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An article relating to this blog post on Finextra:

Faster Payments to arrive six months late

The UK banking industry has set the end of May 2008 as the revised deadline for the introduction of the new faster payments scheme, six months later than originally scheduled.

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Faster Payments May Date - opportunity or sideshow?

If you are going to delay a major financial sector initiative then six months is probably the minimum delay that makes sense. Anything shorter does not give institutions time to react, and anything much longer would undermine confidence that it will be delivered. The revised target live date of May 2008 for the Faster Payments Scheme follows this perceived wisdom - the original target was November 2007. It was designed to give the banks the additional breathing space they need to resolve the additional complexity and testing issues they encountered, but does it offer an opportunity to make additional innovations.

From the discussions I have been party to with banks and others on this topic, many are viewing it as a blip, a hiccup in the grand plan ... a bit more time. Some, like Northern Rock as a prime example, have other worries that are slightly more pressing. Some view it as simply an expensive compliance type requirement to be able to make float free payments as mandated by the OFT, but not something they will actively promote.  

However, with just a few short months to go before the new scheme is due to go live, we are seeing demand slowly increasing again for our FP training. This could either be an indication that some institutions feel they are still not fully up to speed with the potential consequences of what could be the most significant change in UK payments for many decades, or could it be that there are some institutions keen to discover how they can make the most of the opportunities it can provide. So what do you think - will Faster Payments be a competitive opportunity or an expensive sideshow?


Comments: (2)

A Finextra member
A Finextra member 22 February, 2008, 09:36Be the first to give this comment the thumbs up 0 likes Although Faster Payments began as an OFT-led initiative, it is increasingly clear that banks view the service as a market opportunity. Member banks see the new near-real-time channel as a chance to improve customer service and gain a competitive advantage. Indeed, this view is also spreading rapidly amongst non-member financial institutions, such as the agency banks, which are already assessing the best method to gain access to the near-real-time channel so that they can remain on a par with the bigger banks. Banks are increasingly aware that they must build customer confidence in their products and services if they are to overcome the general consumer disquiet that has been building over recent months. If a bank was not to offer the Faster Payments service, the repercussions of retaining the three-day float or making customers choose a costly CHAPS transaction could be disastrous for its credibility and perception in the market. Implemented with the correct security processes in place to cope with near-real-time transaction processing, Faster Payments is an opportunity to offer a customer-centric service that will help banks to draw and retain customers in 2008.
John Cant
Blog group founder
John Cant - MPI Europe Ltd - London 10 March, 2008, 16:31Be the first to give this comment the thumbs up 0 likes I almost totally agree with Roberts initial comment that although UKFP started as a regulatory driven programme, banks now view the service as a market opportunity. The one important difference is that I would add the caveat that it is "some banks now view the service as a market opportunity". Try this simple test to see the different approaches. Go to the member banks website/home page (list of member banks) and simply type in "Faster Payments" into their search function. Different banks will give you very different results - you can then draw your own conclusions as to who sees it as an opportunity!

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