Payments
Pre-Processing: A Vital Cog in the Wheel for Modern Banking
The financial landscape is evolving at an unprecedented rate, spurred by technological advancements and changing customer expectations. At the heart of this transformation is the Payments Platform which both banks and financial institutions (FIs) need to modernize quickly, a process in which payment pre-processing plays a pivotal role. This blog delves into how pre-processing acts as a crucial enabler, not just facilitating smoother transactions but also enhancing customer satisfaction and driving sales of payment-channel-related products.
The Complexity of Modern Financial Transactions
Today's global financial marketplace is a complex web of transactions and messages coming in varied formats and standards. For banks and FIs, this diversity presents significant challenges in terms of identification, validation, transformation, and downstream routing of these transactions. The process is time-consuming, costly, and fraught with risk, highlighting the need for efficient Payments pre-processing solutions. Banks today have multiple channels from which payments are initiated. These could include Internet Banking, Mobile Banking, Kiosk/ATM, Host-to-Host, API banking etc. When payments are initiated from multiple channels a good design pattern is to centralize all payments pre-processing and validation rules in a single layer rather than replicating this across channels. This is where the Payments pre-processor plays a key role.
Payment Initiation and Customer Expectations
In the digital age, clients demand an intuitive and seamless experience for making payments. They expect:
• Real-time validation of input data to ensure that transactions are processed without delays or rejections.
• A seamless online digital experience that eliminates the need for manual intervention.
• A reduction in transactions undergoing Non-STP (straight through processing) flow, thereby streamlining the payment process.
• Pre-validated templates to accelerate payment flow and enhance the overall experience.
What Banks Need
To meet these client expectations, banks require a comprehensive solution that offers:
• Upfront validation of originator details, debit account limits, and channel limits.
• Real-time validation of beneficiary accounts, especially those involving third-party banks or providers with beneficiary-validation APIs.
• Immediate verification of payment rail eligibility is based on various factors such as beneficiary preference, country, currency, amount, and purpose.
• Transparency on fees, charges, and foreign exchange rates for the payment initiator.
•Bulk payment file format validations at the time of upload.
iGTB Payment Pre-Processing
The iGTB Payment Pre-Processing is designed to address the needs, offering a range of features across the payment value chain:
Transaction Acquisition
• Support for single transactions, batch processing, bulk files, standing orders, future-dated transactions, and file format transformations.
• Onboarding of customer-specific and downstream bank payment engine formats.
Payments Validation & Enrichment
• On-screen validation and inquiry APIs for channel interaction.
• Data enrichment and scheme validation to ensure compliance and accuracy.
• Beneficiary name account and virtual address validations.
• Rebuking transactions as per customer submission for efficient processing.
• Validation call-outs to third-party APIs such as SWIFT GPI Pre-validation, UK confirmation of payee etc.
Integration to Payments Engines
• Seamless handoff of transactions to bank payment engines, including batch and future-dated transactions..
• Transaction status updates and enriched information for comprehensive monitoring.
Key Highlights of iGTB Pre-processing
• A robust message repository supporting global and regional standards.
• A rule engine for centralized payment validation rules and smart determination of payment rails/routes.
• Process orchestration for channel workflows, batch and bulk payments, and API calls.
• Real-time monitoring for transactions and system health, ensuring operational efficiency.
Why iGTB Payments Pre-processing Stands Out
Strength in Delivery
With over a decade of implementation experience across multiple banks, the iGTB team brings unparalleled expertise to the table. This, combined with a strong foundation in channel and payment hub technologies, ensures a smooth and efficient implementation process.
Documentation and Process Excellence
iGTB's thorough documentation, user experience guides, and training materials streamline the implementation process. Agile methodologies and strong governance further enhance efficiency and effectiveness.
Integration and Product Accelerators
The solution offers standard adaptors for backend engine integration and a versatile iTurmeric (https://i-turmeric.com) Integration Layer, facilitating easy integration with various channels (breaker 2) and engines. Out-of-the-box API adaptors, user journeys, rules, validations, and process flows expedite the deployment process.
Flexibility in Partnership
iGTB prides itself on being a flexible partner, prioritizing the interests of banks and bringing experienced resources to the team. This approach, coupled with a high Net Promoter Score, underscores iGTB's commitment to customer satisfaction and success.
In conclusion, payment pre-processing is more than just a functional necessity; it's a strategic enabler that allows banks and financial institutions to adapt to the digital age's demands. By offering real-time validations, enhancing customer experiences, and streamlining transaction flows, solutions like the iGTB Payment Processor are not just cogs in the wheel—they're driving the engine of modern banking forward.
Frequently Asked Questions
Payment Pre-Processing refers to the series of steps taken before a payment transaction is finalized and processed. It includes validation of transaction details, such as the originator’s information and the beneficiary’s account details, along with compliance checks and format transformations. This process is crucial in modern banking as it ensures that transactions are processed efficiently, securely, and without errors, thereby enhancing customer satisfaction and driving sales of payment-related products.
By implementing real-time validation of input data and pre-validated templates, Payment Pre-Processing significantly reduces transaction delays and rejections. This process provides a seamless online digital experience, eliminating the need for manual intervention and reducing transactions that do not follow a straight-through processing (STP) flow. Such enhancements lead to a faster, more reliable payment process, improving the overall customer experience.
The diversity of transactions in today’s global financial marketplace, coming in varied formats and standards, presents significant challenges for banks, including the identification, validation, transformation, and routing of transactions. Payment Pre-Processing addresses these challenges by centralizing the validation rules in a single layer, which helps in managing the complexity efficiently, reducing processing time, costs, and associated risks.
The iGTB Payment Pre-Processing solution offers comprehensive features across the payment value chain, including support for various transaction types, and downstream bank payment engine formats, extensive validations and enrichments, seamless integration with bank payment engines, real-time monitoring, and a robust message repository with a centralized rule engine.
Yes, Payment Pre-Processing significantly reduces operational risks by ensuring thorough upfront validation of transactions. This includes checking originator details, debit account limits, real-time validation of beneficiary accounts, and verification of payment rail eligibility. By catching errors and discrepancies early in the payment process, it minimizes the chances of fraudulent transactions and compliance breaches. Additionally, the process supports real-time monitoring and validation call-outs to third-party APIs for enhanced security and compliance, thereby safeguarding against operational risks and enhancing the reliability of the banking services offered.
Perspectives
Ask Your Questions to Our Expert
Simon Packham
VP/CIO for Commercial Banking, Payment and Intria Technology, CIBC