Craig Ramsey of ACI Worldwide provides insight into the development of the largest payments hub in Europe. http://www.ACIWorldwide.com
Banks need to listen to their customers, they need to gain the trust, back, of their customers. It's being diminished over the last few years. They need to offer the services that the customers want, and the banks have spotted that. I've seen conferences where the banks have actually have turn around and said, "I got this great idea on how we can do more business." We are going to listen to our customers. This shouldn't be rocket science, this is basic business trends, basic business demands.
One of the biggest banks in Europe, and they were recognized leaders in the payments space. Banks were desperate to be able to match their capabilities. And, it was a very simple solution that they had. They gave the customers what they wanted. They met their customers' demands. And, one of the things that they did when they embarked on their MTS project with us, was they said, "We have a great solution, but the solution that we offer, the big corporate in one country isn't the same as they are seeing in another country. We want to be able to offer global products in this global market." And, that's what they needed, they needed to be able to offer a global solution while still keeping regional feel, regional care and attention that the customers were needing. So, it's just about delivering what the customer needs.
A big changing in the way that they had to do business across Europe, then they were left without a solution for payments generally. MTS stepped up it gave them everything they needed, it gave them a new payments hub for all of their client projects. And, they've embarked on some clever use of the MTS technology, that we, together with them, have now delivered on, and customers are seeing real benefit of that application. So, instead of using MTS just for cross-border payments, they needed to redesign the entire scope of how they were going to use MTS. MTS is strong enough to be able to have done that. It offered not just a single clearing, which is what they were going to do, but now it does eight different clearing systems, all across Europe. It is a single hub for corporate payments. The single Euro SEPA hub, only ACI and only MTS could have stepped up to that.
They recognized that it had technology, it had capability, way beyond what they were originally intending to use it for. Together, we designed an entire solution for their European payments processing hub. And, now they have that in production. They are delighted with it. It does everything they hoped it would do. They are seeing real benefit. Their client managers, their customers, their entire processes, their straight through rates have all benefited, not just from ACI saying, "Look what you can do."
But, the bank realizing what they can do as well. The bank seeing the vision, and realizing it and delivering on it. They are in-sourcing payments from other banks. They are doing SEPA processing, not just for themselves, but about 20 banks around Europe, now. They are a true hub. Not just for their own payments, but other banks' payments. The corporates are seeing benefits, and, it's beginning to now turn a profit.
We are talking about SEPA as the nirvana for payments processing. It's where we are going to get to certainly. For too long, there has been legacy ACH systems. Those are now going to be retired. People can start to see the light at the very long tunnel, and the light's getting brighter at ?. We will start to see SEPA payments being adopted through choice, not through regulation. Corporates will start to see benefits of them. So, certainly in Europe, we are going to see more and more use of SEPA, more and more standardization of payments processing. With that comes some downsizing of the bank, they lose further revenues. So, what's going to happen is they are going to add value to the payments. They can't offer the same SEPA processing that the bank next door is offering. They have to add value beyond that, whether it be better liquidity for the customers, better reporting, value added services. They will use those services in MTS that we have traditionally used for complex payments processing, in a simple payments for SEPA. Standards will be adopted throughout the world for SEPA is used, to get to this stage in the market.
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