Jan 30 - Fundtech, a market leader in global transaction banking solutions, has revealed the results of a recent survey on banks' sentiments towards Dodd-Frank section 1073, which mandates transparency around costs, timing and repudiation for consumer cross-border transfers. The study exposed widespread sentiment that Dodd-Frank 1073 will have little benefit for consumers but will have far-reaching negative impacts on the payments business.
Conducted in December 2012, the survey showed that nearly 90 percent of banks expect that Dodd-Frank 1073 will have a negative impact on their payments businesses. Less than 5 percent of banks believe that the regulation will have a positive impact. When asked whether the regulation will deliver the intended benefit to the consumer, 52 percent of respondents stated that it would have more of a negative impact than a positive one. Only 2 percent of respondents felt that the regulation would deliver the intended benefits.
Dodd-Frank 1073 mandates that consumers are given 30 minutes to cancel cross-border transactions - however, only 2 percent of banks state that consumers rescinding orders is a frequent occurrence. Of those banks that knew the frequency, 43 percent state that consumers never rescind orders.
Nancy Atkinson, senior analyst at Aite Group, said, "We've also found that most US financial institutions expect Dodd-Frank to have a negative impact on their businesses, with our own research finding that 50 percent believe it will have an extremely negative impact. Banks will need to determine the importance of international electronic fund transfers to their businesses and how they will provide these services."
Tony Salamone, senior vice president, U.S. banking product management at Fundtech, said, "Our recent survey validates what we have been hearing from our clients - Dodd-Frank 1073 will be a major compliance challenge in 2013. Fundtech is working with clients to help them comply with new mandates, creating disclosures and isolating consumer transfers to comply with the 30 minute cancellation policy. We recognize the unique challenges presented by Dodd-Frank and are committed to utilizing technology enhancements to ease the compliance burden for our banking clientele."
Fundtech is a leading provider of financial technology to banks and corporations of all sizes around the world. Founded in 1993, Fundtech was acquired by GTCR, a Chicago-based private equity firm. Major product lines are: payments and liquidity management; cash management, financial messaging, electronic invoice presentment, supply chain financing, remote deposit capture, merchant services, credit card gateway products and mobile banking products. The company sells these systems through either a traditional software license or through a Software-as-a-Service contract. Fundtech operates one of the world's largest services bureaus called Fundtech Connect, which addresses the unique needs of the financial services industry. Thousands of financial institutions and companies around the world rely on Fundtech's innovation to improve operational efficiency, increase revenues, and to provide greater competitiveness through business-to-business services. For more information please visit www.fundtech.com.