#USA #Scottsdale #Cornerstone Advisors #Payments Revenue #Faster Payments

Introduction

A recent study by Cornerstone Advisors has shed light on the untapped revenue potential for banks regarding faster payments. Despite the fact that nearly 75% of U.S. deposit accounts are equipped for real-time transactions, a staggering 80% of financial institutions remain complacent in a 'receive-only' mode. This has resulted in a significant loss of potential income, particularly in an era where technology can enhance service delivery and client satisfaction.

The Study Overview

Titled "Monetizing Faster Payments," this research report underlines the challenges and opportunities within the financial sector. It is the first volume in a series promoting innovation in payments within banking, commissioned by Matera. One startling insight from the findings indicates that merely 11% of the surveyed institutions foresee the ability to monetize business-to-business (B2B) instant payments within the next three years, while only 6% anticipate generating revenue from retail-focused payments.

Key Areas for Growth

The study identifies four primary areas where financial institutions can drive growth through monetization of faster payments:

• - QR Code Bill Payments: Utilities and service providers can leverage QR codes to reduce card fees, which could be lowered by as much as 40%. Such changes not only simplify payments but also enhance cash flow.
• - Instant Payroll and Workforce Payments: Employees value instant access to their salaries and reimbursements. By adapting to these demands, firms can boost employee satisfaction while unlocking new fee structures.
• - B2B Supplier Payments: Businesses are willing to pay a premium for faster settlements, which can effectively replace traditional and costly payment methods like couriers and wires.
• - Treasury and Liquidity Management: Real-time sweeps and on-demand transfers empower companies to optimize their cash flow and minimize operational costs.

A Shift in Mindset

Ron Shevlin, Chief Research Officer at Cornerstone Advisors and the report's author, emphasized that faster payments are not merely a matter of speed; they provide solutions to significant customer pain points like payroll management and supplier transactions. He indicated that financial institutions that adapt quickly can transform what is currently viewed as a cost center into a lucrative service.

An Opportunity for Distinction

The report advocates for a departure from the passive 'receive-only' stance that many institutions have taken in relation to faster payments. Carlos Netto, CEO and co-founder of Matera, highlighted that banks and credit unions have a unique chance to innovate by developing services that solve clients' real problems, thereby differentiating themselves in the market.

Practical Implementation

To capitalize on these insights, financial institutions must embark on intentional product design and developmental changes. The challenge lies in rethinking existing payment capabilities into impactful customer solutions. Key vertical markets such as hospitality, healthcare, and transportation are prime candidates for these innovations, suggesting vast potential for growth in what has traditionally been seen as a rigid financial framework.

Conclusion

The path is now clear for financial institutions to leverage faster payments effectively. By breaking free from outdated practices, they can tap into significant avenues of revenue and establish themselves as forward-thinking entities in an increasingly competitive landscape. The full report can be accessed here.

About Cornerstone Advisors

For over two decades, Cornerstone Advisors has been at the forefront of delivering strategic insights and data-driven solutions to empower financial institutions to thrive amidst challenges. They specialize in a wide array of consulting services spanning from technology system selection to performance enhancement.

About Matera

As innovators in modern banking technology, Matera supports numerous large financial organizations with cutting-edge solutions for Core Banking and Instant Payments. Their expertise has positioned them as trusted partners for some of the world's largest institutions, shaping the future landscape of digital finance.