Stagnant Corporate Systems, Cybersecurity Continue to Plague Payments Professionals

88% of industry looking at in-house strategies to protect against cyber threats

On Aug 28, 2019

Cyber fraud and technological solutions are top of mind for finance and treasury professionals, according to a survey conducted by Cherry Hill-based TD Bank, America’s Most Convenient Bank^® at the 2019 NACHA PAYMENTS conference.

Despite craving innovation, 42% of respondents cited organizations’ struggles to improve legacy systems as the greatest challenge facing payments professionals today. Last year, 36% of survey respondents expressed that their companies need to update legacy infrastructure. This growing frustration demonstrates slow and minimal efforts to improve payments and processing systems over the last 12 months.

Treasury professionals named cybersecurity as their second greatest challenge this year, coming in at 30%, which is in line with 2018, when 32% reported this as a top obstacle. Few respondents expressed concerns about other challenges such as cross-border transactions (11%), potential for fintech regulations (7%) and data regulations like GDPR or PSD2 (6%).

Payments automate while industry stagnates

Casualties in the delay to improve antiquated internal technology are accounts payable (A/P) automation and Straight Thru Processing (STP) of payments. As a result:

• 26% of survey respondents do not yet have any payments automation or STP
• 28% of respondents whose organizations currently use both automated and manual processes say it will take more than two years to achieve full automation/STP
• 23% of finance professionals state their company has achieved full automation and STP

“Payment capabilities currently are changing at a rate that organizations cannot yet accommodate, so lagging adoption of fully automated processes within corporates is an expected outcome,” said Rick Burke, Head of Corporate Products and Services at TD Bank. “Although the need to adopt new payment methods is a global pressure from an efficiency and security standpoint, faster and automated options do not yet have a foothold within many U.S. organizations.”

Cybersecurity an unwavering threat

TD Bank’s NACHA PAYMENTS Survey shows that concerns about cybersecurity remains consistent: In 2018, 84% of payments professionals noted in TD’s survey that they anticipated payments fraud and cybersecurity to become a bigger threat in the next one to two years. This year, 85% expressed that same sentiment.

TD Bank’s studies show there is consistent fear across the payments industry of cyber fraud becoming a greater hazard or lacking containment but there is growing interest from companies to take control of and share responsibility for security internally and externally. A majority (88%) of respondents believe their organization should employ in-house security techniques, while 12% prefer to outsource prevention to an expert. Desired in-house cybersecurity measures include:

• Deploying improved security technology to protect internal networks (53%)
• Providing training to employees who deal with finances and sensitive information (23%)
• Testing employee understanding of cyber fraud and social engineering using fake spear-phishing emails (12%)

Slow and steady race for real-time payments

Payments professionals in the U.S. note they still have not fully identified a use-case for and implemented real-time payments, according to survey results. More than half (56%) of participants said it will take at least one year, if not more, to implement real-time payments within their company. Only 22% stated that they will participate in real-time payments within the next year.

“The U.S. has been behind several other countries in implementing faster and real-time payments but is gaining momentum,” said Burke. “Dialogue about payments is increasing among banks, lawmakers, policymakers and practitioners, and this is likely to drive faster change. It will be interesting to see how faster payments evolve over the next few years, especially with the Federal Reserve’s announcement that they will develop a new real-time service called FedNow.”

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