Modernize payments without disrupting your existing check system

Financial institutions around the world are rapidly modernizing to deliver secure, seamless payment experiences that meet the needs of digital-first consumers. Financial institutions face the challenge of implementing digital payments while simultaneously managing traditional payment functions such as checks. Although check usage is decreasing globally, checks remain a popular payment option for rent and large transactions in the United States. Check volume is still considered important in the EU, especially in France, where over 2.1 billion checks were issued in 2019. 1.6 billion checks were processed that year.

Regulatory pressure to digitize payments

Many countries have adopted payments modernization and introduced initiatives to accelerate adoption and regulate the environment. The Australian government will officially phase out checks by 2030 as part of wider payments reform for the digital age.

Even under these circumstances, checks will remain a legacy payment system for the time being, so financial institutions will need to process checks quickly and securely during the transition period. Since the majority of check processing exists in legacy infrastructure, any new changes may pose risks to the entire payments ecosystem. Financial institutions must also manage the impact on processing costs as economies of scale decline as check volumes decline.

Check Fraud Increases

According to the Financial Crimes Enforcement Network (FinCEN), reports of check fraud have more than doubled over the past three years. FinCEN reported 680,000 potential cases of check fraud in 2022, up from 350,000 in 2021 and a 23% increase over 2020. Professional fraud strategists predict total check fraud losses will reach $24 billion this year, roughly double the previous year. 5 years ago.

Check fraud is a relatively low-skill, easy-to-commit crime with a significant number of potential victims. As more individuals and fraudsters jump at the check fraud opportunity, modernizing payments can help bridge the gap in check security.

The need for widespread payments modernization

As evidenced by the changing check landscape, payment methods will continue to rapidly modernize and evolve to meet changing customer needs. Financial institutions must prioritize payment solutions that can quickly adapt to changing customer needs and minimize disruption to the business and existing IT infrastructure.

IBM® is working with financial institutions to transform payments to meet current and future customer needs by leveraging the flexibility and security of the cloud.

IBM Payments Center™ (IPC) Check Service on IBM Cloud for Financial Services® provides a managed, secure platform built to scale up and down to accommodate changing check volumes. This solution allows banks to deal with an ecosystem of partners with the security, resilience, and compliance capabilities to handle their changing check processing requirements. IBM Cloud for Financial Services is designed to help customers mitigate risk and accelerate cloud adoption for even their most sensitive workloads.

IBM Financial Transaction Manager (FTM), which forms part of the backbone of the Checks as a Service solution, integrates, reconciles and monitors financial transactions, including checks. It provides consistent processing across a variety of payment types, allowing financial institutions to consolidate payment operations into a single platform. FTM includes pre-built functionality for instant payments, SWIFT, ACH, SEPA, check processing, customer onboarding, transaction collection, and more.

IBM Payments Center’s managed services give banks access to industry expertise in check processing and business process outsourcing through the Payments-as-a-Service platform. We use the latest technology to increase the efficiency and value of our payment services. Advisors in the IBM Cloud Expert Lab can also help banks modernize their check processing services by adopting and leveraging IBM Cloud® technologies with a focus on achieving business outcomes.

Financial institutions must modernize payments while minimizing the impact on their existing IT infrastructure. IBM Payments Center Check Services provides flexible, cloud-based components that can integrate with your existing operations and infrastructure. Our one-stop managed solutions are designed to provide cost-effective check processing and are optimized for enterprise-critical banking workloads containing sensitive data.

Modernize your payments strategy with IBM Cloud for Financial Services.