PAYMENT MODERNIZATION

EXECUTIVE SUMMARY

• Current payment systems fail to meet customer needs
• Payment modernization affects people, processes and technology
• Payments need to be fast, secure, and real-time
• Delays in payment processing are costly and inefficient
• $6 billion a year is spent on current payment processing by Cdn. businesses
• IBM Payment Centre can help solve these problems

CURRENT STATE

• Payments Canada currently working on multi-year modernization project
• Core clearing and settlement infrastructure is the focus
• A ‘real time rail’ capability will be established
• ISO 20022 standards will be met

PAYMENT TRENDS

• Cheque usage continues to diminish by up-to 9% (2016)
• EFT volume has grown 4% annually
• Business credit card transactions increased 40% in 7 yrs
• Cdn. business still rely on Cheques due to ineffective remittance information in current electronic payment methods

CHEQUING PAIN

• Cheques are the only way to attach remittance information
• Consumes paper
• Difficult to process
• Cumbersome to store
• Non real time manual reconciliation

FAILURE TO MODERNIZE WILL:

• Drive clients to adopt alternatives
• Decrease talent relevance
• Increase legacy costs
• Outdate hardware
• Add additional complexity to process with added manual work
• Limit the ability to integrate systems
• Limit innovation

WHY MODERNIZE

• Increase efficiencies
• Increase speed
• Increase security
• Decrease manual processing efforts
• Stay competitive with global change and pace
• Create opportunity for innovation
• Leverage advantages of a fully electronic system - attach detailed message and remittance data to transaction

RECOMMENDED STRATEGY

• Unify platforms for multiple payment systems
• Increase analytics for greater payment insight
• Evolve payment infrastructure progressively
• Shift traditional payments to digital (Cheque to EFT)

WHAT TO AVOID

• Solving all problems at once
• One solution for all lines of business
• Pure waterfall project approach
• Doing it alone
• Creating proprietary technologies
• One and done approach (iterate)
• Delays in getting started - Don’t wait to modernize

WHY IBM

• Global experience implementing real-time payment solutions
• Cloud based cognitive payments platform already built
• IBM is Resilient, Flexible and Scalable