Can I Sign New York Banking Form

Can i industry sign banking new york form later

hello everyone this is way pops from level and I thank you all for joining us here in this webinar focused on disruption and financial services we're delighted to have you here whether you're here from banking retail insurance or any other area of financial expertise just a few housekeeping notes to get us underway during this webinar I want to encourage all of you to make this a very personalized experience by submitting questions to me and our team using the online tools provided well answer as many as possible during our time together today and follow-up on the rest via email after the webinar is over you have any technical difficulties at all use the live support link in your browser to have one of the experts from browning talk reach out to you immediately and finally a recording of this session will be available one hour after the completion of the webinar so send the link to your friends and colleagues and email us directly at payments at level I Oh this session is being brought to you today by level we're a full-service consultancy based on helping our clients succeed through technical innovation we perform a variety of services with expertise and payments and financial solutions design services like UX and customer journey mapping and a variety of software related field including cloud development DevOps and application build again email us at payments at level I owe more information by way of personal introduction I'm Wade Hobbs head of business development and strategic partnerships here at level and I'm pleased to be joined today by my colleagues Greg Lloyd and Mary Mead from the financial services practice here at level as well if you would please take a moment and introduce yourself great thanks ray hi it's a pleasure to meet you all good afternoon again my name is Greg Lloyd I'm a senior director in levels financial services practice my responsibilities include overseeing the majority of our client engagement and managing our relationships where our accounts where we work with all sorts of banks and financial institutions all sorts of payments networks both card and non card merchants and all others in between thanks Greg glad to have you here with us also today we have our colleague Mary Mead with us Mary could you take a moment and introduce yourself please sure thanks Wade so my name is Mary Mead and I'm a famous consultant at level I work with banks and other companies on their payment strategy and I help them implement projects to achieve their goal their goals I'm really excited to be here well thanks very much thanks to both of you and without further ado let's go ahead and get underway with disruptions in the financial services so today we're going to talk about this topic and it's as pervasive in financial services as any other it is disruption and I know a lot of people hate that word and think that it's a misrepresentation of the state of change that's really going on in the industry we're gonna look at it very closely and identify three key areas where we think the pace of change is likely to have a lasting impact on the incumbent market leaders first we'll just talk about open banking and the effects that allowing increased access to bank data is having on experienced creation both here in the United States and abroad next we'll take a look at some of the new entrants in the financial services space we'll pay special attention to technology players who are not native to banking but are creating opportunity and taking leadership roles in the financial space finally we'll round out our disruptor overview with an assessment of the ways real-time payments are going to impact every payment system in the u.s. most payments professionals agree that new RTP systems are going to be complimentary to payment to current payment methods but for how long we'll talk about developments that will continue to bring value in new ways for years to come as I mentioned earlier is really quite a bit of confusion about what disruption actually is and the context we'll discuss today is quite simply the shift that occurs when customers expectations change and new entrants show up to fill that void that creation of opportunity and rapid market conquest could be catastrophic for industry leaders much the same way Amazon has impacted brick-and-mortar retail online streaming services like Netflix have impacted the video rental and cable industry's the ubers impacted the transportation market but in many smaller cases the results are minimal for the incumbent players until over time the small niche opportunities add up and shift customer expectations more broadly then once your customers expect some aspect of your business to be delivered in a different way meaning faster or more relevant or more intuitive you can bet there's a technology that will meet that need we've seen technology advances like artificial intelligence the Internet of Things and interoperable platforms springing up over the last few years and what all this means to you is that you'll need to either move very fast to use these new capabilities or get ready for someone else to do it so now onto our very first topic of the day I'm happy to hand it over to Greg to talk a little bit more about open banking and the role that it's playing within the financial services space wonderful thanks Wade and as we'd said we're going to be talking about open banking here and really as you'll see on my title here this is an opportunity to be a Greenfield for banking so let's first start with the open banking and defining it a little bit really what what is open banking and how does it work the key point here is that open banking is about flexibility and user control now this applies both at the provider level whether it be a bank or financial institution or a FinTech or other third-party provider as well as at the customer level from the bank or financial institution level this is about controlling how data is accessed to by third parties for your end customers so you think about today and methods such as screen scraping where anybody can give away their account credentials and then the third party can screen scrape what's on your website and the authenticated space of your website by pursuing an open banking model you can now as a bank control what information is accessed what data whether it's account data balances payments and transactions information like that the timing around which it's available and how long it's available and then most importantly the security of that data now from the account holder perspective or the end-user perspective again this is all about control the first most important point is giving end-users control and making sure they have the ability to give or not give consent on access so the end user has controlled to give consent for a bank to share their information with a third on top of that the control applies to other areas such as removing access visibility into who has access you may have forgotten about something from a year ago and then again the most important piece is having the trust and faith that the information is being sure it's shared securely so let's talk a little bit about how this is disruptive first off