Is your bank ready to realize the

benefits of real time payments?

The payments industry is experiencing rapid and radical change
– the most radical since the introduction of credit cards nearly 70 What’s driving
years ago – as consumers and commercial organizations alike aim the payments
to reassess how they pay, when they pay, and even what they pay. revolution?

Payments continue to represent a large proportion of total banking revenue today, Change drivers include:
estimated at between 30 and 35 percent.1 With payments modernization, this
revenue is at risk as organizations focus on innovating their business models and • Evolving client preferences,
payments technology, in search of new revenue streams and cost savings. including digital and on-demand
expectations to meet the
With this ongoing disruption, banks are focused more than ever on providing needs of their customers
revenue-generating products that are cost efficient. At the same time, as • Competitive disruptions,
customer preferences for new payment types continue to shift, creating a positive including emerging Fintech
customer experience across multi-channel solutions and services remains critical. products and services
We believe there is a significant opportunity for real time payments to further drive simplifying the payment
payments modernization: 41% of U.S. corporations are already in discussions with experience
their banks regarding real-time payments implementation.2
• Regulatory demands across
fraud, wire transformation and
Preparing for real time payments data privacy
As consumer and business expectations continue to change, real time payments
are increasingly gaining traction worldwide, not only in the U.K., Singapore and
Australia, but also in the U.S. through the launch of The Clearing House’s real time payments solution, RTP®. In a rapidly
evolving market environment, banks should consider questions including:
• Have you set a long term payments strategy that reflects your customer expectations, your revenue generation and
cost optimization potential, and your technology investment requirements in a rapidly changing environment?
• Are you engaging consistently and directly with your corporate customer base, ensuring a laser focus on customer-
centricity to reduce the risk of corporate client churn?
• How resilient and responsive is your payments system architecture today? Do you have a clear understanding of how
to future-proof industry movements such as RTP®, where increased risks arise due to the irrevocable and fast nature
of payments?
• What local opportunities can banks consider given global initiatives, e.g. PSD2/Open Banking account access, and GDPR
confidential customer data security requirements?
The answers to these questions can reveal that payments are a fragmented challenge across the enterprise. Addressing this
challenge calls for an end-to-end effort to educate corporate clients on the value of RTP® and co-development of real time
payments use cases that will resonate with customers. Education is a critical component of this process. When asked to
identify roadblocks to real time payments implementation, corporate leaders we interviewed pointed to the uncertainty of
technology implementation costs and the challenges of “current system compatibility unable to digest 24x7x365 transaction
and data.”3
1 KPMG Payments Analysis, 2019; 2 Citizens Bank Real Time Payments Outlook, 2019; 3 KPMG Research, 2019
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Preparing for real time payments (continued)
Banks need to understand the specific
benefits real time payments can
bring across target industries and
customer segments (both corporate
customers and consumers) so they
can rapidly ideate and prototype real
time payment-based solutions to
address those opportunities. Fintechs
today are able to provide an end-to-end
suite of payments services (including
processing, invoice and billing,
analytics and fraud protection). These
capabilities enable them to work with
their customers to solve their most
difficult problems. Ideating directly with
customers creates a clear distinction
between existing pain points and root
causes from business processes; it
also allows both sides to move forward
together, focused on business success.

Emerging capabilities offer financial

institutions similar opportunities to
better understand their customers’ end
to end business transactions. They can
solve existing pain points today and
identify broader benefits that real time
payments enable.

A car sale transaction is a good

example. Real time payments provides
24x7 payment capability with real-time
funds availability, a secure environment,
and the ability to leverage data-rich
ISO20022 messaging to pair the
payment with vehicle identification Around 80% of
numbers, registration, and insurance. merchants expect RTP
Additional business value can emerge
for banks that offer an end-to-end to deliver cost savings to
experience and cross-sell alternative their business 3
products such as insurance financing.

