IBM Modernizes Federal Reserve's Retail Payments

The Federal Reserve has tapped IBM's Financial Transaction Manager to modernize its retail payments platform.

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With its technology well-represented in the banking industry, IBM today announced that the Federal Reserve Bank of Atlanta's Retail Payments Office has selected IBM to modernize its automated clearing house (ACH) processing platform.

When conducting ACH operations, the Federal Reserve serves as the central operator ensuring that electronic payments such as direct deposits and bill payments clear and settle between commercial banks.

The Federal Reserve operates one of the largest interbank ACH and check clearing systems in the country, based out of the Atlanta Retail Payments Office. To process the billions of ACH and check payment transactions that electronically flow through its systems annually, the Federal Reserve will implement IBM's Financial Transaction Manager (FTM). The new IBM FTM for ACH software will allow the Federal Reserve Bank to input, process, clear, settle and provide billing and accounting functions for all ACH payments in all 12 districts across the Federal Reserve system.

Keith Melton, director of IBM Commerce Payments, said IBM Financial Transaction Manager simplifies the management of high-volume global payments onto a single efficient payment hub to help make payment processing more efficient and transparent.

"By modernizing our payments systems, we will be well positioned to converge our existing retail payment operations and payment infrastructure onto a unified platform," said Brian Egan, senior vice president of the Retail Payments Office of the Federal Reserve Bank of Atlanta, in a statement. "This will enable us to process payments more cost effectively and position us to more quickly adapt to changes in the ACH and electronic check payments environment. Both of these outcomes are consistent with our strategies to continue to provide financial institutions with high quality and cost effective ACH and electronic check clearing services."

In another banking scenario, last month IBM announced a deal with Abu Dhabi Islamic Bank (ADIB) to help transform how the bank interacts and provides services to customers by building a new Digital Studio with IBM consulting services. The new design studio builds on the bank's efforts to digitize its products and services. The project also includes new IBM MobileFirst for iOS banking apps supported by IBM Cloud that empower the bank's financial advisors to deliver a more engaging customer experience.

ADIB is working with experts from IBM Design and IBM Interactive Experience, the company's hybrid digital agency and consultancy, who will work side-by-side with ADIB to create personalized digital experiences such as new mobile banking apps for consumers.

"ADIB aims to be the best digital bank in the UAE and the region and is continuously investing in cutting edge technologies to enhance customer experience and introduce innovative products and solutions to meet the evolving needs of its customers," said Sagheer Mufti, COO of Abu Dhabi Islamic Bank, in a statement. "In line with our core values of simplicity and mutual benefit, we are continuously looking for ways to foster innovation to deliver greater value and superior customer experience. The introduction of a digital studio at ADIB means we now have access to a team of dedicated IBM digital experts with proven experience designing compelling financial services and solutions that will work hand in hand with our professional team to make it easier for our customers to use our products and services to seamlessly manage their financial affairs. This studio will also play a major role in driving the various initiatives and projects across the bank to accelerate its digital transformation."

In addition, IBM and ADIB will use IBM's Bluemix platform as a service to build applications that capture the disruptive potential of cognitive computing, analytics and the Internet of things (IoT).

"In today's fast moving world, one quarter-inch swipe is all it takes to lose a customer forever," said Paul Papas, global leader of IBM Interactive Experience, in a statement. "Working with ADIB we will be utilizing IBM Design Thinking to take a human centric approach to create experiences that are personalized, elegant, and empowering. Our Agile and Studio based model will enable IBM and ADIB to innovate together with speed and scale."

The bank also will deploy the IBM MobileFirst for iOS Trusted Advice app, enabling its financial advisors to manage client portfolios from their iPads. The app empowers advisors to address a variety of client needs, from testing recommendations against sophisticated modeling tools all the way to complete, secure transactions. Powered by analytics, the Trusted Advice app provides predictive information that enables advisors to gain quick insight for devising client scenarios and conduct more interactive client planning sessions.