The Liquidity Coverage Ratio and Liquidity Risk Monitoring Tools under Basel III requirements mandated that by 2015, banks must have at least 60% of highly liquid assets to cover their net outflows over a 30-day stress period. These requirements are planned to be increased in a phased manner to 100% by January 2019. In order to harmonize the European banks’ approaches to the Internal Liquidity Adequacy Assessment Process (ILAAP) and Internal Capital Adequacy Assessment Process (ICAAP), the ECB drafted initial expectations in January 2017. The consultancy period for Supervisory Review and Evaluation Process (SREP) ended in May 2017. Banks must implement the process by the end of 2018. However, the ECB expects that full compliance to SREP may be delayed until 2019.

In the U.S., small banks with less than USD250 billion have sought an extension beyond early 2018 for complying to the Basel III norms. However, larger banks were required to comply from 1 January 2018.

Indian banks must adhere to the capital adequacy and liquidity norms by March 2019, according to the RBI. However, as the banks are facing the arduous task of tackling their stressed assets, the proposed deadline seems to be difficult as it is affecting their profit margins.

Contrary to the opinion that instant or real-time payments may be a luxury for corporate treasurers, the system is slowly evolving as an efficient tool for maintaining sufficient liquidity levels. Functions such as supply chain finance will benefit from expedited invoice presentment, reconciliations, and payment. This will enable treasurers to take advantage of early payment discounts or, in the case of reverse factoring, term extension for the buyer. Instant payment systems enrich the invoicing and remittance processes in addition to offering the instant payment component. As a result, treasurers can add value by injecting liquidity into the supply chain more quickly, reducing supplier risk, and simultaneously helping working capital requirements.

Digital-world consumers expect banks to securely step up their technology game

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Traditional banks must evaluate their place within the payments ecosystem and be open to partnering with FinTechs and third-party developers to drive value collaboratively.

Collaborative Payments Ecosystem Boosts Customer Centricity

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Structural changes are spurring payments industry participants to evaluate the future of the business as well as their role in the months and years ahead.

New payments ecosystem key enablers

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The Payment Services Directive 2 or PSD2 has been in full force for more than six months, and its impact is being felt not just in the European Union, but across the globe – with several markets, such as Singapore, Australia, and Nigeria, as well as Hong Kong announcing open banking initiatives inspired by the PSD2

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