8OCTOBER 2020IN MYOPINIONIs Real-Time Payments Poised to Transform the Banking Sector?By Matt Egyhazy, Commercial Bank CIO and Wilmington Trust CIO, M&T BankThe world is in the midst of a radical digital transformation, and everything about everything is changing. Consumers expect to have easy access to products and services at the mere touch of a button, and in the financial services industry, heavy competition is coming from fintechs and emerging companies. Winners of the future will need to be nimbler and more responsive than ever to keep up with rapidly changing consumer demands, and technology will continue to evolve more quickly than ever before. At M&T, we've recognized that we need to transform the way we work in order to keep pace with our rapidly changing world and provide extraordinary customer experiences. We're making significant investments in enhancing our talent, improving our tools and capabilities, and adopting Agile practices that will enable us to deliver great outcomes to our customers at a faster velocity. Given the rapid pace of innovation, the entire financial sector is on the verge of a tectonic shift in the payments landscape. Since the implementation in the early 1970's of the Automated Clearing House network (ACH), the electronic funds-transfer system that facilitates financial transactions in the U.S., there have been two significant drivers of digitalization in the core payments arena. The first one is Zelle, an instant payment service that provides customers with a fast, reliable, and secure way to carry out person-to-person payments. Real-time payments (RTP) is the other new payment method launched by The Clearing House (TCH) that allows consumers and businesses to send and receive immediate payments via account-to-account transactions.The current challenges of RTP and ZelleBoth Zelle and RTP come with their own set of challenges. Considering Zelle is still at the nascent stage, there is no standard approach for its implementation, and it's up to each financial institution to either develop its own capabilities or leverage the ones provided by third-party vendors. At M&T, we chose to develop our own Zelle capability for consumer payments, and we've already been able to realize some significant benefits as we look to expand the platform for performing business payments and commercial disbursements. Another significant challenge related to Zelle is the monitoring, controlling, and detecting of fraudulent transactions. Zelle is
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