Volante provides US Fedwire as a Service to First American Trust FSB

By Sunniva Kolostyak

Payments solutions provider Volante Technologies has been selected by First American Trust FSB to provide its US Fedwire as a Service system as a replacement to legacy wire transfers.

First American Trust FSB is using Volante’s Fedwire as a Service to automate wire processing in the cloud, enabling the bank to handle increasing wire volumes without errors, duplication or delay, with 99.99 per cent availability.

Running on Microsoft Azure, it modernises the payments processing infrastructure and will in the future allow First American Trust FSB to extend the service to other available payment types, including ACH, The Clearing House RTP and SWIFT cross-border payments.

Speaking to IBS Intelligence, Deepak Gupta, Global Head, Payments as a Service (PaaS) at Volante Technologies, said multiple wire system outages, including the Finastra breach, have resulted in a number of US financial institutions losing the ability to process wires. Moreover, the coronavirus has exposed how manual processes have caused problems for bank staff, as they have been unable to access physical systems.

“Legacy wire systems cannot meet the resiliency and reliability requirements of today, let alone tomorrow. And as providing top-tier payments services becomes more of a differentiator for banks, their competitiveness will be held back by continuing to use legacy systems,” Gupta said.

Specifically, legacy systems will not be able to handle real-time 24x7x365 payment processing – which the Federal Reserve has announced will be the future of Fedwire payment services – and they are not able to handle ISO 20022 messaging standards.

“The industry standard for wire systems today is considerably less than 99.9 per cent,” Gupta continued. “As a case in point, the Finastra data breach issue had a number of banks needing to shut down their services for nearly a week.”

With about 240 business processing days in the year, a week’s loss of processing time equates to less than 98 per cent availability, translating into thousands of wires and millions of dollars in transaction value delayed or lost. However, as payments move real-time and 24×7, even small improvements in availability can deliver large cost, time, and resource savings for banks.

“Modern cloud-based services like Volante’s however can offer ‘four nines’ reliability, i.e. 99.99 per cent. This equates to only a few seconds of unplanned downtime per day – less time than it takes to press ‘Pay’ and receive an acknowledgement, which is uninterrupted service from a user perspective,” Gupta explained.

For First American Trust FSB, the service will improve resiliency and reliability, improve the ability to support the real estate and escrow market, which is their primary focus segment and allow it to handle increasing wire volumes. It also provides 40 per cent or more in savings on total cost of ownership.

Robert Lawson, Senior Vice President, Strategic Initiatives at First American Trust FSB, said the bank was looking for a service-based payments processing capability that would create greater efficiencies within the bank, and enable a superior experience for its clients.

Lawson said: “Volante’s PaaS in the cloud meets our business requirements, supports our growth, and ensures that we will be able to quickly roll out new payment services in the future.”

Also commenting, Ed Fandrey, Vice President, Financial Services at Microsoft Corp, said: “Many banks are experiencing significant growth in Fedwire volumes – and electronic payment volumes overall. Legacy systems and services cannot manage this growth and cloud-based payment processing services are an ideal resolution. With ‘cloud-first’ approaches becoming the norm for payments processing, Microsoft Azure is an ideal fit.”