from a bank perspective banks don't very often get brand-new revenue streams we certainly see alternative revenue streams that are in line with things they get today such as real-time payments being a new form of transactional revenue and we'll talk a little bit more about that later but open banking has the opportunity to be a brand-new revenue stream for financial institutions and this is the first brand new revenue stream that's come along in a long time now the revenue opportunity here is with regards to banks offering a value and that value is about more reliable and secure way for third parties to access their data and it's a value exchange of offering that value to third parties who want to use that data in return for revenue opportunities this also provides acquisition opportunities as well for banks that may attract customers if those banks are more flexible and enabled more opportunity and give more power to the hands of their users the second thing is with regards to how financial institutions and fintechs partner now this creates a better pattern for fintechs third parties and financial institutions to partner because it sets a standard by creating set of specific domains specific data and creates some level nests and standards around how that information is shared third this also removes barriers to entry both from a banking perspective sir and a service provider or FinTech perspective the reason is because this allows people and companies to focus on their strengths for example if a company where a pfm provider a personal financial management provider or budget provider in the past they would have to worry not only about their experience and their capabilities from budgeted perspective but they also would worry about how they enable customers to import their transactional data and they might have to rely on again a screen skipping or other capabilities or perhaps one-off relationships with banks this makes it more difficult by offering an open banking model now financial to some financial institutions and FinTech providers can focus on their core strengths give you another example from the perspective of a smaller bank now a smaller bank that might not have the ability to pursue all sorts of different experiences can focus on the ones that are most important to their customer set and they they can more easily partner with fintechs and so that that really creates a lot of disruption and opportunity for all those parties the last one is around increasingly opportunities for innovation through those partnerships that occurs by increasing agility because now the fintechs and the banks can react more quickly they can also implement new solutions more quickly and also by creating those standards and that reliability it also helps people be more comfortable with a base level of information and a base reliability that enables more flexibility above now that we've talked a little bit about how this is disruptive I'd like to give a few examples of specific opportunities that open banking provides first is talking about banking as a service banking as a service offers new capabilities to both fintechs and financial institutions from a FinTech perspective now if in texas or third parties are able to expand the offerings beyond what they might have been able to in the past additionally beyond just having a more capabilities to offer they also have more competition on the vendors they are dependent on specifically the financial institutions whereas today a limited number of institutions typically serve third parties with with their banking charter now buy more banks pursuing an open banking model you have the opportunity for these third parties to look leveraged a more competitive set of offerings similarly from a financial institution now they have the ability to offer white label services or leverage services from other partners to offer within their brand and thus better capabilities and functionality for their customers second big opportunity is around identity banks are traditionally respected and appreciated for the level of rigor and data they put around security and ensuring that the person they're speaking to where the customer interacting is the person that they expect it to be there's an opportunity to leverage this robust nature that comes with being a bank for third parties for example banks may be able to partner with government institutions and others to provide holistic identity services through these API connections and they can do this in a safe and secure manner similarly this could also be used to offer to other smaller third parties for example if you think about today where you might go to a website and you can log on with Facebook or log on with your Google credentials now you might be able to validate your identity through your bank credentials again in a safe and secure method that comes with an open banking framework a third area I like to talk to is data sharing we've spoken a little bit about data sharing already thinking specifically about a PSM our budgeting tool set and how you might leverage that open banking to be able to offer something but think more broadly for example entities such as a credit reporting agency or some of the other third party entities that are trying to create credit reports think of companies like a firm they're dependent on a robust and reliable source of bank data to be able to properly assess a given customer by working with banks that offer a robust open banking model now the services that those companies can offer is can become more reliable and more standardized and therefore more useful and better for the end customer now that we've talked about those three let's talk about a few other opportunities and open banking more generally first off again as I've mentioned before open banking is creating a streamlined and standardized approach today the environment is neither again especially if you think about something like screen scraping that can be a very unreliable if a bank or institution were to change its website that requires rework and so by pursuing up in banking and creating that stable foundation now there is an opportunity for banks fintechs third parties and all others in the ecosystem to take a fresh look at use cases both of the use cases that already exist in our environment as well as looking for brand new use cases that might have been otherwise inaccessible or difficult to pursue in the past secondly with regards to revenue streams again banks have an opportunity to look for revenue streams with regards to the data the security and the trusted position that they currently offer today and they can leverage those capabilities to offer this is a meant to be a value exchange it must be a value exchange it can't be simply charging for something but it needs to be about offering value and again the key points of value that banks can offer in addition to the data is the fact that they should be properly designing these api's so that they're secure and they're consistent and they're well-defined to provide a consistent set of data to the users third from an fi and fin tech perspective now they can better leverage each other's capabilities whereas in the past it might be difficult to think about services how you obtain