Driven by a wide range of pressing factors, some of which are regulatory, others relate to advances required in payments business services and changing market demands, banks and credit unions are highly motivated to modernize their payment capabilities. But in doing so, the journey of modernization, there are several key themes that each institution should focus upon in defining and executing that solution strategy. These themes are key to a bank’s future success. They create the foundation for functional and technical capabilities that are critical in supporting growth, innovation, compliance, and ultimately success in the digital payment era.
- ISO 20022 is the messaging standard that the vast majority of new clearing mechanisms, both high and low value, both cross border and domestic, are based upon. Solutions must excel at managing the nuances of the standard, in all its uses and forms.
- Architecture/ Technology
- Componentized – Ability to control the calling and linking of functions.
- Configuring agile, responsive ecosystems.
- Tooling – Empowering the organization to meet specific needs and address new demands.
- Frameworks – Accelerating the delivery of new projects and managing change.
- Cloud native – Critical to be able to take advantage of cloud technologies and advances in processing capacity.
- API First – Providing access to functions and data that seamlessly link external and internal services.
- Microservices – Ability to reuse and scale distinct processes, deploying into container technologies to leverage new facilities.
- Universal & End-to-End Coverage – Many banks rely on multiple systems to process different payment types and/or supporting different payment rails. This processing environment has usually evolved over the years as different initiatives were serviced by new programs, introducing new systems focused on specific processes or transaction flows.
- Operational Optimization — Ensuring the optimization of processing must be placed at the heart of any payment’s modernization journey. As markets expand, and volumes increase, and customer demands become more sophisticated, each bank must elevate its service levels to remain competitive and relevant.
- Real Time – Coupled with ISO 20022, Real-time or Instant payment schemes create a range of pervasive challenges in payment processing that must be addressed through a program of modernization. Real-time payment services have become the backbone of the digital payments age driven as they are by e-commerce and a market that demands instant gratification and value.
- SaaS – The emergence of cloud deployment as a viable option for banks, and now, more importantly, SaaS as an offering, creates a major step forward in a very positive direction.