Nearly 90% of respondents expect Dodd-Frank 1073 to have extremely or somewhat negative impact on payments business; Over half of banks believe 1073 will either have no benefit or a more negative impact
Fundtech, a market leader in global transaction banking solutions, today revealed the results of a recent survey on banks’ sentiments towards Dodd-Frank section 1073, which mandates transparency around costs, timing and repudiation for consumer cross-border transfers. The study exposed widespread sentiment that Dodd-Frank 1073 will have little benefit for consumers but will have far-reaching negative impacts on the payments business.
Conducted in December 2012, the survey showed that nearly 90% of banks expect that Dodd-Frank 1073 will have a negative impact on their payments businesses. Less than 5% of banks believe that the regulation will have a positive impact. When asked whether the regulation will deliver the intended benefit to the consumer, 52% of respondents stated that it would have more of a negative impact than a positive one. Only 2% of respondents felt that the regulation would deliver the intended benefits.
Dodd-Frank 1073 mandates that consumers are given 30 minutes to cancel cross-border transactions – however, only 2% of banks state that consumers rescinding orders is a frequent occurrence. Of those banks that knew the frequency, 43% state that consumers never rescind orders.
Nancy Atkinson, Senior Analyst at Aite Group, comments, “We’ve also found that most US financial institutions expect Dodd-Frank to have a negative impact on their businesses, with our own research finding that 50% believe it will have an extremely negative impact. Banks will need to determine the importance of international electronic fund transfers to their businesses and how they will provide these services.”
Tony Salamone, SVP – US Banking Product Management, at Fundtech, added, “Our recent survey validates what we have been hearing from our clients – Dodd-Frank 1073 will be a major compliance challenge in 2013. Fundtech is working with clients to help them comply with new mandates, creating disclosures and isolating consumer transfers to comply with the 30 minute cancellation policy. We recognize the unique challenges presented by Dodd-Frank and are committed to utilizing technology enhancements to ease the compliance burden for our banking clientele.”
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