The Paytech Show 6.02: Automating Real Time Payments with AutoRek & ACI Worldwide

The mechanics of moving money requires a team of players: merchants, banks, software providers, and regulators, all have a unique and crucial role in getting funds from point A to B. To exercise high-volume transactions in real-time, guaranteed reconciliation can determine whether a small business can keep its lights on or close shop. 

In this episode of the Paytech Show, we explore the process of payments reconciliation and why automation is the most reliant tool when ensuring million-dollar transactions are paid in full and on time. Joining us in conversation we have Hugh Burden, the Head of Sales at reconciliation software provider, AutoRek, and Somya Patnaik, the Principal Product Manager at ACI Worldwide. Both explain the challenges financial services providers face when it comes to cross-border and real-time payments and how they can keep up with the rapid introduction of new digital payment avenues. 

“There is a need for automated reconciliation platforms that will solve not only the volume-related complexities but other operational inefficiencies that banks are facing today,” said Patnaik. “The payment systems, the payment infrastructure, and the payment solutions need to be scalable and agile enough to support the volume explosion that is coming up.” 

Payment volumes are only going to get bigger, and financial institutions cannot rely on outdated and manual systems to act at the rate which is expected by modern consumers. 

“Most payment companies are technology companies,” explains Burden. “They have spent a huge amount of money on that customer acquisition piece, and that’s sometimes been at the expense of the back and middle office. We still find large financial companies who are reliant on excel or a self-built platform.” Such reliance only provides more difficulties for institutions to deal with, diverting time and money which could be spent elsewhere. 

When processing cross-border payments, companies are confronted with additional pain points distinctive from domestic. Foreign exchange rates, regulations, and dealing with interfaces from other jurisdictions, all exacerbate the core systems of incumbents. This, paired with the growing digital presence in online customer interaction, indicate that fundamental changes in core banking systems are necessary to facilitate and reconcile this next generation of payment types. 

For Patnaik, the future is promising. The introduction of ISO 20022 and Faster Payments will encourage financial institutions to digitalise and integrate automation more succinctly into their systems. 

“The next few years are going to be implementing those strategies, transforming technologies, driving innovation, and basically as an ecosystem, we will be reaping the benefits,” she said. “Efficiency in reconciliation is a challenge, and that will continue to grow with higher volumes. But we are seeing central schemes take more control over regulatory requirements.”