In 2018, the ACH network of digital bank-to-bank money handoffs saw a record year of nearly 23 billion payments. ACH has rapidly eclipsed the popularity of the quaint paper check, who only saw 16 billion exchanged over the same period. The practice of paying a credit card bill or dispersing bi-weekly salaries by signing paper checks and packing envelopes seems arcane by modern standards. Although a stalwart of the banking industry, even the ACH system is not safe from the changing landscape of payment processing. FINTECH brings a bustling industry of agile disruptors chasing real-time payment models. Quick-moving, easy-to-use platforms lure younger demographics with speedy payments and the ability to receive money without the red tape of opening a traditional bank account. One main obstacle hindering the evolution of ACH: many financial institutions cling to familiar, yet limited, legacy banking software. Built as a single unit, every functionality is intertwined like a spiderweb. The strain of user demands and the speed and scale of data pull on one strand and stretch, tighten, and contort the entire design to its limit. To combat this entanglement of codependent code, engineers patch more layers on top of pre-existing code. Slowly but surely, hulking codebases resist the type of agile updates demanded by the changing payment processing landscape. New, modernized technologies are at the forefront, working alongside banks to help them leverage the power of ACH. Here are three considerations driving this evolution.
Accelerate the speed of settlement
The internet has equipped customers with powerful tools to schedule recurring ACH payment installments, or to trigger same-day ACH for utility or credit card bills. The speed at which customers can leverage the power of ACH has dramatically accelerated, yet many legacy banking platforms languish. Prolonged, labored steps lie between the customer clicking “Submit” and the ability for a bank to actually post the payment. “Same day settlement” is an appealing development that can help banks remain competitive in the changing payment processing landscape. However, many institutions view the necessary overhaul to existing systems as cost-prohibitive. Platforms like ProcessMaker can supplement your current processes and offer exponential opportunities for growth in automation. Instead of drowning your team in added paperwork or manual tasks, you can set up a lightning speed cascade list of automated processes. Each transaction moves through a set of parameters, quickly checking the required regulatory and security boxes. Any transaction that does not meet your stringent set of standards can send immediate alerts to your team.