3 ACI Worldwide & Ovum

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

2 Real time payments

Real time payments at KPMG
To capitalize on this opportunity and remain competitive, banks should be focused on the following:
• Engaging and educating corporate clients using design thinking
methodologies to co-build and co-ideate use cases to accelerate Our service also leverages other
development of real time payments products KPMG capabilities including:
• Increasing cost optimization for their corporate customers • Innovation Lab and ideation capabilities
by creating internal efficiencies across their corporates’ payments to foster a design thinking environment
processes and AR/AP payment flows
• Corporate strategy frameworks to
• Prototyping and piloting go-to-market solutions through co- identify attractive revenue pools and
creation of digital wireframes and visual design stories, using perform financial modeling
identified use cases to unlock customer value and focus on end-to-
• Data & Analytics and technology
end business transactions
solutions to quantify benefits delivered via
•B
 uilding robust product roadmaps and revenue projection real time payments
models to ensure strategic execution of the bank’s go-to-market • Our U-Collaborate process, delivering
strategy for real time payments products across multiple industries collaborative workshops with banks,
and corporate customers their corporate clients and KPMG subject
matter experts
•B
 uilding sales expertise to better engage in corporate sales
discussions and increase sales conversion across their sales funnel.

KPMG helps banks take these critical

steps with three specific services
• Real time payments industry design story development
KPMG uses our design story approach to simplify how the value of real
time payments initiatives can be realized across the bank’s customer
base — a process repeatable by industry. This service uses a thorough
visual customer journey approach to drive enhanced decision making. It
encompasses design thinking, education and ideation to articulate key
pain points and specific benefits (such as customer experience uplift
and operational benefits that support the bank’s revenue growth or cost
optimization goals).

• Real time payments productization

KPMG can help banks accelerate their prototyping and development of real
time payments solutions by leveraging our prototyping teams’ capabilities
and strategic support such as revenue modeling to ensure banks have a
clear vision on the end-to-end approach — from ideation to prioritization,
pilot, and test to launch. We can also work collaboratively alongside your
corporate customers to accelerate development and product pilots through
a detailed product roadmap development process.

• Real time payments sales acceleration support

KPMG provides training and knowledge support to bank sales teams and an
ongoing customer engagement strategy approach to help banks generate
interest across their customer base. This approach can include thought
leadership, sales discussion materials and roadshow development content.

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Real time payments 3

Why KPMG
KPMG member firms have experience with real time We have a range of developed tools and models
payments implementations around the globe, having served including:
as the program manager for clients across Australia’s recent • Visual design stories across industries including Insurance,
NPP launch in 2018, supported a large Canadian bank with Real Estate and Power & Utilities
payments modernization efforts, and assisted clients with
the UK’s Faster Payments and Singapore’s FAST real time • Database of 150+ real time payments use cases
payments implementations. We have also led the business, categorized across delivery complexity
technology and operational impact assessments of real time • Multiple demonstrable prototypes to highlight the art of
payments for many of the largest banks in the US. the possible
We have strong relationships with key payment industry • Customizable revenue project models.
players worldwide, allowing us to bring global lessons
Using these assets, we have delivered real time payments
learned to U.S. banks as they continue to ramp up real time
products and strategies for 6 large banks in the US and
payments implementation and productization efforts.
globally.
Our experience in providing real time payments vendor
analyses to large payment providers and banks gives us We have critical experience that positions us to help
important market insights and a deep understanding of banks identify the right opportunities across industries,
critical vendor needs. product and customers. We also have the right skills
(innovation lab designers, payment practitioners) to visually
articulate the benefits for banks’ customers through our
design story process.

Contacts Chris Hadorn Cyrus Bhathawalla Gabriel Loh

Principal Managing Director Manager
Advisory, Operations & Advisory, Operations & Advisory, Operations &
Compliance Risk Compliance Risk Compliance Risk
chrishadorn@kpmg.com cyrusbhathawalla@kpmg.com gkloh@kpmg.com
404-979-23177 212-954-1242 917-244-5045

Some or all of the services described herein may not be permissible for KPMG audit clients and
their affiliates or related entities.

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
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