Fed hires McKinsey to support Faster Payments Task Force

09 May 2016 Consultancy.uk

To support the development and roll out of new payment systems in the US, the US Federal Reserve last year launched the Faster Payments Task Force. The task force seeks to promote faster payment capabilities throughout the country, as well as assess proposals for improved payment systems. To support the assessment process, McKinsey & Company has been called in.

A safe and efficient payment system has the potential, among others, to reduce payment barriers for underserved US citizens and speed up domestic and international trade. New technologies have, in recent years, created considerable potential for disruptive new payment systems – as well as bringing new problems along with them, surrounding network and personal data security.

The US Federal Reserve, in a bid to stimulate the development of the payment systems landscape, set up a 331-member Faster Payments Task Force in 2015. The task force seeks to create a framework for the development of a new payment system, including a range of 36 criteria for systems, as well as assess options – proposed by stakeholders – that would achieve the desired outcomes. The Fed taskforce, in addition, examines policy issues surrounding a proposed new payment system, leverage stakeholder input and analysis, identify effective approaches for implementing faster payments, and support stakeholder efforts to implement new systems.

To support the assessment process, the task force has called in McKinsey & Company. The firm was selected following a competitive process, and is funded by the Fed – although the figures have not been disclosed.

The consultancy firm is tasked with assessing the different payment system proposals against the 36 criteria developed by the task force, the process itself will be overseen by a committee within the task force. Following the assessment of proposals, the full task force will be able to provide input, in the form of review and comments, later in 2016, with the results from the process to be published in 2017. The final published document will, in addition, consider environmental factors – including business conditions and public policy – that impact the development of new payment systems. 

"The process established by the task force ensures a fair, consistent, and quality assessment of solution proposals, while bringing forward task force members' comments and diverse perspectives," says Sean Rodriguez, the Federal Reserve's faster Payments Strategy Leader and Chair of the task force. "Importantly, the proposal assessments and the broader task force input are designed to enhance solution designs and help ensure that effective faster payments capabilities are implemented in the United States in a reasonable time frame."

"The task force members wanted a firm with broad payments expertise to assess proposals against the comprehensive effectiveness criteria they published in February," says Gordon Werkema, the Federal Reserve's Payments Strategy Director. "McKinsey was chosen through a competitive bid process that considered expertise, ability to conduct an independent assessment, proposed assessment approach, and cost."

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How data insights helped Network Rail improve the South-East route

11 April 2019 Consultancy.uk

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.