Moving money to a friend instantly from my mobile phone has gone from the biggest thing to a 'what have you done for me lately' item. Personal financial management popped on the scene due to the lack of digital organization around where payments were going, taking it a step further — PFM was popular because it allowed users to set up goals based on backward-looking information. 

But what if a provider could help you look forward? You're taking real-time information to a whole other level. A bank, for instance, has the end user's bill payment records, the bank or financial institution would know when the consumer typically pays their bills and how much they are (if they are a set amount), or what they are on average. If the bank could take that information and overlay it on my set budget, they could give me a true analytical look at whether I am setting my expectations appropriately, my probability of reaching those expectations, and how I might alter some spending habits to meet my goals. Taking this forward viewpoint, the consumer can make financial decisions based on a forward-looking snapshot.

Banks have struggled with how to use all the data they have on their shelves, focusing primarily on how they can utilize that information to sell additional products or services. Maybe it is time to focus more on what that information can do if it is handed back to consumers, giving them the tools and information they might not even realize they need to help reach their goals.

So back to our question, is real-time fast enough? In short, you'd better fire up the DeLorean (to 88 mph) and start thinking toward the future. You might not be able to give your clients Gray's Sports Almanac, but you already have information in your possession that is almost as good. 

photo: keith ian wood