Can The Insurance Industry Get Aboard The Faster Payments Train?
Published: November 8, 2016
Since the first phase of the Same Day ACH rollout in late September, a task force of the U.S. Federal Reserve has been busy investigating ways to enhance faster payment systems nationwide. The Federal Reserve Faster Payments Task Force, comprised of hundreds of members from across the payment industry, has started examining nearly 20 proposals for faster payment solutions. The task forces are focused on exploring new ways to expedite the payment process while at the same time increasing security related to these transactions.
In January 2017, the Fed Task Force is expected to release the first installment of its two-part report, with the second part to be released in the middle of the year. The first part will provide details related to the task forces
and examine the different ways consumers and businesses can benefit from faster payments.
What’s happening in Faster Payments
Aside from the Fed’s recent initiatives, there were also multiple developments in the blockchain space of faster payments.
A survey by the IBM Institute for Business Value revealed that 15 percent of financial institutions could be using blockchain technology within a year. About 30 of the 200 banks surveyed indicated that they aim to launch commercialized blockchain tech next year.
Meanwhile, multiple banks recently partnered to create a global payments interbank group focused on distributed ledger technology, according to financial settlement provider Ripple. The banks, which include Royal Bank of Canada and Santander, are working on reducing the costs and time associated with settlements.
ANZ Banking Group and Wells Fargo recently conducted several months of blockchain testing, which they believe can reduce the time and expenses involved with transferring funds. As part of the process, the two companies tested a distributed ledger that processes settlements between the banks.
For this month’s Faster Payments Tracker™ cover story, PYMNTS spoke with Chad Hauff, director of premium billing at Safety Insurance, to discuss the challenges and opportunities Same Day ACH offers within the insurance industry.
Check out the Tracker’s News section for the latest updates from across the Faster Payments landscape.