services that you're not able to offer from a FinTech perspective maybe it's getting access to a banking charter or from a bank maybe it's getting access to the best PSM capabilities or toolsets now it's more easy to leverage each other's capabilities by using this open banking framework both fintechs and financial institutions should take a fresh look at what they offer versus what they might want to offer and pursue new opportunities through partnerships finally and then lastly as I said in the beginning open banking is about providing a Greenfield approach for banking banks syntax and others should leverage hackathons and other methods to recruit gauge and partner with new parties as well as discover fresh ways to use the available api's to better serve their customers open banking should be an opportunity to again take a fresh look at how the industry operates off within banks and outside of banks to figure out what we can all do together to better serve the end-user and land customer with that way I'll go ahead and turn it over to you see if there's any questions well thanks Greg I appreciate that very much and we do actually have a couple of questions in the queue again a reminder to all of you on the phone there feel free to use that ask a question button and send those in we'll take moments like this to answer as many as we can and we'll get to the rest afterwards our first question is a very interesting one concerning risk management the question reads convincing my risk partners to open our platform will be very difficult is the banking industry working on something collaboratively that will help me get buy-in at my institution yeah absolutely that's a great question and there's two pieces really at play here first off to the specific question of whether there are efforts going on in the industry I'd say the biggest one is coming from the Clearing House or our tch-tch is working with financial institutions and others on a fine financial data exchange and they're working with those in the industry to figure out what is the right way and what are the right methods and designs for api's what information should be here shared and how should it be structured and so that's one great example of how the industry is coming together particularly from a perspective of being in a driver seat to be able to design that out so I'd say that's a piece number one the second piece more generally I would say is that open banking is an opportunity for financial institutions to put themselves in the driver seat kritis whereas today in a screen scraping model if a user gives away their user and password any information might be available through the site that as has been a concern of legal risk and compliance partners for some time open banking changes the game now by taking control and determining what you will offer and how you will offer it and making it easier for fintechs and third parties to access your information you're now creating a partnership where you have some control and you're working together with those parties in an active fashion and so I think this should be viewed as an opportunity and this is a way to present best present to those partners to help get them on board and understand what the real opportunity is here sounds good thanks Greg we do have one more question in the queue here and I think this is in reference to some of the comments you've made about Europe during the presentation here the question reads why should I be concerned what they're doing in Europe yeah that's another great question and for those not aware in Europe they've got a regulation called PSD to and there are several others out there as well but I'd say that's the main one and in Europe they've been pursuing a more open model for some time now and while it is true that the US and the European markets are different I think it's important to look at Europe as a leader as well as someone we can learn from and this applies not only to open banking but other parts of the industry as well if you look at real time payments that also has been around in Europe for some time and we'll talk about that again later and open banking the same thing open banking methodologies particularly through PSD to are being pursued greatly in the European Union right now and so we have an opportunity although we're a different market to learn from what they're doing see what's going well what's not going well take the use cases that seem to be getting the best adoption and decide how we'll address those now one more thing to say about that is well in Europe it's been pursued from a regulatory approach in the u.s. I think most in the industry agree that we're looking to take a more organic approach and worry less about forcing things through regulation but more from each bank's perspective try to see how we might be able to put ourselves in the driver's seat again take a more organic approach and how we partner with institutions and pursue a model and so it's really about approaching it from a product product opportunity less about requirement to do something excellent very good well thank you very much Greg for that talk on open banking and if anybody's interested more in open banking I would of course encourage you one ask us questions through the webinar here to reach out to us at directly at level and three take a look in the attachments and links through your bright talk platform there you'll find a link to an open banking architecture design that we wrote some time ago we'll be glad to talk with you about that separately but by all means download that and take a good look at it so now moving on to the second topic and our view on disruption here we'll talk a little bit about the new entrants that show up in the in the financial space we mentioned earlier that as expectations change and technology advances new players who aren't native to the industry will show up and fill in those gaps between what you offer and what your customers really want fintax are realizing there's a lot of money to be made in taking small bits of larger incumbents business so new players are arriving on the scene more quickly than ever Mary if you would please talk a little bit about these new players and how they're finding their fit in the financial services industry sure thanks Wade so Wade alluded to in this section we're going to talk about new entrants causing disruption and financial services so this includes specific examples of new entrants using open banking as Greg talked about as well as some other examples you may commonly hear new entrants referred to as syntax and syntax to cover a wide range of company type the visual on this slide shows some common groupings where we see syntax emerging with disruptive products the groupings include things like payments personal finance lending consumer banking just to name a few the first two examples we'll talk about include personal financial management or PSM app and to banks that are taking different approaches to open banking to give their customers ways to track their spending so let's talk about the partnership between TD Bank and moving first TD Bank has created a PSM app in Canada called TD my sponge which is a separate companion app to the everyday PD mobile app my son was built using move