Intix helps automatically trace transactions as they progress through a bank, and track and store every item of data relating to them. It’s not just an internal hygiene factor, but a powerful tool to aid business decision-making, says Managing Partner, Marc Braet.
The phrase ‘track and trace’ now trips off the tongue. It’s become part of our 2020 pandemic lexicon. But it’s been front-of-mind for financial chiefs for some time when it comes to payments.
Innovative digital technologies being rolled out at lightning speed have led to a proliferation of choice when it comes to payment channels and the rails that underpin them. As a result, a complex set of internal systems, often across operational departments, support each institution’s role in the end-to-end processing of a transaction.
When it comes to crossborder payments, that transaction’s journey becomes particularly opaque as it passes through ebanking portals, connectivity software, sanctions filtering systems, messaging middleware, core payment engines, interfaces, clearing systems and correspondent banks – a process that might involve a dozen or more steps before reaching a beneficiary account.
Tracking and tracing those payments has never been more important for the purposes of regulatory compliance and reputational integrity, not to mention customer satisfaction.
Throw into the mix the challenge of doing this with the legacy IT systems still employed by most longstanding banks and it’s easy to see why specialist data transaction firms like Intix come into play. Intix provides solutions to organise data accessibility by enhancing core IT infrastructures to make the end-to-end internal tracking of transaction flows possible.
Its xTRAIL software indexes all data sources used by a bank and keeps them in a digital repository to satisfy compliance timeframes, while its xTRACE software provides granular tracking of transactions inside an institution, together with all the events in that payment’s lifecycle, and monitors them in real time.
“Banks have to be even more capable than before of making their data accessible, so that whenever they get a regulation or compliance type of inquiry, they can address it very, very fast,” says Marc Braet, managing partner of Intix, which he co-founded in 2011.
“We have seen with our customers, and prospective customers, that this really is an enormous challenge with the increasing complexity of all these payments flows and formats.
“While Intix is quite often used as the entry point for a bank to start working on use cases linked to compliance and regulation, there’s also the fact that customers have much more stringent requirements in terms of information. They want to make sure that transactions are processed in real time so that beneficiaries get their money fast.
“Intix developed xTRACE to track transactions end-to-end within the bank, so that whenever there is a hiccough we can inform the bank instantly of that problem so it can look for a resolution without the customer being impacted. That’s really top-of mind for many of our biggest customers today.”
In other words, Intix doesn’t fix the problem, but it alerts banks in real time to a problem that they need to fix.
Most major banks already use SWIFT gpi (global payments initiative) for crossborder payments, which provides transparency around payment processing by correspondent banks. In December, SWIFT gpi Instant was rolled out first in the UK, connecting the high-speed crossborder rails with real-time domestic infrastructure – in this case, the UK’s Faster Payments scheme – and giving visibility as to where payments are in that real-time journey. Braet says that, as Intix’s xTRACE maximises ‘granular visibility’ of internal payment processing and performance, it complements gpi, with a ‘best of both worlds’ approach.
Emphasising the point, he adds: “Combined with SWIFT gpi, our software can create full vision, full transparency around the value chain, and the lifecycle of a transaction, that goes beyond the organisation. That allows banks to better measure their service levels and, hopefully, increase them to the benefit of their customers.”
Not all created equal
Perhaps the most important benefit of xTRACE is being able to assess the relative value at risk whenever there is a problem in the processing of a transaction, explains Braet.
“Without knowing the value at risk, you can’t prioritise your decision-making. If I have two transactions stuck and they each have a value of €500, that’s a different priority to having two transactions stuck with a value of €100million each. So that is something that we see is really important to the actionable requirements of our customers, and that’s what we can address with our technology.”
The cost of payments failure can be huge for institutions.
“If the €100million transaction gets stuck somewhere and will not be delivered in time to the counterparty, you incur financial losses, because there will be interest to be paid, you might be confronted with fines, and then there is, perhaps most important, the reputational risk,” warns Braet.
As more providers enter the crossborder payments space, such as the local P27 platform launched in the Nordics this winter, Braet believes that transaction costs and speed, as well as the ease of IT integration, will be the main drivers of payment rails choice for banks.
“We’ve seen that previously in Europe with the SEPA (Single European Payments Area) initiative. At the same time there were initiatives like EBICS, that popped up in Germany, France and Portugal, to do the same but in a much cheaper manner.
“The fact that more innovations and initiatives are available now in the crossborder space is going to give the banks greater choice and I think that’s good. Choice is competition and competition will also push all providers to deliver a better service at a lower price.”
Choice, of course, can also bring greater complexity, meaning that transparency around the payment lifecycle has never been more difficult to achieve
– or more crucial, Braet stresses.
“You might have situations where a transaction starts on the P27 platform, it is continued over SWIFT and might, in the end, be transferred to another domestic platform. If you do not organise the transparency, then it’s going to be very complex for banks to monitor that,” he points out. “Especially in the real-time context, the technology Intix is implementing for its customers is really valuable in creating that transparency.”
Braet doesn’t see the future of payments processing becoming any less complex; in fact, quite the opposite.
“We’re going to see a lot more new entrants, new initiatives, new technologies,” he says – not least of which, Braet believes, will be blockchain.
“Whatever form they take, they will have an impact. And the more complex organisations become internally, the more relevant Intix is.”
Exclusive: ‘Tracking and tracing’ – Marc Braet, Intix in “The Paytech Magazine” (Source)