IBM Provides Real-Time Payment Processing for Banks with new Financial Transaction Manager for Immediate Payments

IBM (NYSE: IBM) announced new offerings to help commercial banks rapidly provide new services for customers by using real-time payments. This will allow banks to take advantage of new immediate payments schemes now in development across the United States, Europe and Asia. Once these immediate payment networks are fully in place, consumer transactions will clear in seconds, speeding access to funds such as payroll and insurance claims reimbursements.

When available, IBM Financial Transaction Manager (FTM) for Immediate Payments^[1] will support new global payment initiatives such as The Clearing House (TCH) in the United States and the Pan-European Instant Payment scheme in Europe.

The move to immediate payments highlights the transformation that banks and Fintechs are currently undergoing to become cognitive banks. One attribute of a cognitive bank is the ability to provide faster and safer payments, immediate counter fraud and financial crime detection, and vastly improved and simplified regulatory compliance.

Combined with IBM Safer Payments, the new version of FTM can help improve the accuracy and efficiency of fraud analysis in immediate transactions by using cognitive computing to validate payment transactions and detect suspicious patterns in real time. Safer Payments applies machine learning models to help analysts detect fraud so they can act quickly to reduce fraudulent events.

IBM today also unveiled a new offering and services to support the upcoming European Payment Services Directive 2 (PSD2). According to the directive, which will have a significant impact on the banking industry, any banks that operate in Europe will need to provide wider access to their customer data and payment processing systems to registered third-party providers ranging from traditional banks to app providers. This happens in the form of APIs that can expose access to data and services.

For developers, a new PSD2 API Sandbox built on IBM Bluemix, IBM’s cloud platform, allows them to try out ideas quickly, without set-up time or costs. IBM is also publishing new PSD2 implementation APIs into the PSD2 sandbox so developers don’t have to start from the beginning when developing new apps. The sandbox will use API Connect, the industry’s first and only API management platform with an integrated approach for creating, running, managing and securing APIs in a hybrid deployment.

While APIs represent the basic tools for application developers, more importantly they represent a new form of business model innovation, helping create completely new customer experiences.

“For banks to stay relevant they must be prepared to engage in real-time where and when it’s convenient for the customer, on their device of choice, and using the latest and most accessible systems,” said Likhit Wagle, Global Industry General Manager IBM Banking and Financial Services. “With today’s announcement, IBM is helping financial institutions prepare for immediate payments and innovate with the latest APIs and mobile services while protecting the security and privacy of sensitive customer data.