in software and is branded by TD Bank leveraging bank data retrieved from T DS open API TD maintains the customer relationship and the user experience the app looks like a TD app from the customers perspective and they have no way to know that move in software is being used TD my friend securely connects customers to their eligible accounts and tracks and categorizes their transactions customers can use the app to monitor their spending over time and even set up spending notifications and monthly goals TD my friend is disruptive because customers are ultimately happy with the product so happy that the app has number one's thoughts for free money management apps in the Canadian App Store so other banks are taking notice there is a broad opportunity for banks to partner with companies that have ready-made budgeting solutions these solutions can increase customer satisfaction loyalty and even retention rate third parties can benefit from partnering with a bank because banks can oftentimes provide recurring revenue growth and the scale needed to be successful like moving in this example my second example is chasing into its partnership which also leverages open banking for PSM in this case Chase has an API that Intuit consume for their PSM tool meant and Intuit owns the user experience min is a is great for people with accounts at multiple companies who want to unified experience to see all their financial information from banks brokerage firms insurance companies etc previously Intuit would request their customers bank login credentials to screen straight the data usually collecting more data than they needed in order to extract the information that they needed and then populate the men experience with Chase customers into it can now use chases API and directly get the customers financial information from the bank the bank can control access to their data tasting control giving into it only the data that they're comfortable with sharing Intuit can more efficiently get the data they need to populate the experience without extracting additional information the relationship between input and chase can be considered disruptive because mints already considered a top financial management tool and customers are already using the product but Intuit can offer an even better product using more accurate customer data directly from the bank and provide more features also customers will want to bank with Chase because of their open API customers know that their data can can be easily synced with popular products in the more get such as into its products if they think with Chase so into it also uses open banking and data aggregation API to gather information to use within TurboTax as well ultimately there's an opportunity for Bank and third parties to partner to create more robust customer experiences in aggregate financial data all in one place my third example of open banking is a partnership between stripe and Silicon Valley Bank the stripe Atlas product is the tool designed for founders of Internet and technology businesses to get up and running Atlas is disruptive because it offers a simple package for fast-moving startup companies and it provides them with the confidence to move move forward for the flat fee of $500 Atlas includes things like us company registration registering with the IRS for taxation purposes a strength account to accept payments and even a zero balance u.s. bank account in Silicon Valley Bank and the list goes on so stripe is leveraging Silicon Valley Bank for account opening when looking at opportunities to create disruption companies should look at a mutually beneficial partnership in this example straight benefits because adding a business account as two stripes existing capabilities am struck probably didn't want to be in the business of building on an account opening process when they could take advantage of Silicon Valley bank's existing process B to market is important is really important when you consider creating and destructive partnership this relationship is also great for Silicon Valley Bank because it increases the bank footprint and another the number of accounts opened also Atlas founders may decide to deepen their relationship with Silicon Valley Bank and get additional product next let's talk about grab and mastercard this is a newly announced disruptive partnership within the financial ecosystem just like uber and lyft dominate ride handling in the u.s. grab dominates the ride hailing market in Southeast Asia grabs customers can book rides from app and pay through the app with a debit or credit card where customers can choose to pay with cash which is the predominant method of payment in Southeast Asia Grob is partnering with MasterCard to offer prepaid cards to their users in 2019 users can apply for a MasterCard directly via the grab apps and receive a physical or virtual card the prepaid card can then be refilled via linked bank account or or by handing cash to a grabbed driver or a retailer the card can be used like any bank issued MasterCard to buy goods and services online or in shop and the reason why this partnership has the potential to be so disruptive is because according to grabbed three out of four Southeast Asians which is more than 400 million people remain on banks the World Bank claims that just 30 percent on a debit card and nine percent have a credit card so this will be the first opportunity for many Southeast Asian consumers to go beyond cash and use the global card infrastructure the broader opportunity to note from this example is that financial institution can look at unbanked markets and partner with companies that have a strong presence in those markets there may be a growing need or desire for financial services Credit Karma is considered a thin tech unicorn because they have more than 80 million members before Credit Karma obtaining a credit score and understanding your credit was not as easy we had to apply for credit reports from each of the big credit reporting companies like Equifax Experian and TransUnion they only have the purchase our scores directly from each agency consumers are interested in the credit score because it's one of the most important factors in determining their ability to get loans and new credit and it has a major influence on the rate the credit creme is product offers free ongoing access to credit scores and reports from transunion and equifax so customers they can review their score as frequently as they want they can check it for accuracy and even identify ways to improve their score when customers access their credit report Credit Karma suggests credit products based on their current history it also uses credit scores and history to determine which products come with high approval on the company gets compensated by matching consumers with tailored product ads that are based on their credit profile and the likelihood that they'll be approved Credit Karma gets paid for this lead generation based on agreements with its financial advertising partners so to be disruptive Credit Karma they had to successfully predict the needs of their customers and develop a unique product that made their customers financial lives easier I'd advise companies to listen and take customer feedback to heart in order to predict