U.S. Real-Time Settlements: Why the Delay?
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Overview: A defining characteristic of 21st century society has been our obsession with speed. Delivering goods, information, and services faster has preoccupied businesses of all kinds, giving us exponentially faster Internet services and news updates delivered to our mobile phones. So itís hard to see whatís delaying across-the-board adoption of real-time payments settling. Itís widely acknowledged that faster payments are advantageous for all parties involved: banks have greater insight into liquidity movement and corporates have faster access to their funds. But existing payments systems generally work as they should, so why change what is not broken? Yet, if real-time settlement benefits everyone, why have financial organizations been so slow to move in this direction? Certain myths or perceived barriers to adoption still hold some companies back. Whether itís the fear of increased fraud or the cost of making a change Ė but in reality, the biggest barrier to real-time settlement is reluctance to embrace a different way of working. The old business models built around batch processes need to change. And what better time than now, when the global financial crisis is forcing firms to re-examine every element of their business. The opportunity for banks to offer a better, faster settlement service to their customers -- and cut costs at the same time -Ė is there, but only for those ready to try something new and work together with other stakeholder firms.