" class="no-js "lang="en-US"> EXCLUSIVE: "The 'Google of Payments'" - André Casterman, Intix in 'The Fintech Magazine'
Tuesday, April 23, 2024

EXCLUSIVE: “The ‘Google of Payments'” – André Casterman, Intix in ‘The Fintech Magazine’

Former Swift veteran André Casterman now heads up the marketing operation at specialist data management company Intix. Here he talks to The Fintech Magazine about banks’ growing opportunities around data

THE FINTECH MAGAZINE: Banks are sitting on vast amounts of payments data. How can they leverage that asset for their own and clients’ benefit?

ANDRÉ CASTERMAN: While the likes of Swift gpi, Visa and Mastercard work on the exchange of payments between banks, banks need to internally address client questions like ‘where is my payment?’. And banks’ payments operations teams face the same demands as their customers. They want to know where everything goes because they process millions of payments daily, through various internal systems, where operational glitches occur. They want to know as quickly as possible when a glitch blocks a payment, so their operations team can investigate and resolve it. Technology helps to instantly track the whole payments experience when a payment doesn’t happen in an instant. Using payments data to report to regulators is also a major consideration.

Their regulatory status means financial institutions operating internationally must comply with very different regulatory demands worldwide and have their data ready to respond to regulatory enquiries about transactions or clients, in as little as 24 hours, or be hit with fines. They also need to provide this data to corporate or consumer clients, including SMEs, whenever they demand to see it, to track the payment experience across institutions, cross-border. If transactions are blocked, they need to spot those inefficiencies in real time or their clients experience delays.

TFM: What technology does Intix use to help them do that?

AC: Speed is vital and often existing systems and relational databases within banks, which are sometimes very old, can’t do the job.We’ve created an information system on top of, or next to, those existing stacks, which acts like an alert system, tracking the lifecycle of every single payment through interception points. We use our technology to do this as lightly as possible, without replicating the data, and create an index – just as Google is an index of the internet – of steps where additional processing can be performed, like identifying issues.

It’s like a search engine on mountains of transactions. Whether the data is stored in a very old system or a brand new cloud like AWS or Microsoft, doesn’t matter, and the storage can be any technology or third party the bank works with.

Our work doesn’t impact those systems and the index we create stays under the bank’s control – even if the data goes to a cloud it has identified. Then, Intix performs any additional future searching, reporting, tracking and alerting on that index – which is where we can do magic, with our very specialised system, in a non-intrusive way.

When managing fraud, too, banks are asking us ‘how can you prove the data in your index is the real data we have in our systems?’, which we have algorithms for. To do this efficiently, the search must be instant, reports must be fast and alerts must be raised in near-real time. We use non-relational databases to deliver that performance, building a large index with single search on specific transactions

The data that banks have to keep is huge; because the number of payments is growing and so is the number of processing steps, like screening, reporting and keeping them in a legal archive. And it all has to be kept in a log file stored somewhere as the data they must report to regulators to show they have screened this payment, on this date, based on this list. Intix makes all this data sensible, accessible and actionable for internal teams, and, if needed, for the bank’s clients, using its web portal.

TFM: What are some of the specific problems banks face in regard to payments messaging and reporting?

“We’ve created an information system on top of, or next to, existing stacks… It’s like a search engine on mountains of transactions”

AC: The level of regulation for banks is continually increasing because regulators know that technology enables them to deliver more and faster information on transactions.To deal with today’s high volume of low-value transactions, Intix is built from open-source components like non-relational databases, or big data, core technologies, packaged in a highly customised way for the financial services industry. This is combined with a library of financial messaging standards: Swift MT, ISO 20022, FIX, French, Belgian and other domestic payment formats, with all industry standards preconfigured into the Intix software solution to be immediately actionable. And we can add other libraries of payment and securities formats, or other transaction types.

Given the ongoing challenges the Swift community faces with ISO 20022 migration being pushed back to 2025, Intix can help clients track transactions across multiple formats.

Some of the payment initiation can be in MT101 on the client side, but lead into an ISO 20022 in the bank-to-bank space, maybe ending up with an MT940, or an ISO 20022 on the cash management side. Clients need technology to reconcile and correlate those messages within a single transaction. Sometimes they get double messages – the MT version and the ISO 20022 version – and we can make sense of those flows.

TFM: How is the role of banks changing from being ‘just’ financial institutions, to becoming trusted data processors and how can they leverage that?

AC: Banks will always be considered more trustworthy, because they are regulated and subject to strict compliance standards. We’re all used to using e-commerce websites where you log on two years later and your data is still there – you would not keep our money with them. However, banks have learned a lot from the e-commerce giants, in terms of improving the client experience to be able to access historic data, offer an online experience, instant access to data, and so on. We combine big data technologies from many industries, and make them usable within weeks for financial institutions, making data both accessible and actionable in complex scenarios. From our index, we can enable third-party software solutions that the banks have chosen, like a web portal or artificial intelligence (AI) engine, for them and their clients to access their data, sitting behind that portal to deliver it while protecting the core internal payment engine from those interactions.

We are effectively a layer between internal systems and external portals. For instance, if a client has a credit management software solution requiring a payment history, the payment data is feeding credit management, credit scoring algorithms. Credit scoring is not our specialism, but the data we get from the systems, and how we present it in a correlated way to credit scoring software solutions providers, is one example of how we interact with third-party capabilities in an open banking world.

Next is combining data with AI to solve complex challenges. AI needs data and using it we can add a bit of magic and go beyond traditional regulatory, operational and commercial use cases, to applying forecasting. Liquidity and cash forecasting are essential for corporates and banks, for their own purposes and regulatory reasons; and AI will help us transform their data into additional insights. At an industry level, environmental, social and governance (ESG) monitoring and enabling carbon removal through financial transactions will be as important over the next decade as compliance has been over the last.

Firms can’t avoid it. It’s about both related regulatory demands and voluntary initiatives around embedding additional value into existing payment flows. For example, carbon offsetting fees on payment transactions, where Intix can track the processing steps in a similar way to our sanctions screening. Then, of course, central banks are working on central bank digital currencies, with blockchains as the underlying rails for exchanging information.

We will be able to process those payments, whether through distributed ledger technology (DLT) or a traditional channel. Using DLT for instant payments will be a major shift, where banks will have more channels to operate, and more payments data to track internally – meaning more opportunities for banks and their clients, and definitely more opportunities for Intix to help them

INTIX AND FIS: A NEW DATA POWERHOUSE?

Established in 2011, Intix’s business model is rooted in providing ‘actionable transaction data’ using its own proprietary technology. It counts five of the world’s central banks among its customers. In July, Intix partnered with global financial technology firm FIS in a powerful signal of its growth ambitions. Around the same time, FIS gave up its majority $18.5billion stake in merchant payments arm Worldpay.Announcing the partnership to FIS clients, Intix said they would benefit from ‘greater capability, control and visibility over their payment flows’.


 

This article was published in The Fintech Magazine Issue 29, Page 35-36

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