what their customers want in need many banks today they capture things like page level feedback in their digital experiences they have usability studies and even conduct surveys that can be leveraged to understand what customers want and need knowing your customers should help generate ideas on what new disruptive products to build and my last and final example of a disruptive partnership is between ID now and earth tipping ID now is a German company that's developed a way to remotely verify a person's identity via a video chat earth the bank is using ID now product for account opening which now takes less than 10 minutes according to the Australian bank new customers can identify themselves directly via video chat and safe that saves them the time and and the effort that the that was previously required to open an account and in a branch you're probably wondering how does this process work so first customers they take a photo of their ID document and Australian citizens they can use passports national ID cards and driver's licenses to verify their identity for further studying and then second the ID data is transferred to the relevant form then customers can can fill in their personal data and then select a preferred bank branch on a city map using geolocation and lastly the customers identity is confirmed on a video chat so this process it can be done via desktop computers as well as tablets and smartphones this solution is disruptive because customers are becoming more digitally savvy and they expect to be able to do everything from their phone when customers find out that they can conveniently do all their banking at home at any time they'll be happy to switch to an innovative and flexible bank like thirsted Inc as we've mentioned before companies they need to stay in tune with their customers and make their lives easier because as a company you want to be the cause of disruption and not the effect video conferencing biometrics and electronic signatures are starting to become a trend as banks move towards higher digital usership there's an opportunity for banks to partner with companies that offer these products so their customers can have even fewer reasons to visit brick-and-mortar branch so I'm just going to pause here wait do we have any questions from the audience thanks so much Mary that's a very good overview of those new players yes we do have questions in the queue at this point the first question here I believe is going to contrast a little bit between between the build versus buy aspect the question reads how should I make the decision about developing a new tech offering versus trying to partner with a FinTech Mary what do you think of that I think that's a really good question so it should depend on your cuts on your company's circumstances but I can give some some general guidelines so if for the syntax was a great solution already developed then you can go to market quicker by leveraging the existing solution if there's a solution that is already predominantly being used in the market like in the example of chasing into it then you can go with the flow and let your customers continue to use the solution that they're already used to using so you can help contribute data and improve the existing solution through through open API if there isn't a great solution already in the marketplace then it may be your only option to create to create the solution from scratch like in the case of credit Kermit so I think there are opportunities for bank as well as FinTech to create new solutions especially now that banks are employing talented technology team in doing a lot of their own development work in-house all right fantastic good to know we do have one more question in the queue here and this one reads how can I tell which fintechs I should partner with and which ones I should defend against any thoughts yes you want to make sure that you're in a mutually beneficial partnership it's like a marriage in all the examples I reviewed today both parties experienced benefit so the Finch attack could benefit from getting revenue for their solution and and having the opportunity to scale their solution or their experience with thanks data and hopefully get good publicity the bank could look to increase customer satisfaction or loyalty increase their retention gain usership or new customers or even reduced manual processes that occur in in bank branches or contacts Leonard I would say your best bet is to defend against in tax we're looking to get access to bank data and give nothing in return it's so good to have conversation with these fintax and understand their need because it could propel new ideas or help both parties gain a fresh perspective to propose a new and better plan that's mutually beneficial sounds great that's great well I really appreciate all of the discussion about those new entrants into space Mary and before I move on to the final topic our real-time payments topic I would like to encourage everyone please keep the questions coming use that ask a question button in your browser there send over questions whether it's open banking new entrants in the space or real-time payments as we get into here feel free to send them along and we'll answer them winter everything we can during our time together and we'll answer everything else will be an email after the session is over with so please send them in for now though we'll talk about real-time payments and one of the very common themes we keep hearing about disruption is that customers are expecting things to happen faster customers expect everything more quickly from getting packages in the mail to letting their friends know what they're up to on vacation in terms of financial services that begs the question of why it often takes so long to pay a bill or send money to another person a full industry of new entrants has arrived to disrupt the traditional banking and payments market and in the recent months we've seen the incumbents push back with new technologies of their own so at this point Greg I'd like to turn it over to you to talk a little bit more about the movement towards real-time payments great thanks Wade and as you all can see this this lovely map we have up on the screen you'll see that there's already 15 I'm sorry there's already 30 countries live which we time payments today and there's another 15 that are in process or in development recently Australian live the u.s. went live at the end of last year and Canada is coming soon I think in in the first half of 2019 so this is really something that's coming strong and really it will disrupt the industry now before I get into why this is going to disrupt the industry I want to take a moment and talk a little bit about how the solution works and what this is given it still a little bit new just want to give us all a loving pool level playing ground if you will so really what is this real-time payment solution now first off I'm specifically talking about the solution from TCH the Clearinghouse to pardon me now this is the first new rail in 40 years well of course except Discoverer but that was just another credit card network here we're talking about a brand new rail and this was designed and built through collaboration between TC HS 26 owner banks it's