In this post you're going to learn the top things you should look for when considering new wire transfer software for your financial institution.
But before we get started, it’s important to note that the first few sections of this article discuss the trends, challenges, uses, and new technologies in the wire transfer space. These first few sections are important to help you better understand wire transfer systems overall. However, if you’d rather get right into the seven essentials, feel free to skip the first few sections.
Now let's get started!
In today’s global economy, where international businesses are flourishing, sending and receiving payments can be quite complex and can cause trepidation. It doesn’t help that there isn’t a universal system or method to send and receive money. Of the various methods available, wire transfers have grown in popularity because money can be sent almost instantly, across any distance.
So what is a wire transfer? It's an electronic transfer of funds across a network of banks or transfer service agencies around the world. Electronic funds transfer (EFT) is a general term for electronically transferring money. It uses computer networks to transfer funds from one account owner or institution to another.
EFT includes debit and credit cards, staff payroll deposits, online banking, online bill pay, wire transfers, automated clearing house (ACH) processing, and more.
Trends in the Payments Space
For years, traditional financial institutions like banks and credit unions have been the primary players in the financial services space. They have a vast trusted global network of similar institutions, which makes them the natural leaders in money transfers.
However, the financial services industry is being transformed by the Internet and digital technologies. Fintech, an exciting mix of financial services and technological innovations, has had a significant impact on both domestic and international money transfers.
Many new operators have developed global businesses using digital technologies and mobile commerce. Their services are versatile, convenient, fast, and cost-efficient. They offer many different options, such as mobile wallets, account credits, cash payouts, and door-delivery services.
Fintech has helped refine these services and reach more people. Internet-enabled smart devices have made digital remittances mainstream. Customers can transfer funds from a mobile phone or any connected device, regardless of the time and place.
Apart from mobile ecommerce and the advent of 5G, emerging technologies such as blockchain and automated wealth managers could also transform financial services. Though blockchain applications are still new, they’re promising and are expected to make remittances faster, cheaper, and more secure.
While new technologies present opportunities, they also bring challenges. For example, your institution might be facing stiff competition from financial service providers who use such technologies.
You’re more vulnerable in terms of security and government regulations because you handle sensitive financial and personal data.
Many of your employees might be against digital mobilization, fearing loss of jobs or the difficulty of learning new systems. Even some of your members or customers, especially from older generations, do not trust a progressive digital approach to their money. They prefer traditional branch banking services.
In addition, adoption of new technologies can be time consuming and expensive. Your bank may be just one part of a huge financial network, which makes it difficult to respond quickly to market changes. You also have to rid your systems of obsolete technologies before you can adopt innovative practices.
However, despite all opposing factors, you can’t ignore the digital transformation and avoid the latest trends in banking technology. Instead, you should transform and adjust by developing and offering products and services relevant to your account holders.
Wire Transfer Software and Their Uses
Most consumers demand that banking and financial services be fast, secure, and readily-available anytime, anywhere. However, originating a wire transfer can be a tedious and time-consuming task for the financial institution. This is where having good software can help.
Wire transfer systems are digital online and mobile payment solutions that help create, review, and manage wire transfer processes. They are designed specifically to process payments and to transfer money. They automate all fund transfers, whether domestic or international, inter- or intra-bank.
These systems help financial institutions avoid the manual posting of wire transactions. It also helps reduce risk and allows your customers to transfer funds quickly. They reduce expenses, boost productivity, and save time.
Millennials, who are slowly becoming the majority of customers, want a streamlined online payment experience, quick transactions, 24/7 access, mobile apps, and personalized services. They earn well and always look forward to emerging technologies.
They prefer a transparent, collaborative approach to funds transfers. They want quick and easy solutions, which you can provide easily by adopting an automated system.
Providing your customers or members with a seamless wire transfer service along with your other offerings can help to differentiate your institution from the competition. An efficient system ensures a great user experience by making fund transfers automated, easy, fast and cost-effective. It will also comply with payment regulations and data privacy laws.
Wire transfer software can help you provide personalized digital service, fewer interactions with call centers and branches, and higher quality. Your clients will be able to transfer funds easily in just a few clicks or swipes for reasonable fees.
Providing feedback and confirmation about the status of wires will instill confidence in the consumer that they are in good hands with their financial institution.
Seven Indispensable Qualities of a Wire Transfer System
In your search for the perfect software, you'll likely come across options that offer a variety of functions and features. How then do you decide which software and vendor is the best fit for your institution? Here are some guidelines.
Choose a wire transfer system that satisfies consumer demand for digitalization but is secure and easy to understand and use. Specifically, it should have the following seven qualities:
- Easy, seamless integration with any core banking system: Core banking systems are the back-end systems that provide the core functions of a financial institution. They usually include capabilities to process deposit, loan, and credit transactions and accounts, with access to general ledger systems and reporting tools.
Core banking systems differ from institution to institution, depending on the institution‘s functions, such as retail banking, wholesale banking, or securities trading. The wire transfer system you choose should be compatible with your core banking system and work well with it to provide in-depth analysis and add value.
- Secure and ISO 20022-compliant: ISO 20022 is an ISO standard for electronic data interchange between financial institutions introduced by the International Organization for Standardization in 2004. It synchronizes the language used between fintech’s new systems and banks’ traditional infrastructure to help process payments across domains and geographies.
ISO 20022 global standard for finance messages improves communication, understands different meanings, and ensures that everyone involved in the transaction does so, too. Opting for a wire transfer system compliant with ISO 20022 is essential.
- Customizable to your needs: The wire transfer system should either be flexible enough to accommodate a broad range of processing needs or be customized specifically to suit your requirements. It should be able to aid your operations, regardless of whether your financial institution is small or large, local or multinational.
- Web-based, with a responsive design accessible from any device: Ensure that the wire transfer system is Web-based and has a responsive design, which means that Web pages detect the user’s screen size and orientation and change the layout accordingly. This makes the Web pages accessible and clear on any device. This is important, as your customers and employees may use many different types of devices.
- Ability to set custom rules and alerts: You should be able to set rules using the wire system to customize functionality suited to your business requirements, thereby making ordinary, tedious tasks easy. The system should also help create alerts to inform customers of transfer statuses, such as confirmations, errors, important wires, and more.
- Robust reporting tool: Financial institutions must record some customer information when they process wire transfers because they are currency transactions. The wire transfer system should help your institution quickly collect the data needed. It should have a built-in tool that creates summarized or detailed reports that can be printed or downloaded in various formats.
- One-click wire authorization, returns, and draw-down wires: The wire transfer system should make important tasks related to funds transfer—such as wire authorization, draw-down, or reverse wires—and returns easy. A good wire system ideally accomplishes such tasks with minimal clicks and data entry.
The Right System from the Right Vendor
Digital banking means more than a simple shift from face-to-face branch operations to mobile payment apps. It means responding to disruptive user behavior and market conditions with an overall change in strategy and work culture. However, before embarking upon major changes, you should prepare well.
In the context of choosing wire transfer software, ensure that the one you choose suits your needs. It should be capable of performing wire transfers of any volume with regularity and ease. You should work with an experienced vendor who develops customizable systems. The vendor should have a proven track record and be well versed in compliance and regulatory requirements.