Why financial institutions are banking on cloud-native technology to stay competitive

Digital banking has exploded, fueled by growing digital confidence, technology advancement and new, agile challenger banks but also a global pandemic creating an almost overnight shift in how both businesses and consumers move money.

Pre-Covid, digital transformation was already gaining importance among UK and European Banks as a strategic necessity to compete on a level playing field, ensure resilience and scale while lowering costs. As the world faces a new set of challenges and a new normal, accelerating these transformation agendas is now critical.

In the past few months there has been a huge movement to the use of cards and account to account payments.  According to the recent EY Future Consumer index, 62% of consumers said they will use less cash in the future and 59% expect to use more contactless payments going forward.

This means more pressure for Banks and regulated Fintechs to deliver the infrastructure, applications and security required to maintain world-class digital payment experiences for their customers. And not just

looking at digital transformation from a product-delivery layer or as a process cost cutting exercise, but the complete end to end journey for customers – the payment initiation, the processing layer, clearing and settlement and reconciliation and notification. Leveraging technology to underpin every process from the front-end to the back-office processing powerhouse needs to be future proof, cost efficient and scalable on demand. More importantly it all needs to happen in a matter of minutes or even better - in real-time.

The ability to create an online account in just three mins or make a payment in seconds is now expected compared to waiting a few hours or days in the recent past. But digitising traditional manual processes or redesigning them to make experiences more intuitive and responsive only goes so far if the core infrastructure is creaking at the seams to cope. Financial institutions must instead start by assessing their core back-office infrastructure – the engine that makes it all happen.

Payment processing is a high stakes operation and is becoming more so as we move towards real-time processing and rapidly growing volumes. There has never been a better time to partner with a specialist fintech to deliver a complete, end to end, 24/7 managed service in the cloud.

Adopting a Payments-as-a-Service platform (PaaS) significantly lowers capital expenditure when compared to managing and maintaining expensive and rigid on-premise systems.  It also lowers operational risk as the constraints of legacy internal IT systems are removed through the agility enabled by a cloud-based PaaS.

Moving your payments infrastructure to a fully managed service in the cloud offers many advantages including:

• Connecting to global payment schemes via a single API with 24/7 operational support and continuous adherence to scheme rules. No need for your operational teams to service different schemes, it’s all done for you.
• A multi-tenanted environment with continuous updates means that all customers have access to the latest functionality and security updates as well as ensuring a rapid response to incidents due to the homogeneity of the codebase.   
• New applications can be created and deployed to market quickly without the need to spend time and money building and maintaining an infrastructure that includes servers and databases.
• The entire end to end journey of a payment is managed for you so there is no hardware, no software, no maintenance and no downtime.
• As a fully managed service, scaling is automatic as payments and volumes are constantly tracked to ensure capacity is always available so the service adapts as your business needs grow.

Payments-as-a-Service platforms are being adopted by both Tier1 banks and regulated, fast growing Fintechs across Europe to ensure future resiliency, business agility and scalability as they expand into new markets, develop and deploy new propositions and look to improve the customer experience.

A modern, ‘everything instant’ digital world needs next generation payments technology innovation.  It makes perfect sense to rationalise payment processing into a single, integrated platform. Integrate once and access multiple payment schemes through the same API. This removes the need for custom applications and many different messaging formats in order to access central payment infrastructure.

 Harnessing open APIs helps standardise and simplify payments processing to create a strong foundation to deploy new products quickly, streamline operations and lower costs. A cloud-native platform further ensures the highest levels of security so that you can lower operational risk by removing the infrastructure burden.

Through outsourcing payments infrastructure efficiently at speed and scale, financial institutions are simply able to devote resources to servicing their customers better.