CASE STUDY - valantic...CASE STD PAENT: REAL-TE TRANSACTONS DRE PAENTS SECTOR In payments, Česká spořitelna has already arrived in the future. Thanks to valantic’s Real Time Payment

CASE STUDY

Payment: Real-time Transactions Drive Payments Sector

CASE STUDY | PAYMENT: REAL-TIME TRANSACTIONS DRIVE PAYMENTS SECTOR

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Quick Wins

Biggest Commercial Bank in Czech Republic Already Arrived in the Future

Modular Payment Hub for Processing Different Payment Types

E-Commerce Benefits from Instant Payment

Open Banking Leads to more Transparency

NetGuardians as Strong Partner for Fraud Detection


Global trends, changing business models and innovations

pose new challenges for the world of payment transactions.

New payment providers simplify payment processes and

seemingly threat the existing ecosystem of banks and

financial service providers.

Seemingly – because banks also keep up with the times.

Within the framework of a comprehensive roll-out for the

Czech bank Česká spořitelna, valantic has implemented a

technology with which the subsidiary of the Erste Group

Bank AG in Vienna can now offer its clients the possibility to

make payments in real time.


Overview

Instant payment has long become a worldwide subject sustainably changing

the payments sector. As competitive and regulatory pressure rises world-

wide, financial institutes quickly realise that they have to redesign their

payment systems. The cost pressure for conventional payment architectures

also promotes the consolidation of redundant features. Furthermore,

consumers claim rapidity, convenience and simplicity for payments.

Within one decade, real-time payments around the clock have emerged as

key driver for innovations in the payments sector; in many parts of the world,

this technology has become the norm. The drivers of such payment systems

vary between cost reduction, increased efficiency and better customer

service – and, of course, the adherence of regulatory and compliance guide-

lines. One of the outcomes has been the European Banking Association’s

pan-European SEPA instant payments system RT1 introduced in 2017.


83%

73%

47%

42%

Cost reduction and increase in efficiency

90%

88%

78%

Improvement of customer service

Increase in revenue

Competitiveness and agility

Fulfilment of legal and compliance obligations

Improvement of control mechanisms

Boosting time-to-market

What factors are currently influencing the technological change?

Source: Expert survey


Biggest Commercial Bank in Czech Republic

Meanwhile, payments in real time have to support all possible payment types – including

P2P, B2B, B2C and C2B. This also expands the complexity and the additional technological

levels which have to be supported by banks, companies and traders. Of course, rapidity

and convenience are crucial for East Europe, too. Consequently, the Česká spořitelna in the

Czech Republic has recognised the need for a modern and future-proof solution.

With a balance sheet total of 33.7 billion euros, more than 10,000 employees, more than

600 local branches and five million clients, the Czech financial institution is the biggest

commercial bank in the Czech Republic. The subsidiary of the Erste Group supervises more

than 16 million clients in seven countries and is thus one of the

biggest bank groups in Central and East Europe.


In payments, Česká spořitelna has already arrived in the

future. Thanks to valantic’s Real Time Payment Engine,

bank customers have the possibility to carry out

real-time money transfers in Czech crowns. The valantic

Real Time Payment Engine (RTPE) is an open, modular

structured payment hub solution which, in addition to

instant payments, supports the processing of many

different payment types such as SWIFT or SEPA. By integ-

rating different payment channels – such as e-banking,

manual recording of payments or payments via third-

party providers – the RTPE is particularly versatile and

highly flexible.

In addition, the real-time software comprises numerous

gateways, features a multi-channel and multi-instrument

capability and is easily adjustable to country- and bank-

specific requirements. Thus, all payment transaction

services which may arise in a bank can be processed

out of one central hub. This reduces costs and valuable

resources and additionally consolidates computing

operations in one system.

The web-based user platform monitors all payments,

visualises complex transactions in one GUI and gives an

overview of the current processing status. It provides a

reliable, scalable and very flexible technology collabo-

rating with current payment processing systems.

The high-performance solution provides an almost 100

percent Straight-through Processing (STP) which is of

vital importance taking into account the combination of

very small margins and the increasing pressure on

efficient payment handling.

