Payments Canada asked Derek Vernon, Vice President and Head, Enterprise Payments Modernization at BMO Financial Group to talk about the work his team has been doing to get the organization ready to support the ambitious roadmap ahead. Read on to learn more about their plans, their client-focused approach and the benefits Modernization is bringing to Canada.
How has BMO been preparing for Modernization?
BMO sees payments Modernization as a once-in-a-generation catalyst for change and an opportunity to significantly improve the customer experience and implement leading edge innovation while preserving safety and security throughout the payment ecosystem. We’re fully engaged in the process at all levels to ensure our teams are ingrained and well apprised of developments taking place – everyone is on board and excited for the future. Our approach is to always think like a customer and bring a client-first focus to all industry committees and working groups hosted by Payments Canada, Bank of Canada and our industry partners.
We have developed a strong enterprise-wide program infrastructure to support and deliver on our Modernization aspirations, including dedicated and expert stakeholder teams. Our team is focused on the planning, execution and implementation phases including partnering with our clients to help prepare them and ensure they understand the benefits Modernization will bring to them. We take great pride in listening and responding to the needs of our clients. It’s important to us that their feedback and voice is actively considered in ongoing developments.
BMO has also been proactively investing in key foundational technological advancements, including investments in strategic platforms for growth and innovation, as part of our commitment to helping our clients benefit from the Modernization of payments.
What has been the biggest challenge in preparing for Modernization?
In Canada, we’re fortunate to have the unique opportunity to learn from other jurisdictions that have already embarked on their modernization journeys. But, we have to also be mindful that what might work in the U.K. or Japan, may not apply or could work differently here. We also have to be aware that an undertaking of this magnitude is incredibly complex, with a lot of moving parts that will require a significant investment of time and resources. It’s certainly easy to get lost in the many “business-as-usual” activities, but we can’t lose sight of what we’re trying to solve for, and keeping in mind those that will benefit most; our clients.
What kinds of opportunities in relation to Modernization are you most excited about and why?
At BMO, we’re excited about the benefits Modernization will bring to our clients by creating payment systems that are faster, data-rich, more secure and will allow for new and innovative capabilities to be built as each phase of the program is implemented. Real-time payments will create numerous customer experience benefits including the ability for consumers and small businesses to pay invoices from the electrician, contractor or even pay the babysitter or lawn service almost instantaneously.
Starting in the fall of 2018, the additional exchange window for EFT* and the change to ensure incoming funds are posted within two hours will offer great benefits to our Western-based clients and enable faster access to funds for all EFT participants. We see Same Day EFT as a great solution for time sensitive payments including emergency payroll situations so that you don’t have to worry about your employees not being paid on time should an unexpected situation arise – expect the unexpected.
The ISO 20022 standard opens the door for us to leverage more data travelling along with the payment, improve straight-through processing while creating enhanced transparency as money moves around the globe. With richer data capabilities, businesses will be able to send added information such as contracts along with payments and better manage their cash flow by knowing more about why and where money is moving. As a cross-border bank, we’re also encouraged by the prospect of making things easier for companies looking to expand their business globally using this standardized payment format.
Why do you think Canadian businesses should be excited about Modernization?
There’s a lot for Canadian businesses to look forward to as we modernize and we are focused on delivering value along the way. A modernized payments infrastructure is imperative in supporting the changing expectations of all Canadians, especially within the rapidly evolving global economy.
Modernizing our national payment systems will strengthen Canada’s competitive position as a global leader and will allow for new and innovative capabilities that will drive growth and cost-saving efficiencies. It’ll provide improved experiences for consumers and businesses. It’s a fantastic (yet challenging!) time to be in the payments industry!
*Electronic Funds Transfers includes AFT (debits and credits), electronic remittances, and EDI transactions.