It’s coming… the convergence is coming!

With change comes opportunity, but the size of that opportunity will depend on how you manage the change… As Dick Wheeler, Director of NCR, reports, a change is on the horizon – long awaited and anticipated. Driven by customer demand, technological advances and regulatory changes, payments are converging.

Consumers want choice; they want convenient payment methods, more information, better customer service, and even services tailored specifically to their own needs. Solutions to micro-payments are on the horizon – either contactless (for example, biometrics or RFID) or via your PDA/cellphone. ePayments of all sorts are increasing. And, while these electronic payment transactions increase, even traditional checks continue to morph into electronic and new non-electronic entities, as they are converted to Automate Clearing House (ACH) transactions, image-based Electronic Check Presentment (ECP) transactions, and image replacement documents (IRDs). These morphed formats append additional data to the transaction, meaning that you need to have a more efficient means of handling all of this new data.

Consumers want convenience, so new payment types need to be easy to use, easy to load with various currencies, easy to understand and easy to track. The paradigm is shifting and the potential risk to banks if they don’t address it is the loss of the payment franchise (consider, if you will Paypal).

However, despite this changing payment paradigm, most banks maintain a ‘silo’ approach to payment transactions. Those silos are highly honed and inflexible. Data content is truncated and stored in non-relational databases, where it remains unsuitable for data mining, process optimization or customer-rich applications.

With consumers demanding information and value-add, banks must embrace this requirement and move away from the commoditization of payments.

The problem for banks?
In today’s highly competitive and frantic world, the consumer’s growing demand for information exposes this silo approach in the marketplace for all to see. The shortcomings of this approach has, for the most part, overshadowed the fact that some banks are actually closer than ever before to being able to deliver on the customer’s request for holistic information. The vast majority of banks, however, do need to get started in this direction.

The paradigm shift is creating an opportunity for ‘holistic customer service’ as a key differentiating strategy. In the banking industry, the value that customers place on information is increasing rapidly. Banks that capitalize on this growing appetite for information early can differentiate from the status quo in this increasingly competitive industry.

The next step towards addressing the emerging evolution of your market’s needs is to share this valuable information with customers through enhanced web banking and improved customer service support. And to ensure it will respond to customer needs. How?

Addressing the evolution
By making your queries open-ended, reports ad hoc, even complex research on the fly. Give them the opportunity to track their deposits; create custom alerts for returns. It comes down to sharing information – but does this sharing mean integration? You don’t want to force your customer to purchase a money management tool. Why not provide the same functionality on the web? Not only do you save your customer fiddling with downloads – you create a valuable reason for them to not go to another bank. And now not only is their banking anywhere, anytime, but so is their check reconciliation and money management. And speaking of anywhere, anytime – that currently means ‘within the last 30 to 60 days’.

Why is that? Your customers will appreciate you more if they don’t have to settle all their financial issues “anytime, any day … as long as it is within 60 days”. You can extend further services to them. Simultaneously, putting this information to work internally will help banks gain efficiencies in research and processing functions. With the right vendor by your side, you can access the technologies, tools and experience to get started right away.

NCR’s vision is to help banks to focus on tangible outcomes that can be implemented now. We recommend a single comprehensive enterprise payments approach that will:

• Enrich the customer experience and drive profitable customer acquisition and retention.
• Facilitate the next burst in web banking adoption.
• Reduce internal costs by achieving higher levels of customer self service.
• Shift ‘research’ to ‘level 1’ support.
• Create the potential to rationalize the data silos to drive additional efficiencies.

The good news for banks is that implementing an enterprise payments manager to provide robust information to customers also brings benefits throughout the operation. Holistic customer service is just the beginning.

By addressing the explosion of payment types and associated data with an enterprise payments manager (EPM) solution, banks can employ sophisticated analytics tools on the payments data to mitigate fraud on a more holistic level, and to drastically improve marketing efficiency.