powered by vocal Inc who is the vendor between the real-time rail in the UK Singapore and Thailand and they were recently acquired by MasterCard and the most important point here is this is a brand new rail it is truly real-time and it is not just based on some other existing rail whereas some systems today may be real-time in the front end but behind the scenes they operate through ACH or wire or the card networks this is a brand new network that stands completely on its own now this is a push only system and it provides immediate payments and by immediate I mean end to end including settlement and reaching a state of irrevocable 'ti all occurs within 15 seconds and or less and actually the first transaction that occurred last November was I believe 3.4 seconds now this is achieved through a single shared settlement account at the Federal Reserve Bank of New York TCH overseas this account and manages this account but all banks pull their funds based on their size and the expected volume into this single account this system is already live with 10 banks today and there is expected to be maybe 40 more in the first quarter of 2019 and by the way as I mentioned earlier this went live last year which actually have birthday candles here on the slide because a happy first birthday to TCH a solution here because it went live on November 13th of last year so getting a little bit deeper into what the core functions of this system are first off as I said this is a push only system that means there is a credit transfer message to send money there is no pull there is no ability to draw fund out of another person to account now if a customer did want to ask for money there is a request for payment question request excuse me and so a consumer can say I'd like to ask for $50 from Wade because he didn't pay me back for a pizza last night and so I can send that and then weigh it or the recipient would then create a new tread credit transfer message to send the money but there is no way to pull the mic now two other messages here that are very critical to the system are the request for information in the ribbons data one of the most powerful pieces of this new system is the ability to share information and message across the system for a request for information users have the ability to ask a question or send some in from or request some information tied to a payment or a request for payment so for example if I was expecting $600 and I only got $500 rather than in the old days I might have to go through some other vendor solution or I forgot to pick up the phone or text someone and say hey what happened I can now directly in the system send a message why is this only $500 when I was expecting $600 now the beauty of this is not only can I do all the messaging through the system but this is all tied specifically to that payment so everything is linked together I could send a request for payment then send the payment then request information about why the payment was done a certain way another piece of information sharing is remittance advice messaging the system allows a user to send a remittance advice which may be an invoice or maybe some other structured data and send that along with either a payment or with a request for payment and so now next time I request money from someone I can include all the details of that invoice along with the payment and again it's all tied together moving on a couple other messages that are critical are the payment acknowledgement and the request for return of funds starting fresh with the acknowledgment I'll talk more a little bit about this later but the system on its own always provides absolute certainty and absolute clarity that's one of the best parts of this system but what sometimes is missing is the ability for someone to acknowledge that they've actually seen the payment there's quite a difference between me sending Wade the $50 for the pizza and Wade responding and saying hey I got the $50 thanks very much now I know he's seen it and I know we're all square I don't have to worry about him coming back later and saying that I never paid him and so that's really powerful that now users can acknowledge a payment and that this payment sender can now know for certain that the person have seen it nothing going to the request for return of funds as I said earlier the payments here are irrevocable as soon as they settle within that 15-second window they are irrevocable and therefore if I've sent a payment in error the only way to get that money back is to ask for it back so I would submit a request for return of funds and then that would process through that's obviously an important message given that there is the opportunity for customers to make mistakes and so they'll be they'll need to be proper ways to manage that now moving on to the last two here I won't get too deep into these but at a high level the system also comes with a lot of robust messaging to ensure absolute clarity some of these messages whether it be control messages the system notifications or the administrative advice messages some of these are to provide notification on what banks are online or offline at the time some of them are around specific specifically from my bank perhaps my balance in that single funded account is too high or too low there are also messages about my specific as a bank the specific messages I've sent so for example a payment could have failed or a message could have failed because it may have timed out or because there may be a syntax or perhaps a security issue with the digital signature of that message and so the beauty of all that messaging that real-time messaging that comes alongside this real-time payment is that they ensure that there is always absolute clarity to any message in any payment in other words if a to give an example if I sent a payment and within 15 seconds didn't-didn't clear through it would timeout and automatically fail tonight we've got a solid understanding of the core functions of our TP I'd like to move on to talk about how this is disruptive so first number one key point here is that there's our instant and irrevocable payments and again this is end to end including settlement from the moment the payment is submitted into the system the moment it's back fully acknowledged both the sender has the money pulled out the receiver has the money in their account and both banks are square is 15 seconds absolute maximum and so that instant and irrevocable payment is hugely valuable in a lot of areas I'll talk a little bit about some of them in a moment when I get specific to opportunities but this is disruptive because this really helps reduce the risk and the complexity on the uncertainty that comes with many payments today second thing as I said earlier is now as part of this being instant you also get a guaranteed status as I talked about the messaging with being having canceled payments if it doesn't clear in the appropriate amount of time now I know it's in 15 seconds that that payment has been received I have a guaranteed status knowing that there's no more concerns with payments that are in a limbo or in process States for longer than a few seconds and so therefore particularly in business payments where that certainty is critical you now can get that