Financial institutions (FIs) and FinTechs seeking to deliver optimal payments and disbursement experiences require a powerful tech stack that includes compliance, transaction management and robust scalability. For many of these organizations, creating a tech stack capable of managing growth, compliance and the seamless “any-to-any” payment and disbursement features consumers and clients want is a daunting challenge that may hinder growth or halt it altogether.
The Money Mobility Playbook: Delivering Money-Out Mobility At Scale, a PYMNTS and Ingo Money collaboration, presents the steps FIs and FinTechs can take to implement a successful money mobility innovation strategy regardless of the technology they currently use.
FinTechs need to manage end-to-end payment experiences efficiently. According to our research, FinTechs must deliver frictionless, any-to-any payments for business-to-business (B2B) clients and consumers. As the types of currencies and payment methods available to both types of customers become more complex, however, organizations saddled with legacy technology — or simply unable to devote the necessary resources to transform their payments and disbursement strategy — may fall behind their competition.
The convenience of digital wallets, digital currencies and peer-to-peer (P2P) apps have redefined how consumers think about payments. Instant payments that can be scheduled and customized are now the norm for consumers sending funds online. While consumers expect the same speed and ease that they experience shopping online when they send or receive a payment, the prevalence of new types of payments also means new challenges regarding regulatory compliance.
New currencies equal new challenges for FinTechs seeking to stay competitive. Like prepaid cards, cryptocurrencies present a significant risk to FIs and FinTechs attempting to provide currency choice to their consumers as a money mobility feature: 56% of cryptocurrency exchanges worldwide have no know your customer (KYC) screening mechanisms in use.
For many FinTechs, monitoring KYC risk while ensuring that transactions are processed efficiently is a substantial challenge that places unique pressure on growing organizations that may choose to put off innovation or simply take their chances with lax compliance efforts. Even when they succeed in implementing a new payments-out feature, such as allowing transfers to cryptocurrency, risk may only increase with scale.
One answer may come from access to the right tech tools and data. FIs and FinTechs offering cryptocurrency payments need access to powerful datasets and robust analytics to accurately manage transaction risk scoring to eliminate noncompliance and security vulnerabilities.
FinTechs may consider seeking out a third-party solution to supplement their existing tech stack if their current resources hinder their ability to maintain compliance and growth simultaneously. One simple way to do this is to utilize a tech solution that uses an application programming interface (API) to deliver new features straightaway to an existing payments management structure. Our findings show payments modernization is not just an option — it is a necessity for FinTechs that wish to keep customers engaged.
Securing and simplifying money-out payments — which can include everything from outbound transfers via real-time payments and automated clearing houses to bill payments, balance transfers and P2P payments — is complex and riddled with risk. Nonetheless, modernizing money-out by making it easier for consumers to send funds out of their accounts and providing improved visibility and control over transfers is essential for FIs seeking to remain competitive.
To learn more about how FinTechs can implement a scalable money-out mobility strategy, download the playbook.