As technology continues to evolve, the world also continues to become even more connected. Indeed, in 2020, there were an estimated 50 billion devices linked through the internet.
This means that industries must work doubly hard to make sure that their infrastructure can keep up with this level of interconnectivity.
In the world of banking and finance, this translates to the capability of providing a seamless ecosystem of services. With more processes becoming digital-first—as opposed to starting as traditional and then later being adopted to digital—financial institutions must be ready to make the digital transition. This is especially true for payment practices, which constantly evolve along with technology.
As such, it’s a good idea for banks and other financial institutions to implement new corporate payment systems that can be used anytime, anywhere, using any device. One good example of this is an enterprise payment hub.
What Is an Enterprise Payment Hub?
An enterprise payment hub, or simply a payment hub, is a platform that consolidates all payment operations from end to end. Moreover, a payment hub automates processes and allows financial institutions to build their own system that incorporates all the individual solutions offered by their legacy systems.
Traditional payment models use different systems for check processing, money transfers, and international remittances. While these undoubtedly work, having separate solutions for every banking and finance process can get tedious when it comes to aspects like maintenance and reporting. With an enterprise payment hub, everything is centralized in one system, allowing you to easily manage payment authorization, processing, and optimization. It can also help you manage all your ERPs and the different payment formats that they generate.
Apart from this level of convenience, below are a few more reasons for your bank to adopt an enterprise payment hub (if you haven’t already):
It Can Improve Security
Legacy infrastructure usually gets left behind in security updates, simply because they’re old. As mentioned, technology continues to evolve and it does so rapidly. Those innovations developed years ago aren’t compatible with or have limited capabilities to support new ones. Inevitably, these aging systems will either be completely unusable, or unsafe to use due to security issues.
With a central enterprise payment hub, you’ll have a full-on view over all facets of financial processes. You can monitor user behavior and track activities across multiple accounts in different locations. Ultimately, having this level of visibility gives you better fund control, lowers the risk of fraud, and minimizes errors.
Newer systems also receive continuous software updates, so you don’t have to worry too much about bugs, data breaches, and other cybersecurity issues.
It Facilitates Easier Multi-Bank and Global Transactions
Financial institutions are not confined to internal transactions. Indeed, even the smallest banks have relationships with other finance-related organizations. Meanwhile, mid- to large-sized entities often conduct international-level transactions. An enterprise payment hub can help enable accurate and efficient global exchanges, minimizing costs and ensuring quality service delivery. In addition, a payment hub can ensure a more stable and secure inter-bank connectivity.
It Enables Faster, Better Services
One of the biggest issues with legacy solutions is that their separate ecosystems can get in the way of efficiency and productivity. Most of the time, they’re also not supported by new technologies that help with optimization and automation. This lack of uniformity and compatibility results in disorganized data and files, not to mention higher costs and slower transactions. The ultimate result is a complex process that leads to poor customer service.
Obviously, this is not an ideal situation. Customers, whether they’re consumers or business partners, expect a seamless experience and real-time payment updates. These are all possible with payment hubs that can provide instant updates, simply because they’re designed using the latest technology. Thus, they’re built to respond faster across a wider variety of devices.
It Makes Compliance More Straightforward
Due to the increasingly complex nature and the staggering amount of data collected by financial institutions, regulatory bodies are also becoming more strict about compliance requirements. This way, they can ensure that service providers are always delivering what they promised to their customers.
Obviously, legacy technologies can still provide the information sought by regulators. However, it may not be as easy to collect and curate the details because they’re coming from separate systems. This can make the compliance process a little more difficult than is necessary. Using an enterprise payment hub can solve this issue, relieving your organization with one less worry. Of course, remember to choose a solution that supports that ISO 20022 payment standard.
It Can Help Boost Profits
An enterprise payment hub eliminates the need for maintaining multiple systems. As such, banks and financial institutions can reduce operations costs on this front. Coupled with increased efficiency and productivity, it’s easy to see how this investment can result in a quicker ROI.
As a bonus, payment hubs can also give you a clearer insight about where the bulk of transactions are coming from so you can further optimize those channels. Financial institutions can also use the data from payment hubs to make more accurate forecasts and analyze patterns to further increase profitability.
In a fast-moving industry such as banking and finance, institutions should be able to adapt with ever-changing payment practices. One way to do this is by implementing a payment hub system. This technology, along with other technological solutions, can empower banks and financial companies to deliver the best services to their clients.