End Users Can Slash Banks' Costs Using Internet-Based Straight Through Processing
Odd Tuftin, R&D Director at CBA, Europe's leading developer of Java-based software for bank international payment End-to-End Straight Through Processing, has suggested that banks that are facing a loss of revenue due to EU regulations on cross-border transactions can save money by allowing customers to complete their own international payment transactions over the Internet.
Commenting on his view, Tuftin said: 'Income from international payment processing now hangs in the balance. According to the Cross-Border Credit Transfers Directive 97/5/EC and later Regulations, from July 2003 banks will have to cap international payment processing fees at the same level as domestic payments. Banks must therefore explore radical thinking if they are to profit under the new regime.'
Tuftin adds, 'One of the major advantages of the new breed of automated end-to-end straight through processing systems is that they will allow customers to complete their own international payment transactions via the Internet. However, banks need to specify systems that adopt a user-friendly interface and offer intelligent functionalities if they are to encourage customers to do this. Equally, developers must ensure that their systems are secure and sufficiently advanced to allow structured processing of all the transaction criteria.'
He concludes: 'Outsourcing transaction completion directly to the customer, with only an automated verification and release in the bank, will mean that banks will at least break even on international payment processing. And, if they choose their system deployment carefully, they will be able to make a profit even when individual transaction fees go as low as the prevailing Regulations dictate.'
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