US Banks Prioritize Faster Payments, According to Volante Technologies Survey
In a recent survey conducted by Volante Technologies, mid-tier US banks have voiced their urgent need for faster payment networks, according to FinTech Magazine. The survey, which included insights from over 70 mid-ranking banks and credit unions with assets ranging from US$1 billion to US$50 billion, revealed that nearly four out of five (78%) American financial institutions consider increasing the speed of payments a «must» for their organizations.
Erika Bauman, Director of the Commercial Banking & Payments Practice at Datos Insights, emphasized the growing interest in real-time payments and the significant adoption rate of real-time payment usage across networks. She noted, «Once seen as a ‘nice-to-have,’ 24/7 real-time payments experiences are increasingly a core requirement for consumers and businesses.»
With the launch of the FedNow Service in July, most institutions have solid plans to integrate with FedNow, showing a 50% year-on-year increase in those planning to connect within the year or sooner. Additionally, over a quarter of institutions planning to connect to The Clearing House Real-Time Payments (TCH RTP) network expect to do so within the following year. Connecting to either or both of these networks emerged as the top modernization priority across all asset tiers.
Replacing legacy wire payment processing systems ranked second on the list of modernization priorities. This shift is likely driven by the Federal Reserve’s deadline for organizations to adopt the global ISO 20022 messaging standard by March 2025.
In the ACH (Automated Clearing House) realm, respondents were less focused on system replacement but identified rising ACH volumes as their most significant challenge, along with issues related to reporting and fraud.
Volante’s research also highlighted the increasing popularity of cloud and Payments as a Service (PaaS) solutions. Half of mid-tier institutions were already using or implementing PaaS, marking a significant increase from just 11% in 2021. Payment system interoperability was identified as a top concern by 92% of respondents, a consistent finding over four consecutive annual surveys.
Deepak Gupta, EVP Product, Engineering, and Services at Volante Technologies, emphasized the industry’s shift towards PaaS as the fastest and lowest-risk approach to achieving payments modernization. He noted, «Financial businesses now realize that providing superior payments services, specifically instant and real-time payments, provides an ideal way to meet their customers’ shifting needs.»
The survey conducted by Volante Technologies highlights the growing importance of faster payment networks for US banks and financial institutions. With increasing interest in real-time payments and a focus on system modernization, these institutions are keen to meet the evolving needs of their customers in the digital age.