Federal Reserve Tackles Speed and Security Issues in Latest Payments Report

The U.S. Federal Reserve released a comprehensive report, emphasizing the need for financial institutions to facilitate transactions in real-time.

The 58-page document touched on points ranging from outdated infrastructure to security enhancements. Several types of monetary organizations were covered in the plan, such as credit card companies, digital currency firms and traditional banks.

Iowa-based online payments company, Dwolla, commented, “We know that markets move to real-time, and banking customers are no different. In a world measured by milliseconds, the value of a payment infrastructure that reduces bank transfer speeds from two to four days to under a second is incalculable.”

In an effort to promote collaboration, the central bank called for the highlighted establishments to work together towards the proposed changes.

Experts say mobile technology has raised the standard for payments. Overhauling systems that are currently in place may take years to complete and will be costly, not to mention extremely complex. These are the main reasons large companies are prolonging the inevitable modernization of the industry.

The Federal Reserve wants to change the way businesses view the upgrades, shining light on the advantages of implementing the latest payments protocols:

“The real-time wars will come fast, and the winning stakeholders will be those that adopt, identify, and mature its value the quickest. Many of the banks and credit unions we are talking to about our real-time protocol, FiSync, no longer look at real-time as a burden, but as a competitive advantage.”

Through the report, the central bank has made it clear that the most efficient way for companies to stay competitive and ahead is through compliance.

“The Federal Reserve has laid out a clear vision of its expectations for an improved system so the question will be how strong and reactive can this approach be in such a quickly evolving environment.”