Chief Product Officer, Form3
Looking ahead, banks will no longer run payment technology or host infrastructure. Mutualisation and shared API based functionality are the future of globalisation in payments
The infrastructure of payments is now a battleground. A battle to scale, a battle to ensure compliance and a battle of resilience against cybercrime. But financial institutions no longer need to enact these changes themselves and they don’t need to be managing infrastructure. They do, however, want to be able to move fast, scale fast and do so at low cost and low risk.
Changing the way banks think about platform
Cloud native technology provides speed, scale, resilience and repeatability. The new building blocks for enabling rapid change and scaling for financial institutions are API’s, microservices and containers. This shift in the way banks think about platform is growing, and the direction of travel is towards a mutualised payments environment.
Evidence shows that financial institutions (FI’s) are now happy to place mission critical processes onto a shared platform. Cloud-native technology is now proven at an industrial scale and confidence is high and growing.
Certainly in the UK, banks are now accelerating their payments modernisation programmes, partnering with specialist technology providers to move their payments infrastructure to a cloud platform model. Europe is now also poised to follow the UK and make the shift in order to capitalise on the cost, risk, scale and resilience benefits that only the cloud brings.
Gone are the days of heavily customised, bespoke platforms with bi-annual release schedules and big-bang migrations. Today, mutualisation and streamlined, shared API-based functionality for the ‘benefit of all’ is the future of globalisation in payments.
Europe is now also poised to follow the UK and make the shift in order to capitalise on the cost, risk, scale and resilience benefits that only the cloud brings.
Competing on a level playing field
Cloud native technology enables rapid deployment in new territories as solutions can be designed and deployed very quickly with simple development required to meet local standards. To launch in a new country or region is dramatically simplified and becomes available to everyone in the eco-system, immediately.
The growth of digital and new initiatives like open banking means competition is fierce – both within consumer and corporate banking. New entrants are disrupting the industry and bringing new digital offerings to the masses in quick form. They are unburdened from the legacy technology that plagues the incumbents and are able to grow very quickly in new markets.
Banks have size on their side, but size isn’t a guarantee of success. It is by modernising both the front and back-end infrastructure that will enable the level of business agility in order to complete on a level playing field with new challengers.