Overview

The future of banking promises to be transformational. 

The move toward data rich real-time payments will give users access to both their financial and non-financial data in a faster, simpler and more secure way, says ATB Business Solutions Vice President, Brian Ford. He describes the ability to integrate and create straight-through processing, as a game changer. “Everyone benefits.”

COVID-19 has exponentially brought the dates forward on implementing ideas like open banking, digital currencies, digital identities, real-time payments, distributed ledger/blockchain and Application Programming Interfaces (APIs), which allow applications to exchange data and functionality easily and securely. The push to more digital data along with digital payment methods will not only allow customers more context in terms of moving money, it will also enhance insights from the data and will help with end-to-end processing, says ATB Business Solutions Managing Director, Natasha Lalani.

Currently, more than 50% of business-to-business payments in Canada are made by cheque. The majority of payment types currently in use (Electronic Funds Transfer—EFT, wires and cheques) have limited data. But this is changing fast, as banks move away from paper-based solutions and data starts being incorporated with the payments.

Payments Canada vision

Payments Canada is responsible for Canadian clearing and settlement infrastructure, payment processes and rules governing payments in Canada. Payments Canada, which is modernizing Canada’s payments ecosystem to replace the outdated legacy systems in use today, envisions a modern payments ecosystem with data-enriched payments that can be made across borders, in real time. It’s being designed to promote innovation and strengthen Canada’s competitive position. It will give you oversight of your activity through many different channels, whether it’s through your bank or your accounting platform. It’ll allow you to make payments that are faster, more secure, easier and transparent. The value exchange is about your transactional data.

The future of payments

The future of payments is all about improving digital banking products and services, and leveraging data (which will also help combat fraud) and APIs to deliver customized, personalized solutions to customers. 

ISO 20022—the global standard for electronic data interchange between financial institutions and payment messaging—“changes everything. It offers opportunity and value for corporations, small and medium enterprises and consumers,” Lalani says. Data-rich payments will lead to business efficiencies and ease of reconciliation, she explains, and could include the following types of information:

• Transaction date
• Amount owing
• Amount paid
• Invoice number
• Payee information
• Payor information
• Delivery details
• Security data
• Unstructured data, such as hyperlink to invoice
• Time of transaction