Posted: 21/11/2023 | Read time: 2 minutes
Our survey finds a lack of internal skills and cost concerns are impacting the widespread adoption of instant payments.
More than half (54%) of businesses consider inefficient back-office processes the primary obstacle to delivering real-time payments, according to the results of our recent survey.
We polled executives in financial services, software development and IT to explore how ready firms are to accommodate real-time payments. And the results highlight the urgent need for organisations to streamline their operations to meet the growing demand for instant transactions.
The poll found that inefficient processes are the most significant roadblock to delivering real-time payments. Cumbersome manual processes, legacy systems, and disparate data sources are among the common culprits causing operational bottlenecks.
Cost concerns & skills shortages
Almost a quarter (23%) of respondents acknowledged that a lack of internal skills is currently holding them back. With many technology teams facing skills shortages, it has become more challenging to develop and maintain the systems needed to meet real-time demands.
Almost one in ten (8%) noted that cost concerns are impacting the widespread adoption of real-time payments. This sheds light on the financial burden of integrating with real-time payments systems – particularly for smaller businesses that struggle to find cost-effective solutions to comply.
Firms not ready for FedNow
As the demand for instant payments surges among consumers and businesses alike, many established markets are accelerating their adoption of instant payments infrastructure and rails.
For instance, the Federal Reserve’s FedNow Service in the United States is designed to modernise and expedite the way funds move.
“Real-time payments are a double-edged sword for businesses, opening up speed and convenience but also creating increasing operational obstacles.”
However, 60% of respondents said that their reconciliation processes are not currently sophisticated enough to meet the operational flows that FedNow will inevitably create. This raises questions about how firms can more easily navigate the evolving demands set by federal agencies.
Our Global Payments Manager, Nick Botha, comments: “Real-time payments are a double-edged sword for businesses, opening up speed and convenience but also creating increasing operational obstacles – and firms that do not adapt their operations could find themselves in a world of regulatory hurt.”
“Channelling investment into streamlining back-office processes is critical for firms that want to avoid landing themselves in hot water.
“Eliminating the bottlenecks to delivering real-time payments starts with upgrading the old-school legacy infrastructure that is no longer fit for purpose. Customer demand for instant payments is only going to accelerate. So firms that look to increase efficiencies now can get ahead of the curve.”
This survey comes a year after we published our first payments industry outlook. The survey found that 65% of firms were still leveraging spreadsheets for critical financial processes.
Despite this, the majority at the time did feel ready to adopt real-time payments. However, our latest survey suggests this confidence could be misplaced.
To find out the results of our 2023 payments survey, download the full report here.
Looking to offer instant payments? Talk to our team and find out how AutoRek can get your operations real-time ready.