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ACI Worldwide [NASDAQ:ACIW]: Supercharging Payment Environments

The U.S. payments market is shifting from cash and paper checks to various forms of electronic payments. The once predominantly cash-dependent domain for transactions has evolved through checks, into cards, and is now surging toward digital age innovations like virtual wallets and mobile payment platforms. Innovators are driving radical changes—from traditional players adopting various digital technologies to new-age players leveraging PayPal or Square while some are attempting to leave behind the existing payment systems entirely and move to Bitcoins. The common thread is that all of them are looking for pioneering approaches to assist consumers and businesses in the way they make purchases. Banks have progressed from developing the first credit card in 1958 to putting forth ground-breaking technologies like remote check deposit and mobile banking with online billpay capabilities. Today, they continue to push the innovation envelope to improve the banking experience for all.

Additionally, there is an emergence of several large nonbanks that are active in payments sector, including PayPal, Walmart, Google, Square, and telecommunications operators such as AT&T, Verizon, and T-Mobile. With such unprecedented developments, companies that will deliver superior benefits to the overall payments ecosystem while forming partnerships across the value chain will be successful. ACI Worldwide [NASDAQ:ACIW], the Universal Payments (UP) company, powers electronic payments for more than 5,100 organizations all over the world. ACI provides the broadest, most integrated suite of electronic payment solutions in the market, meeting the needs of today while preparing firms for tomorrow. Through their comprehensive suite of on-premise and SaaS-based solutions, ACI delivers real-time, any-to-any electronic payment capabilities and facilitates an absolute omni-channel payments experience. With UP, the company is creating a world of real-time payments using any payment type, channel, network, and currency. Their solutions enable users to innovate quickly, reduce risk and gain choice, flexibility, and control over their payment strategies. “We are proud of the talented people and proven solutions within our financial services business,” says Phil Heasley, President and CEO, ACI Worldwide.

Shifting Consumer Demands

Financial institutions today intend to create an enterprise payments environment that can support their evolving business structures. They seek an enterprise payments model that offers consumers’ insight to build personalized products and services for customers and businesses to strengthen relationships, rapidly react to fraudulent activity, and gain a competitive advantage.

Delivering on consumer expectations is rightly viewed as being central to the investments retail banks are making in their payment capabilities. As the wider customer journey has evolved, particularly across multiple channels, merchants have become more heavily focused on the payment process; in particular incorporating new products or enhancements to drive incremental sales. This may be in bringing new customer segments to merchants, delivering additional customer value around the payment process, or simply a lower friction experience that drives marginal conversion rates.


We are proud of the talented people and proven solutions within our financial services business


Providing retail banks tailored banking solutions is ACI’s Universal Online Banker, offering user-driven balance/ transaction information reporting and a user-customizable treasury dashboard. It also provides sophisticated entitlements and approval capabilities, including panel authorization, cash pooling, and extensive global payment methods. ACI Universal Online Banker lets users easily define class-of-service offerings to deliver the features, functionality, and branding the customers’ need—in a language they understand, all from a single platform.

Real-Time Banking Capabilities

With most major markets either on the path to creating immediate payment infrastructure or a live immediate payment deployment, real time payment has become of significant importance for banks. With instant payments, the users are able to benefit from being able to send real-time payments round the clock. There is a significant transformation in the customer experience as real-time payments are opening the doors to real-time banking, and the focus in the industry has begun to shift toward how IP will be able to catalyze a series of new product and service innovations.

The influence of mobile devices and the availability of internet services are key elements driving customer demand for faster, convenient, and consistent payments. Today, it can be said that financial institutions are building strategies to inject agility into all products and services ranging from digital payments representing a vital tool for customer retention to IP acting as a springboard for innovation. ACI’s UP Immediate Payments’ strategic, configurable orchestration capabilities enable users to easily adjust business rules and transaction processing flows to offer differentiated services to customers, avoiding the need for expensive point-to-point, hard-coded maintenance. The flexible foundation makes it easy to add incremental functionality for new schemes as they occur, enabling firms to quickly enter new markets or accommodate new requirements on the fly.

The Rising Need for Security

As a result of a series of high profile data breaches in the U.S. recently, security has become a growing concern for financial institutions. With increasing customer data at hand, banks are concerned over the escalating number of hacking incidents that can breach their systems and steal sensitive data. Evolving with next-generation technology enables financial institutions to integrate a complete fraud approach pan enterprise. This includes fraud detection as a core component in all products, services, and channels. According to 2016 Ovum Global Payments Insight Survey for retail banks, at a global level, 70 percent of banks report that they have recently or are currently investing in various security initiatives.

ACI’s Proactive Risk Manager accepts transactions from any retail or wholesale bank channel and easily interoperates with existing authorization and end-of-day batch processing systems. Designed to increase the effectiveness of Proactive Risk Manager and optimize financial institutions’ fraud management operations, ACI Analytics includes consultancy strategies, sophisticated models, and strategic planning to meet complex risk strategy needs. Through the full portfolio of ACI Analytics services, clients have access to sophisticated fraud detection techniques for cards (ATM, debit and credit), credit abuse, bust-out, Automated Clearing House, and online banking fraud. ACI’s in-house and partner modeling teams have specialized scientists and staff with deep fraud management domain expertise and experience. ACI can deliver a complete suite of advanced predictive analytic techniques including neural network models deployed to detect virtually all types of financial crime.

"We have built on a series of recent milestones and investments which will propel ACI into a leadership position"

Similar to various banks around the world, Türk Ekonomi Bankası (TEB)—regional bank of Turkey—faced a growing fraud threat after merging with Fortis Turkey. The bank was trying to counter the problem with a series of disparate solutions that were not able to provide a complete picture of fraudulent activity or keep up to date with new types of attacks. TEB chose to implement ACI Proactive Risk Manager across all major payment channels. Since the initial implementation, the inherent flexibility within Proactive Risk Manager has allowed the bank to add innovative, bespoke developments to combat specific problems as they arise. The solutions assisted TEB to protect more than $4 million worth of transactions and detect more than 92 percent of fraud across all card transactions.

Making Payments Easier for the Future

The retail payments industry is an increasingly competitive space, and banks continuously face mounting pressure. They need to address the changing expectations of customers for enhanced payment experiences while also, in some cases, managing legacy IT with tight budget constraints. ACI’s comprehensive suite of products is highly differentiated in large-scale, complex technology environments and has been proven in the world’s most demanding scenarios. “We have built on a series of recent milestones and investments which will propel ACI into a leadership position in the fast-growing eCommerce and retailer omni-channel payments markets. We also have plans to enhance our new ACI UP Retail Payments solution,” concludes Heasley.

- Eileen Singh
    July 25, 2016