03 September 2014

Gareth Ellis

gareth ellis - ACI Worldwide

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Payments infrastructures - ready for change

11 September 2009  |  1455 views  |  1

Yesterday’s key topic at the EFMA conference in Paris clearly reflected the need for adaptability and innovation in the payments industry post credit crunch. Market drivers such as the post-recession blues, compliance and SEPA have accelerated the pace of change and also highlighted the fundamental role that payments play as a reliable revenue generator for banks.

Interestingly, both Ron van Wezel from Deutsche Bank and Jean-François Denis from BNP Paribas Fortis highlighted that only by moving away from the traditional siloed structure of payments can banks become more agile and respond to customer needs more effectively.

As legacy payment systems have evolved, the infrastructures have remained siloed which led to network complexity and redundancies within systems. In addition, this makes it difficult for banks to demonstrate compliance and also to innovate in order to maintain critical payment volumes. 

The solution seems to be a move towards a service-based approach. By deconstructing legacy systems into services, banks can remove duplications and consolidate to ‘payment hubs’. This will enable banks to manage transactions quickly and effectively, decrease the need for manual intervention and costly interfaces between different systems and also quickly roll out new products to meet the changing needs of customers.

However, this change in approach won’t happen with a big bang. Banks will need to take a gradual journey towards becoming more agile over a number of years. Whilst the topic is firmly on the agenda now, this is likely to be part of banks’ ongoing conversations for some time to come...

Comments: (1)

Keith Richbell - eftpos Payments Australia Ltd. (ePAL) - Sydney | 14 September, 2009, 02:25

I find it difficult to agree with this analysis. The problem with legacy payment systems is that they have not evolved, because they were never designed to. In the days when reliability was the single most important attribute of payment systems, and the costs of owning / running them was so high, most bank IT professionals were happy just to leave them alone, chugging away in their locked down and secure environment at the back of the data centre. This was fine during the 70's, 80's and 90's but over the past decade the speed of change experienced in all aspects of banking means that such legacy systems no longer cut it. Waiting months for a minor product enhancement to be released is just not good enough when all other IT systems can be changed, tested and released in days or even hours. The need to be agile applies irrespective of a banks size, it is the difference between winning and losing. The winners will be those brave enough to ditch the old systems and all that they support, and start afresh with next generation payment systems. To do otherwise is rather like stepping into a bucket and trying to lift yourself up with the handle.

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gareth ellis

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Business Solutions Manager

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ACI Worldwide

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