One of the main problems faced by banks is the slow and expensive manual processes that result in higher costs, increased risk of errors, delays, and low efficiency. Another challenge is the conflicting regulations and standards, which require banks to comply with regulations set by their own countries as well as any other countries or regions where their customers are based, or they operate in. Regulatory barriers and a lack of visibility into payment status are other significant challenges that banks face. To address these issues, banks need to make cross-border payments faster, cheaper, and easier. The blog suggests identifying customers' priorities as the first step in addressing the challenges. The blog also discusses the benefits of real-time payment tracking and suggests that banks need to modernize their legacy infrastructure to provide a seamless cross-border experience for their customers. Below are the main challenges faced during cross-border payments and some tactics to counter these challenges.
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Slow and expensive manual processes
Cross-border payments involve moving money from one country to another, often involving different currencies, banking systems, and regulatory requirements. Unlike domestic payments, cross-border payments can be slow, expensive, and complex, largely due to the following factors:
Conflicting regulations and standards
Customers conduct business on a global scale and expect to transact just as easily across borders – without spending hours researching the different regulations and standards that come into play. However, cross-border payments often face conflicting regulations and standards between different countries, which can make the process more challenging and complex. Here are some of the obstacles:
Regulatory barriers
Cross-border payments involve the movement of money from one country to another, and are subject to regulatory oversight by governments and financial institutions. These regulations are designed to prevent money laundering, terrorist financing, and other illegal activities. However, these regulations can also create barriers to cross-border payments, making it more difficult and costly for individuals and businesses to send and receive money across borders.
Lack of visibility into payments status
The benefits of real-time payment tracking: Real-time end-to-end track and trace is a holy grail for banks. It would provide superior customer service, mitigate against potential misuses of payment systems, and help detect problems sooner. A global network of banks can deliver real-time tracking and tracing to customers by leveraging Fable’s Growth Suit services. For example, Bank X can provide a number of customers with access to the new global real-time payments system—a real-time gross settlement system that allows banks to directly send funds between themselves in central bank money. At the same time, it can embed its own solutions into this process to ensure that all cross-border payments are tracked in near real-time for both outbound and inbound payments without any need for post-trade reporting or reconciliation. In addition, it can use a third-party application from a technology provider to further enhance the customer experience with proactive monitoring services and alerts when payments reach destinations or trigger preconfigured events like currency conversion or distribution instructions.
Banks need to make cross-border payments faster, cheaper, and easier
Banks need to make cross-border payments faster, cheaper, and easier
A cross-border payments system that is fast, secure, and cost-effective is essential for banks to be successful in today’s digital economy. A recent survey of more than 100 professionals from around the world provides a look at how banks are responding to this challenge.
Identify your customers' priorities
The first step is to talk to your customers. Ask them what their priorities are when it comes to making payments. Do they want the process to be quick and easy? Or do they care more about getting the best exchange rate? Once you know what your customers' priorities are, you can start to tailor your cross-border payments solution to meet their needs.
Introduce them to multiple choices
Excellent customer service
Conclusion
Some of the largest international banks are for a long time, partnering with Fable Fintech, a cross-border payments technology company. For more information on the best cross-border remittance options for your organization, get in touch with a Fable Fintech cross-border payment solutions team now!
To acquire the platform, book a demo with the Fable Fintech cross-border platform experts;