IBM announced new offerings to help commercial banks rapidly enable new services for customers using real-time payments. This will allow them to take advantage of new immediate payment schemes now in development in Europe, Asia and the United States. Once deployed, these systems will allow consumer transactions to clear in seconds, speeding access to funds such as payroll and insurance claim reimbursements.

When available, the new Financial Transaction Manager (FTM) for Immediate Payments will expand IBM’s leading payments platform by adding features and functions that will support new global payment initiatives, such as The Clearing House (TCH) scheme in the United States and the Pan-European Instant Payment scheme in Europe.

“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, General Manager IBM Banking and Financial Services. “With today’s announcements, 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.”

When combined with FTM, IBM Safer Payments can help improve the accuracy and efficiency of fraud analysis by using cognitive computing to validate payment transactions and detect suspicious patterns in real time so that counter measures can be swiftly applied. Safer Payments is an end-to-end solution for preventing fraud in all cashless payment channels. Used by some of the largest portfolios in the world, the solution offers superior fraud detection accuracy and greatly reduced false alarms. It acts as a “virtual analyst” to help identify new fraud patterns, Safer Payments applies machine learning models to help analysts detect fraud and act quickly to help reduce fraudulent events.

The move to immediate payments highlights the transformation that banks and Fintechs are currently undergoing to become cognitive banks. While digital banks use technology to collect and analyze client data and offer remote access to services, cognitive banks build on this by adding new analytics, mobile and cloud technologies. As a result, cognitive banks can gain customer insights that provide a personalized engagement that digital banks are unable to match. A true cognitive bank will also provide faster/safer payments, immediate counter fraud/financial crime detection and vastly improved and simplified regulatory compliance.

As part of today’s announcement, IBM also unveiled a new offering and services to support the upcoming PSD2 initiative in Europe and open banking.

Banking experts from IBM's Global Business Services with knowledge in Payments and digital transformation have identified 15 dimensions within PSD2 and criteria for compliance supporting business, operations and technology. Depending on a bank's business strategy of either just complying with the PSD2 directive or creating new opportunities, IBM experts can perform consultative workshops for an organization-wide readiness assessment, perform gap analysis and recommend specific next steps.

IBM is also delivering a PSD2 Sandbox on IBM Bluemix with API Connect for developers to try out their innovative ideas quickly, without any set-up time or costs. IBM is also publishing PSD2 implementation APIs into the PSD2 sandbox so developers can get started on their PSD2 apps without having to start from scratch. API Connect is the industry's first and only API management platform with an integrated approach for creating, running, managing and securing APIs in a hybrid deployment.

Adoption of cloud and mobile services combined with open APIs are critical to any integration of cognitive technologies. IBM cloud is gaining momentum in the global Financial Services banking community and with today’s announcement, IBM remains a leader in driving open API adoption. IBM's new PSD2 offering will run on Bluemix, IBM’s cloud platform, reinforcing the link between cognitive banking through immediate payments and open API adoption.

These new standards, and other recent regulations will transform the banking industry. According to PSD2, 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 will be done through Application Program Interfaces (APIs) that can share access to data and services. IBM is working with both financial services firms and fintechs to develop standards for these APIs and working with retailers as well as fintechs to provide innovative services to customers that will support the new standards.