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Payment Processing Delays

16th Apr 2015

This was the title of the broadcast message I received when I recently logged into my company’s business bank account.

The message went on to say (and I will paraphrase here for brevity and to save the bank in question any further blushes) the bank was experiencing payment processing delays ‘…which may mean your beneficiaries are claiming non receipt’. It also advised we may not yet be able to see payment entries on our on-line account statement, however payments were being processed and that ‘the delays were under urgent investigation’.

The reason why I found this message so interesting is what it revealed about the bank’s level of understanding of the delay itself.

This was a blanket apology, most probably sent to all customers of this particular business banking system – and let’s be honest that could be thousands of people, just like myself, managing business accounts at SMEs. How embarrassing!

The fact the bank sent this indicates they knew the issue ‘under urgent investigation’ was potentially widespread, but they didn’t understand its breadth of impact. If they did, surely they would have only sent the note to the clients whose payments had actually been delayed?

The note didn’t tell me if any of our firm’s payments had been delayed and if so, which ones. It also didn’t tell me by when they expected the issue to be resolved and when any delayed payments would be completed by.

As someone who uses this system to pay employees and suppliers, I found this quite concerning, but having been involved firsthand in helping to overcome some of the technical challenges impacting payment providers, not altogether surprising. However despite these factors, I really do feel in an always-connected, one-click world with social media Apps on every smart phone and new competition ready to pounce from the sidelines, that some banks need to take a much closer look at the quality of the customer experience they provide.

One of the key ways in which they could do this, is to start examining problems impacting their payment processing systems from their client’s perspective.

Like most things in life, clients care about how an issue impacts them personally. If their payments are late, they want the details. Which ones are late? Will they be 1 day late, 2 days late or longer? With this insight clients can then better manage the issue their end. They can contact suppliers and advise of potential delays to hopefully avoid late payment fees, manage payee expectations, or put in place alternative payment methods if the issue isn’t going to get resolved in a timely enough manner.

It’s about proactively managing potential sources of client discontent and stress. And, let’s be honest, some of the spectacular outages recently impacting high street banks have shown just how expensive not effectively managing these issues can be.

However, in my experience one of the key challenges facing banks is that client-servicing teams just don’t have access to this level of information. Their infrastructure teams may have been notified of a broken network switch or an out-of-action server, or application teams may have detected software bugs. So they can detect an issue’s occurrence, and the fact it will likely cause processing delays, but visibility into the problem’s impact on actual clients is often entirely lacking. “System down” means just that – no insight.

These teams don’t always have a means of quickly identifying which payments have been delayed already or which payments are likely to be delayed while the issue is being resolved. Industry insiders have told me that sometimes it takes literally days to track down missing payments in their systems. Worse, in some cases they don’t know which payments are affected, or sometimes even in which system along the process they have been halted.

This means that the people facing off to clients just don’t have access to the type of information needed to accurately understand how waves down at the infrastructure level may be causing ripples for individual clients like our firm.

Established payments providers have created pyramids of insight, often heavy at their base with technical outage details but quickly tapering off to vanishing point at the apex in terms of client- or payment-specific information. The bad news for them is that today’s clients are demanding more, they want more details and greater transparency. The new entrants to payments processing are building these features in from the get-go.

To meet the new competition and fend off the regulator, established players are going to need to put in place systems and processes that not only detect the issue’s cause to enable engineers to commence repair but also, as the problem’s impact percolates up the business, quickly identify which payments have been delayed and to which clients these payments belong.

With this tailored insight, client-servicing teams would have instant access to the information needed to substantially improve the client experience. Most importantly they can properly inform their customers.

Also, by understanding where within the process payments have been halted, technical teams could work with client-servicing groups to prioritise for repair systems with a high volume of payments stuck inside. Alternatively, certain high value payments, or those belonging to clients paying for a premium service could be focused on first.

This approach would enable banks to replace pyramids with obelisks – as wide at the client-facing top as at the technical base. I’m thinking something along the lines of those that featured so prominently in Stanley Kubrick’s 2001 Space Odyssey! Just think if Velocimetrics’ business bank had this level insight I may never have even needed to be on that blanket mailing list to start with!

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