AutoRek, a leading software provider for the financial services sector, is today releasing new insights finding that 54% of businesses consider inefficient back-office processes the primary obstacle to delivering real-time payments. AutoRek polled executives in the financial services sector, as well as those in software development and IT, to explore firms’ readiness to accommodate real-time payments, highlighting the urgent need for firms to streamline their operations to meet the growing demand for instant transactions.

The poll found that inefficient processes are the most significant roadblock to delivering real-time payments, with cumbersome manual processes, legacy systems, and disparate data sources among the common culprits causing operational bottlenecks. Almost a quarter (23%) of respondents acknowledged that lack of internal skills is currently holding them back, as many technology teams are facing skills shortages, making it more challenging to develop and maintain the systems needed to meet real-time demands.

Almost one in ten (8%) noted that cost concerns are impacting the widespread adoption of real-time payments. This sheds light on the financial burden of integrating with real-time payment systems, particularly for smaller businesses that may struggle to find cost-effective solutions that meet compliance standards.

As the demand for instant payments is surging among consumers and businesses alike, many established markets are accelerating their adoption of instant payment infrastructure and rails. For instance, the Federal Reserve’s FedNow Service in the United States is designed to modernize and expedite the way funds move. However, 60% of respondents said that their reconciliation processes are not currently sophisticated enough to meet the operational flows that FedNow will inevitably create, raising questions about how firms can more easily navigate the evolving demands set by federal agencies.

“Real-time payments are a double-edged sword for businesses, opening up speed and convenience but also creating increasing operational obstacles – and firms that do not adapt their operations could find themselves in a world of regulatory hurt”, commented Nick Botha, Global Payments Manager at AutoRek. “Channelling investment into streamlining back-office processes is critical for firms that want to avoid landing themselves in hot water. Eliminating the bottlenecks to delivering real-time payments starts with upgrading the old-school legacy infrastructure that is no longer fit for purpose. Customer demand for instant payments is only going to accelerate, so firms that look to increase efficiencies now can get ahead of the curve.”

This survey comes a year after AutoRek published its first payments industry outlook, which found that 65% of firms were still leveraging spreadsheets for critical financial processes. Despite this, the majority at the time did feel ready to adopt real-time payments, however, our latest survey suggests this confidence could be misplaced. To find out more, download the 2023 report here.