Accuity, a part of BankersAccuity, the leading provider of global payment routing data and anti-money laundering (AML) screening software and services, today released a new industry perspective examining potential challenges banks face in light of Section 1073 of the Dodd Frank Act. The report, part of Accuity's ongoing Viewpoint series, is entitled “Dodd Frank’s Remittance Transfer Rules Could Mean a New Look at Payment Workflow for Banks” and tackles the effect of new protections on remittance transfers, including disclosures, error resolution and cancellation rights for consumers who send remittance transfers to a foreign country from a U.S. bank.
These remittance transfer rules will add complexity and cost for most financial institutions, including a prepayment disclosure at the time the customer initiates a transfer transaction detailing fees, taxes and costs as well as requiring a written receipt within twenty-four hours. A bank may also have to absorb costs if a payment has to be refunded or resent. As a result, banks that wish to minimize the risk and costs of Section 1073 must get payment instructions right at the point of customer contact and not expect to be able to repair the payment instructions later—or pass on the cost.
Together, the new rules place much greater pressure on the front offices of banks, money service business and payment agents to ensure the customer has supplied valid and active bank routing details for each and every transaction, requiring more efficient payment processing and validation policies and procedures. For banks that accept the challenge, however, finding better, more efficient payment processes can well become a competitive advantage.
“Even for banks that have historically accepted repair fees and costs as the price of good customer service, Section 1073 can mean re-examining every aspect of payment validation and workflow,” said Sarkis Akmakjian, Associate Director of Product Management at Accuity. “But developing better payment processing can also mean smoother transactions, faster processing and more unified customer service—exactly what institutions need in today’s competitive landscape.”