Modular Payment Hub


Initiation ClearingProcessing & Settlement

valantic Real Time Payment Engine (RTPE)

SEPA SCT, SDD, SCC

Domestic Payments

International Payments (SWIFT)

Instant Payments

Claim Processing

Investigations &Exceptions

+ more

24/7 Balance Module

Client Channels

Branches

CorporateBanking

E-Banking

Third PartyProviders

Manual PaymentCapture

Other PaymentSystems

Clearing Channels

Liq.Mgmt.Routing Directories

Clients & Accounts RMA Reporting Fraud / AMLCore

Banking

National Clearing

AccountStatements

CGi Module

PSD2 Module

Source: valantic


Volumes of Mobile Payments via PayPal (in Billions US-Dollar)

Benefits for E-Commerce

Companies can benefit from real-time payments by using functionalities like

hourly payroll and just-in-time inventory management. Payments in real time

also permit to transfer more data together with the payment and to simplify

the coordination and reporting. Banks are now able to provide extended

services and to create further added value for their clients. In addition,

companies can also manage their liquidity positions more efficiently in the

entire financial supply chain.

The extended use of online and mobile devices supports this

trend which is given by digitalisation. Mobile payment solutions such as

Apple Pay or Google Pay also confirm this trend as well as the high customer

expectations regarding the convenience and flexibility of payments. In the

fields of e-commerce as well, real-time payments are a means of ensuring

customer loyalty: goods can flow faster and refunds can just as quickly be

credited to the consumer’s accounts. Compared to payment transactions

with credit cards, real-time payments are considerably less expensive for the

traders.

Source: statista.com


Open Banking

As of the introduction of the Payment Services Directive (PSD2) in Europe,

banks and financial institutes have to give service providers which are

approved and authorised by the clients access to customer accounts. Open

gateways allow more space for managing personal finances and require even

more the real-time aspect in financial transactions.

The future banking and finance world can only benefit from more transpa-

rency and data from the day-to-day business. This knowledge will positively

influence numerous subsections and help to segment customers, reinforce

customer loyalty and accelerate checks, e.g the credit check.


AI Supports Real-Time Payments

For detecting criminal activities, the evaluation of data will

be particularly important, too – the more transparent the

processes are, the earlier fraud and money laundering can be

identified. Fraud detection is to be applied not only towards

external access but also towards manipulations from within.

Thanks to artificial intelligence, a solution of valantic’s partner

NetGuardians monitors all processes and transactions in real

time, regardless of the data volume. Thereby, no known fraud

patterns are searched but the entire behaviour of users and

bank clients is checked for anomalies, so that even risks arising

from new fraud methods which are not known yet are secured

as far as possible.

Customer behaviour

Employeebehaviour

Transactions


Real-time payments also provide a platform for further innovation: processes

such as e-invoicing and e-commerce payment solutions are also supported

by real-time payment systems and allow the customers more control over

their money. Consumers as well as companies directly pay from their

accounts.

This payment method is cost-effective, fast, secure and enables an

immediate verification and confirmation of the credit balance. It helps

traders to reduce their exchange costs and helps banks to maintain the

direct relationship to their customers. The most important, however, is that it

meets the consumers’ expectations in today’s world – and is already reality in

the Czech Republic.

Source: NetGuardians

About valantic

valantic Financial Services Automation is a business unit of the global

valantic Group (www.valantic.com), a worldwide leading supplier of software

solutions in the sections of Electronic Trading, Payment and Transactions.

valantic supports leading banks and financial institutes on their course for

growth by means of standardised or customised solutions in the field of

Digitalisation, Open Banking, Automation and the simplification of business

operations.

In addition to the development of banking solutions, valantic is experienced

consulting and producer-independent implementation partner for the

financial industry. For more than two decades, the company supports clients

such as Erste Bank, Santander, DZ Bank or UniCredit Group. More than

250 IT and finance specialists ensure a smooth and personal service from

different locations. The valantic Group is taking the lead in digital transfor-

mation and belongs to the leading digital solutions, consulting and software

companies with more than 800 developers and consultants worldwide.

You Want to Learn More?

For more information please visit our website:

www.valantic.com

or contact us at your convenience.

[email protected]

+49 391 59809-22

valantic FSA

MagdeburgMittelstraße 10 39114 Magdeburg T +49 391 59 809-0

Frankfurt am MainRahmhofstr. 2 60313 Frankfurt am Main T +49 69 95 92 90 97-0

Frankfurt am MainMainzer Landstraße 199 60326 Frankfurt am Main T +49 69 509 52-0

MunichBülowstraße 2781679 MunichT +49 89 43 77 77 96-0

LuxembourgAvenue de la Porte Neuve 2227 Luxembourg Luxembourg T +49 69 509 52-0

MadridPaseo de la Castellana, 114, Esc. 1, Plant a 2 28046 Madrid Spain Tel.: +49 69 509 52-0

Documents

CASE STUDY - valantic...CASE STD PAENT: REAL-TE TRANSACTONS DRE PAENTS SECTOR In payments, Česká spořitelna has already arrived in the future. Thanks to valantic’s Real Time Payment