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Putting payments hubs to work

Payments services hubs have long been talked about in the industry. The good news is that we’re now finally starting to see some successful roll-outs of these – SBSA’s being the most recent. But the implementation of a payments services hub is just the start of the journey. How banks use their hub to enhance their existing infrastructure is what can truly make all the difference.


Multiple operations projects and initiatives are a fact of banking today. And, understandably, nearly all institutions comprise a complex mix of legacy applications, silos, processes and procedures. The introduction of a payments services hub must therefore be in conjunction with a fully coordinated payments strategy – one that recognises what’s beyond the project in hand. Without this, the hub can’t be fully exploited, further fuelling the disjointed nature of the banking environment.


What distinguishes a hub from just another payments component is genuine flexibility. It’s being able to fit into a complex environment and talk to other systems – even legacy ones. It’s using data from these applications to enrich the payments process. And it’s making what banks already have in place work more effectively – improving payments services.


This level of flexibility means the hub can work in conjunction with processing, accounting and reporting systems, while also linking to other services, such as FX. A rigid payments approach simply cannot achieve this.


While hubs can certainly optimise existing infrastructure, banks must also realise that they cannot resolve all problems. For example, front-end manual processing will still lead to headaches due to their error-prone, time-consuming nature. Banks therefore need to look at the big picture for payments and use the implementation of a hub to modernise operations. Not everything has to be done at once, but a coordinated strategy will certainly help realise an even faster return on investment in a payments services hub.


Comments: (1)

Barry Kislingbury
Barry Kislingbury - ACI Worldwide - London 10 May, 2010, 16:36Be the first to give this comment the thumbs up 0 likes

Payment hubs have been around for a long time (arguably Logica's BESS and IBM Merva are payment hubs).  They are not new per se, but many payment engine vendors have jumped on the band wagon and are using the hot term "payment hub" to give a new lease of life to what they used to call a “payment engine”.

What these older technology products can't do is change quickly, this never used to be a problem, but it is now with those annoying regulators and customers demanding improvements.  But a wholesale upgrade of a payment engine is just too big, so an alternative is needed.  This is where the term payment hub comes in; payment hubs are based on modern agile technology that allows their functions to be shared as services in a SOA.  They also don’t dictate the wholesale replacement of legacy application (as Richard says they can work along side them) and they manage and integrate the flow of payments through some or all the banks systems (allows for a low impact phased installation), normalizing and centralizing payment flows making management of the clients and reporting to regulators much easier. 

Having helped several banks modernize their payment infrastructures in the past few years, we have seen this lower impact approach gaining wide acceptance. This might be the reason many legacy payment engine vendors have re-branded their products as hubs.

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