For banks and banking groups using multiple core systems, Cross-border Money Transfers solution streamlines domestic and cross-border movement of funds within the group.
Cloud native and API driven the solution helps financial institutions overcome challenges of serving clients across multiple systems and jurisdictions.
Why are intra-bank payments a challenge to banks?
Customers today expect a seamless, ‘always-on’ approach where movement of funds – particularly within one banking group – is instant and available on demand.
But this is a challenge for many banks as historic IT decisions, past acquisitions or staged migrations mean system fragmentation and multipe core banking solutions being used across a financial institution.
Some banks invest in expensive and inflexible custom-built interfaces to facilitate payments, but many rely on external systems which come with a number of pain points:
Long transaction time
Many systems support business hours or batch only processing and may take several days to settle.
Lack of real-time visibility
Banks rarely have a view into status of transactions going into external systems particularly in cross-border schemes
Failures and reconciliations
Poor data flow and different messaging standards used resulting in manual interventions & reconciliation efforts.
Banks need to account for liquidity requirements and operational effort in addition to per transaction fees.
System migration challenges
Connecting new systems and managing systems’ migrations requires extra time and effort. The end result is high costs and poor customer experience, encouraging customers to migrate to providers that can more adequately meet their needs.
How Cross-border Money Transfers solution works
Once client of one branch requests a transfer of funds to an account in another branch on the DLT network, bank uses DLT to tokenise the funds and payment message and send directly to the receiving system. When the receiving branch confirms, funds can be credited to a destination account, clearing and settlement follow in near real time alongside ledger posting.
Decentralized and secure
Cross-border Money Transfers solution enables secure exchange of value and information directly among participating systems on a permissioned DLT network. No reliance on any central authority to maintain a “golden copy” of the ledger.
The systems participate in a shared network through their assigned and role-based nodes and payments execute through assets representing fiat currency value of the transfer with associated payment data, directly from sending to receiving system.
At any point of time, the state of each transaction is transparent to participating systems, effectively enabling tracking and demonstrating instantaneous and near real-time clearing and settlement.
Cross-border Money Transfers are cloud native and cloud deployment on either private or public cloud is preferred for optimal performance, though hybrid and on-premise options are also possible.
As the needs grow, new systems can be added without any downtime.
Cryptography and client side encryption guarantee full segragation of data of participating parties.
What are the benefits for financial institutions?
Banks benefit immediately from improved efficiency and better customer experienced enabled by the Cross-border Money Transfers solution.
Opens up new Business opportunities
in offering instant remittances for retail and business clients.
Enables savings on total costs of transactions ranging from 30 to 60%
depending on specifics of the use case.
Eliminates need for back-up and recovery systems
at both ends of the transaction corridor.
to add new systems and efficiencies of a shared infrastructure without any compromise on security or data privacy.