Modern banking technologies from Absa improve the client experience
Absa is investing in modern banking technologies that enable real-time payments to help their clients deliver a better customer experience.
Real-time transactions used to be seen as just a way to make an urgent payment: now their convenience and speed are becoming a source of innovation and competitive advantage.
The world of real-time transactions is one where you select a product or service to buy and pay for the item there and then. It’s also a world where you get paid immediately – the cash really is in the bank. There is no overnight processing of payments or long authorisation waiting times. It doesn’t get any faster or more convenient for customers, and that’s a big win for businesses.
“Globally, real-time, or instant, payments are growing faster than any other payment type. This growth is likely to accelerate further, with industry research forecasting annual growth rates of 40% a year for real-time transactions,” says Richard Stocken, head of cash management product at Absa Corporate and Investment Banking (CIB).
“Real-time transactions delivered at the point of customer contact can improve the experience,” says John Molanda, head of product innovation at Absa transactional banking’s cash management team.
Genuine real-time transactions possible with API
While the trend towards instant payments isn’t a completely new one, Molanda says the real difference now is how real-time payments are happening, including embedding instant payments into the clients’ business systems.
He says that in the past, integration with business systems was only possible through file-based systems that were more suited to end-of-day processing. This meant customers and business owners had to wait until the end of the day to collate payments into one file and process the transactions.
“Instant transactions are now possible, thanks to API.”
API is the acronym for application programming interface, where programmes and applications talk to each other, all the time. API is revolutionising cash management, making real-time transactions possible. This creates a better customer experience and saves businesses time, while helping with cash flow management.
Molanda says two examples of industries where customers benefit from instant payments are insurance and gaming.
“There is a need in the insurance industry, especially funeral policies, to pay a claim - or at least part of it, instantly. This eases some of the customer’s distress and creates a positive experience that can’t be replicated with traditional transactional banking processes.”
He says another example is in the gaming industry. “Winnings paid immediately reinforce the positive experience.”
Speed builds trust
Stocken says that when real-time payments are combined with mobile technology, the customer experience can be even better.
This makes the payment seem instant, something not possible when you have to log on to a banking system, load beneficiary details, make the payment and send a proof of payment, says Molanda.
Stocken says Absa is seeing some interesting innovations, where payments are embedded directly into mobile apps using API.
“We have a client whose more than 1,000 agents are using mobile applications that have the capacity to authorise a debit order mandate in real time. When you do this with the customer in front of you, you build trust, while improving the business’ ability to collect payments.”
Costs coming down
Stocken acknowledges that high costs are an issue in real-time payment technology, but he expects them to come down in future.
“There is an industry initiative to introduce a low-cost instant payment capability as an alternative to low-value physical cash transactions called ‘Rapid Payments’. This project is in the early stages but has the potential to transform how businesses interact with their customers.”
Absa’s CIB cash management team is ready to work with clients to help them use modern banking technologies in their businesses so they can create great customer experiences.