Banks Look to Automation for Accurate Payments and Better CX

October 25 — Payments providers are increasingly focused on streamlining and automating the validation of bank and payment information in order to reduce payment failures and create a more trusted and transparent experience.

According to a the 2018 Payments Industry Report from Sydney, Australia-based Accuity, the majority of financial institutions and payments providers provide customers with the validation of key payments data elements prior to remittance, and many have invested significantly to automate this process. Moreover, more than one third of the 100+ firms surveyed claimed their customers expected their payments provider to complete such validations on their behalf and bear the costs of payments failure.

“In the digital, real-time economy, customers now insist that payment providers send payments at a lower cost, into more markets, and with greater certainty,” said Sarkis Akmakjian, senior director at Accuity. “The findings demonstrate that the industry is responding to this challenge by embracing technology that facilitates pre-validation services and seamless payment processing.”

The report also discloses that more than half (52 percent) of payments providers experience payment failure rates of less than one percent, and almost all respondents (90 percent) cite a payments failure rate under 5 percent. This is attributable to the way in which payment processors have embraced new technologies to differentiate themselves from other players in this increasingly competitive market. The trend indicates firms have pivoted to focus more on customer satisfaction and are now delivering the fast, accurate and reliable payments demanded by their clients.

However, despite the low payment failure rates, payments providers reported a rise in the overall cost of failed payments, with more than a third of firms reporting an average fee of more than $30, while over 20 percent reported an average $40-50 failure charge. It is likely that these figures are a result of banks’ increased diligence in assessing and passing on fees, driven by tighter margins. The broader geographical disbursement of payment systems could also be contributing to payment failures in jurisdictions where payment systems are not as familiar.

Driven by competitive pressures of the current market, 93 percent of firms cited maintaining their reputation and relationships with customers as a top priority in 2018. Similarly, 87 percent of respondents stated that minimizing the risk and exposure of failed payments as a key priority, as this would enable them to build greater trust with customers.

“The adoption of new technology has the ability to reduce friction, and ultimately cost, in the payment process, but more importantly, it is enabling payment providers to become more customer centric,” said Akmakjian. “The significant shift towards automation is key to meeting the dual-fold challenge of keeping up with the pace of regulation, while simultaneously winning customer satisfaction.”

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