Smart Routing:
Benefits as a Payment Pre-processing Service

In today’s rapidly evolving market, whether it’s choosing the right domestic payment channel, identifying the right correspondent bank or having to complete a cross-border payment in the absence of a correspondent, banks have to enrich their payment platforms with multiple payment rails for clearing and settlement. This is where smart routing becomes relevant in payments pre-processing.

The Challenge: Overheads associated with engaging new payment rails

Adding new payment rails and demonstrating abilities to clear payments have become a trivial exercise. The API based communication has opened doors for simplicity in integration and exchange of data. However, engaging the payment rail to a bank’s payment processing services calls for heavy disruptions. A disruption to a core system itself has proved to be extremely expensive, time consuming, clunky and error prone. This is where the concept of “smart routing” grabs the attention of the payment applications or platforms.

Why smart routing for your platform?

Banks, and financial institutions now have an enriched payment platforms with multiple payment network options, payment service providers and correspondents to choose from to process their various types of payments. They need to ensure that each transaction is directed to the optimal route to reduce per transaction cost, settlement time and to ensure compliance with their business operations and regulations. This complicated decision making can be automated quite simply with the help of an intelligent routing engine. With smart routing, financial institutions can intelligently route individual payments to the most optimal channel or prioritize the end customer preferences without involving complex processing rules in their internal systems. Whether banks have specific routing rules to comply with based on their business operations or whether their customers seek the quickest or the most cost-effective payment channel; smart routing enables financial institutions to tailor their approach to these preferences.

Smart routing can be engaged for optimizing automatic routing in both domestic and cross-border payments. In a dynamic market landscape characterized by a growing number of payment networks / service providers in cross-border payments, banks could optimize the routing of their cross-border transactions globally. Whether the payment networks be Swift or non-Swift options such as NIUM, Western Union, Visa B2B, and Mastercard etc.; with smart routing, banks can strategically choose the most cost-effective or fastest route for these transactions.

The integrated solution can provide access to the latest payment innovations so financial institutions gain 50 percent of savings and improvement in time to revenue.

Resilient, future-proof and responsive architecture

The smart routing feature in IMS Payments has become an increasingly crucial tool that enables banks to swiftly align their capabilities with the changing requirements of the global market. It also offers the technological agility required to identify the optimal payment routes for clients amid a progressively diverse and intricate payment environment.

A single integration with the internal system.
Zero payment processing logic within CBS.
Explore multiple routing options for better pricing and settlement time.
Offer/Extend options to customers (digital bank).
Alternate Routing easily engaged.
Accommodate customer preferences, market practices, operational preferences, and compliance needs using simple parameter settings.
Eliminate writing hundreds of rules related to operational preferences, market practices, regulatory requirements, customer needs, payment types, payment purpose etc. that can affect decisions pertaining to selection of most appropriate channel for clearing and settling each payment individually.