certainty crisply clearly and quickly within your systems third thing is again as I said about sharing information in the communications now because I can do this all within a single system within my bank I can now ask questions get invoice data confirm an amount confirm why something's different and do all that within my solution solution and so that has the opportunity to reduce the complexity that comes with a multi-layered approach that typically exists in some areas of Bank of payments today so moving on let's let's talk about some specific opportunities I'd like to start with business payments b2b payments are considered one of the primary targets and one of the key opportunities for our TP the reasons are a few fold first off it's the timing as I mentioned earlier the absolute certainty and the absolute speed of RTP payments is hugely valuable to businesses you think about paying a supplier you think about waiting for your goods to be delivered perhaps I've got a you know I've got some big delivery to put out today and I need to make sure that all the supplies I need to get out that delivery are on time now the suppliers not may not give me the supplies unless I've got the money and by having real-time payments where I can see AB for absolute certainty that they have that money helps clear up a lot of confusion secondly it's also the complexity across multiple parties and also no multiple channels where today I might have multiple suppliers and we might be using different vendor solutions for different things whether it's on the receivable side of the payable side now will helping simplify that on top of communications that may occur outside of those solutions such as a phone call or an email and so the revenue opportunities here are huge but again similar to open banking this isn't a revenue opportunity simply for the sake of being able to charge for something but it's critically important to tie it to value and there's a lot of opportunity to provide value to businesses in this area by leveraging RTP and so there's a huge opportunity for value exchange secondly there's also some opportunity to think about how businesses use third-party solutions today that might be a little bit on the ERP and the accounting side but also especially on the software solutions that specifically target accounts payable and accounts receivable and the whole source to settle process now on that I don't mean to imply that there's a huge threat though there there certainly some impact to some of those providers but on the positive side there's actually a huge opportunity for banks and for these two providers to talk about partnerships and how they can better work together those companies exist for a reason and they provide great value and although banks now have more opportunities and more options to provide more services to customers there's still a huge opportunity for banks and those vendors to provide value together and so I think it's huge opportunity to think about how they can do that now on the smaller corporate side you think about smaller smaller businesses small to medium enterprises where they don't have all the they'd love to invest into software and solutions to help them manage their business and so you think about those types of businesses where they might not have a full ERP or accounting suite or they might not have a full suite of software around their accounts payable or the accounts receivable or anything along those lines now by a bank now being able to offer this real-time payment solution now the bank is able to offer something to those businesses that is critical to helping them manage their business better now with in the past they might have been able to afford the proper solutions now they can leverage something directly from their bank that helps with payment certainty the speed of payment but also the messaging and the data around those payments and so really the greatest disruptions here and the greatest opportunities are that there's greater competition opportunities for allies there is some impact the non fi offerings but again I think that also creates opportunity for partnership and third there's reduced clutter around the communication and information sharing and so with that I'd also like to move on to some other opportunities for our TP first I'd like to talk about Bill peg they'll pay is a huge opportunity for real-time payments for a couple of reasons if you think about real-time payments in the world today and Bill Pay Bill Pay has done one of two ways usually either a customer will go to their banks built a website or they will go to their biller website one of the more common reasons customers will go to their banks or excuse me their billers website to make a payment is because they want to know that the payment will be immediately applied and they want the acknowledgement or confirmation from their biller that the bill has indeed been paid but if you think about what I mentioned around our real-time payments and the finality and the absolute certainty of it and also the ability to have acknowledgments this creates a new opportunity to create new Bill Pay experiences using real-time payments and directly address thos points that often lead customers to make bill payments at their billers website second one moving on to real-time retail point of sale retail point of sale is an interesting one now like many of you I've been in the payments industry for a long time and I'm not so naive to think that the real tech retail point of sale iron men can change overnight and so I don't mean to imply that change there will incur in that next one to two or even the next three to four years I think this one will certainly take time but I also believe that with a new payment rail coming out particularly given the speed and the certainty and the other benefits that come with it there is certainly opportunity for it to apply in a retail point of sale environment and so I think there certainly are opportunities that are already being explored by retailers and admittedly they will take time but I still nonetheless believe there is an opportunity there third one's a little bit easier when we talk about e-commerce in the retail point of sale environment you have to worry about adjusting all the hardware the card readers all the other point-of-sale hardware that is in play in today's environment ecommerce is a little bit easier because you only have to worry about a website and changing some code and so I think the e-commerce environment is similar to retail point of sale but it can be it can be addressed a little bit sooner and I think similar to how you have other payment options trying to work their way into e-commerce sites I think there's certainly an option for real-time payments to find its way into the e-commerce space in a little bit faster fashion I think this is still a couple years away at least as the industry contended option by others in the market but I nonetheless believe this is an opportunity with that I'll go ahead and turn it over wait for any questions we have from the audience well thank you Greg appreciate the primer on real-time payments we do have some questions here from the audience we'll go to the first one a big part of what you talked about here