KPMG is guiding the development of the New Payments Platform – a vast collaboration project with 13 major financial institutions and payments companies – which is set to change the way Australian businesses and consumers handle transactions.
The New Payments Platform (NPP) is a demonstration in how a seemingly insurmountable task can be overcome with a sound strategy, innovation, processes and collaboration.
Its development began in 2012, when the Reserve Bank of Australia (RBA) announced its intention for Australia to have real-time payments between financial institutions.
In 2013, KPMG was chosen as Program Manager of the NPP, a task which relied on the cooperation of 13 of Australia’s largest financial institutions and NPP Australia Ltd.
KPMG was challenged to develop an initial design for what the NPP could look like. It needed to be a platform that could facilitate all of the different systems used by the banking organisations; payments in real time (or very close to); and be suitable for future innovations – in other words for third parties to create great services over time that could be delivered via the technology.
The NPP design also had to be ‘future proof’ due to the immensely fast changes in technology and consumer expectations. The team needed to ask question such as ‘what will businesses demand in the next 3 to 4 years?’ ‘What will consumers demand?’ The platform needed to facilitate continual upgrades as technology moves on.
Thirteen usually competitive organisations – ANZ, CBA, NAB, Westpac, Australian Settlements Limited, Bendigo & Adelaide Bank, Citigroup, Cuscal, HSBC, Indue, ING Direct, Macquarie and the Reserve Bank of Australia’s Banking Services Department – are collectively investing approximately $1 billion into the project. NPP Australia Ltd and vendors, SWIFT and BPAY have also been intimately involved along the way. It is important they are all satisfied with every step in the strategy.
Fundamentally, they all had to agree on the answer to one question – how could payments work better for Australian businesses, consumers and government?
After a lengthy, detailed and collaborative design process, we went to market to find the right technology infrastructure vendor to create the platform. The vendor selection process took almost a year, due to the requirements for both privacy and transparency, as well as alignment between 13 different organisations.
We ran a similar process to source the provider of the Initial Convenience Service, Osko by BPAY, which will be the first Overlay Service to use the platform. KPMG helped to smooth out the process by setting up market stall events where prospective vendors could pitch their capabilities, and representatives from the financial institutions could see all the options in one place at one time.
Once a shortlist was established, KPMG managed the detailed negotiations. Ultimately SWIFT was selected and the next stages of development and implementation began.
Twenty full time KPMG staff have been involved in the NPP program, across London, Melbourne and Sydney offices. As new challenges and complexities arise, additional experts from across the business are drawn upon to help find innovative solutions. These include experts from Transformational Program Management, Customer & Operations, U-Collaborate, Tech Risk Advisory, Shared Services & Outsourcing, and Financial Risk Management teams.
One of the requirements of the NPP was that it should be a platform for innovation, enabling ‘overlay services’. These are products or services that utilise the NPP to provide tailored, value adding payment experiences.
BPAY is the first to provide an overlay service on the platform – Osko. The product helps BPAY clients to facilitate payments in real time. It offers the ability to attach documents to payments, make payment requests and put in much more detail (up to 280 characters) into payment descriptions.
The NPP is expected to change the future of payments across all parts of the Australian economy, from consumer transactions to small business, large corporations and governments.
For example, for small business it will make a vast difference to their cash flow management. For corporates, the speed of transactions will offer liquidity. For government, the ability to make emergency payments (for example after flooding or bushfire) in seconds is just one of many benefits.
One of the biggest insights gained from the NPP development process is that collaboration between major competitors is possible when they are all working towards an important cause
KPMG harnessed their full support, and with NPP Australia Ltd, has facilitated their joint focus on developing the breakthrough platform. The team coordinated the build and testing of infrastructure – working through the complexities of each bank and hundreds of different systems.
Now, with the NPP setting global benchmarks for real-time payments, other countries will no doubt be looking to replicate its success.