In Q1 2017 NACHA invited respondents to provide information on a concept to utilize the ACH Network for a new, ubiquitous capability to exchange non-monetary messaging between financial institutions. Closed for comment March 24, 2017.
Currently, requests and responses for various types of ACH-related documents and other related information are handled outside of the ACH Network via manual processes. This Request for Information was issued to obtain industry feedback on new, conceptual ACH Network functionality, and to stimulate industry thinking about the uses for moving information.
The technical subgroup recommended the use of non-monetary ACH Entries with buildable addenda records to pass messages (requests and responses)
Document Repository Concept
Responders would upload the requested document to the repository.
Repository would create an encrypted key, inserted into the response addenda record.
Upon receipt, the requesting financial institution would utilize the encrypted key to securely access the document
These impacts would be offset by the efficiencies gained by substantially reducing or eliminating manual processes to make and respond to requests, as well as the potential for future innovative uses taking advantage of the groundwork completed
No FAQs at this time
RESULTS OF THE FEBRUARY 2017 REQUEST FOR INFORMATION ON DFI TO DFI MESSAGING SEPTEMBER 1, 2017
NACHA issued a Request for Information (RFI) on February 9, 2017, related to a concept to utilize the ACH Network for a new, ubiquitous capability to exchange non-monetary messaging between financial institutions. The request invited respondents to provide feedback on a new, conceptual ACH Network functionality, and intended to stimulate industry thinking about the uses for moving information and documents related to payments. Comments were due by March 24, 2017.
Through dialogue and collaboration, NACHA continuously works with the financial services industry and ACH Network participants to make improvements to the NACHA Operating Rules. An RFI is the step in which NACHA gains feedback on ideas around general concepts for changes in the network. (More information on NACHA's rulemaking process can be found at https://www.nacha.org/rules/rulemaking-process.)
Responses and Respondent Demographics
NACHA received 70 responses to the RFI, including 65 surveys and 5 comment letters. Respondents included:
Financial Institutions - 52
Vendors/processors - 6
Regional Payments Associations - 5
End-users - 1
ACH Operator - 1
Regional Payments Associations - 3
ACH Operators - 1
Associations representing financial institutions - 1
Industry feedback general consensus was that efficiencies in network processing could be gained by addressing the pain points indicated in the original six use cases identified, and that innovation should be supported in the future.
General Feedback Next Steps
NACHA will take the industry input provided in the DFI to DFI Messaging RFI responses to further quantify volumes and costs currently incurred by participants handling these certain network exception processes and, also, the potential cost savings for financial institutions. Messaging system options will also be explored, along with costs and impacts, as compared to potential benefits. A Request for Comment based upon these findings and subsequent ACH Network rule recommendations may be issued in 4Q 2017.
Concept and Use Cases
The majority of respondents indicated agreement that a financial institution messaging system could reduce or eliminate the costs related to the manual processes associated with the request types indicated in the RFI. Additionally, the industry indicated strong support for mandating a single solution for message handling, thereby ensuring ubiquity and a stronger business case for related network changes.
Where uncertainty lay for approximately 42% of respondents was within the impacts of the potential solution, as compared to the benefits. The industry requested additional support from NACHA in determining a supporting financial business case.
Respondents strongly validated the six use cases identified for candidates for a messaging framework:
Information received indicated less support for the potential future use cases of mandatory Prenotification responses and Request for ACH Credit, and that these may prove to have more complex requirements.
The concept of utilizing a centralized repository to support the exchange of documentation was largely supported by the industry, with additional exploration around design and security requirements needed.
The industry was also largely supportive of strengthening rule language around ODFI-initiated requests for return to eliminate a separate letter of indemnity provision to the RDFI.
Results around volumes, times spent doing various activities, and processes varied greatly based upon size; volumes for requests being made and received per month ranged from:
Requests for proof of authorization and ODFI-initiated requests for return were the top two requests based upon volumes provided.
Most respondents indicated they were performing manual, time consuming processes to determine how/where to send the request and handling duplicate requests, both sending and receiving. The average time spent on activities ranged from 15 to 20 minutes per individual request.
Information provided in this portion of the survey provides the starting basis for the financial business case and further analysis will be focused on these results. Time indicated by respondents as being spent on processes that a messaging system could eliminate will be used in calculating potential industry cost savings.
The Technical Aspets portion of the RFI survey was optional to complete; however, of the two thirds of respondents that completed this section, over 85% agreed with the messaging format examples provided in the RFI. Additionally, 68% of these respondents agreed with the concept of mandatory response to all forward requests.
Implementation and Impacts
Feedback reflected that respondents were split when asked about a preference for a single or phased implementation. Responses indicated a moderate amount of impact to implement a messaging system; however comments consistently indicated that the ROI would need to be proven to justify any costs assumed in this realm.