was the Clearinghouse and so our first question here reads this way you've talked a lot about the clearinghouses RTP solutions but are there are other real-time solutions in the market that's a great question Wade there are certainly other options out in the market first I'd say there's others that mimic real-time and so I think first we have to start with the definition of what is real-time if you talk about real-time payments and what I've been talking about here it's real-time payment real-time settlement everything as we said is instant within 15 seconds the whole kit and kaboodle and it's irrevocable but if you loosen the definition a little bit you could think about things like venmo and zell in other cases where it mimics a real-time customer for the end-user but on the backend the payment may still flow through ACH or card rails or some other method that isn't truly real-time as far as the settlement of the payment and the finality of the payment and so I think those are a couple examples where there are real-time mechanisms although it's not as comprehensive as this new rail other examples could get into the distributed ledger and blockchain space if you think about ripple and things that they offer that's certainly another real-time payment mechanism again depending on how you define it so I think that's part of the answer that being said though there are certainly other options the Fed has recently issued a request for comment actually and they're seeking feedback in a couple areas around real-time payments and so I think there's many in the industry that are looking at what the feds doing what they're requesting comment for and trying to understand what role they may plan I certainly wouldn't mean to speak for the Fed but I think to some degree it appears they're trying to figure out what's the best role for them to play as well and so that's another option for real-time payments that again well we don't know where it's headed it certainly is something that's out there in the industry if you will sounds good Greg we'd appreciate those thoughts we do have one more question in the queue here and it actually has a little bit more to do with new players in the space so Mary I'd like to ask you this question the question reads what are the key factors that have enabled new fintechs to grow so rapidly yeah sure thanks Wade so syntax a sin and able to grow rapidly because financial services are going digital consumers are expecting more and more from their banking experiences as a result and then banks are looking to fin text to help them solve their customers needs especially the needs that the banks can't solve in-house or it doesn't make sense for them to create a new solution from scratch so fintechs they can also provide greater speed to market in an industry where there's a lot of pressure to show quick returns on investment banks tend to be slower the larger they are and it in many cases they're powered by legacy mainframe systems syntax are smaller and more nimble and they can develop solutions quicker with less overhead so for example there aren't as many controls or lengthy approval processes well sign them down excellent excellent we appreciate those thoughts Mary we do have one more question in our queue here probably the last one we have time for today a reminder to all other questions we have in the queue we'll get back to you via email Gregg the question has an RTP slant to it so I'll send it your way the request and reads is there an expectation for all the RTP platforms around the globe to integrate and what about foreign exchange I think there's a huge opportunity and I laugh because I think real-time payments to some degree fails to live up to its potential if you don't address the international opportunities and so I think there that that is certainly something that's in the plan as I said earlier some of the real-time payment schemes around the world have been adopted for some period of time and so they're fairly well situated but a lot of the more recent ones including the one in the US which as we said has just celebrated its first birthday as well as some in the other countries they're still working on getting full adoption across the country or perhaps across different channels or perhaps different parts of the industry and so I think connection across all of the real-time payment rails across the world is certainly coming but I think it's secondary and concern to making sure each of them is well adopted in their own countries and adopted for all the right use cases now getting a little little deeper on this I think things that make it easier or that in some cases it's the same vendor as I said focal ink who is the provider behind TCH for the US rail also provides the rail in UK and Singapore and Thailand now these are slightly different platforms and I won't get into the details here but there are nuances between them and so well it's not certainly not a one-to-one having the same base provider certainly makes that easier another thing is also the message type in the US as well as many other parts of the world we are adopting an iso 20022 template or format for real-time payments this is also being adopted in other parts of the US outside real time payments I believe it's also working its way towards wire with a deadline I think of sometime in the early decade of 2020 and so having a similar vendor in some of the countries plus having a similar format in many if not all of the countries and continuing to be adopted across the world will make that much easier when the time comes but I certainly don't expect it to be something here in the next six to twelve months for example excellent excellent well thank you Greg for sharing us thoughts on RTP as well as the primer on open banking and thank you Mary for giving us some thoughts on the new players in the industry so as our webinar comes to a close today I'm happy to share a few suggestions on how you might start to think about impacts to your organization first we learned in the open banking section that it's more important than ever to plan on being more collaborative with others inside and outside of your own industry and that's going to mean sharing things you might have been holding very privately up to this point but from our second section we hope you have a very good basis of understanding on what types of partners you want to work with to create some new experiences for your customers and finally we learned that speeds everything in today's world including and financial services and payments to stay up with your competition both in the traditional sense and against disruptors in your industry plan on making strategic investments in technologies that enable your client to conduct their businesses in real time so as we wrap up I'd like to say a very special thank you to our sponsors for this webinar that hat and then tell if you'd like more information about their product offerings just reach out to your red hat or Intel representatives or call on us at level to help you get connected if you'd like to discuss the concepts we've discussed in this session but how they might pertain to your organization by all means reach out to us at payments at level dot IO thanks again for joining and so long everyone