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Payments modernisation the true story

Much is written and researched on payment service hubs today and the conclusions from this work raise some sound arguments.


Modernisation of the core payments technology in a financial institution is a major undertaking and goes far beyond the implementation of software. The bank’s wider strategic direction is a precursor for a payments transformation programme. The move from legacy infrastructure to modern architecture is a major undertaking – whether insourced or outsourced.


As it implies, payments transformation means significant change. These projects can run over several years, as it simply isn’t possible to replace all legacy infrastructure overnight. Such a programme needs to encompass both imminent and anticipated business needs. It needs to establish the business case for change – how the benefits will be realised, the design of the target model and the delivery solution. It should also consider change management for people, systems and processes as well as the selection of the appropriate partners.


The reality of payments modernisation today, however, is very different to this. No bank programme of change is going to declare anything less than success, but what is the true story? Here are the common pitfalls of banks starting out on transformation projects:


·         Embarking on programmes through traditional feature-based product selection rather than designing the required solution first.


·         Technology-led projects that lack business buy-in, business case and or realisation model.


·         Important questions left unanswered, e.g. is this a truly modern architecture; can this process all payments; can this cope in a multi-entity, multi-lingual, multi-currency, multi-time zone environment; and can this cooperate with other banking applications?


·         The consequences of the move away from an IT set-up to a business-rules approach, where change is managed by the business user are not fully considered.


·         Lack of awareness that successful projects will require domain expertise and consultancy skills from the vendors, and cooperative planning of the implementation, on top of product knowledge.


Payments modernisation is an important transformation journey. Banks need to ensure that their strategy is fully aligned with the long-term roadmap, that they have taken on-board forthcoming integration challenges, and that they have closely considered return on investment objectives. A service level payments hub should not be purely technology-driven and must be more than just a framework. It should be a business solution supported by the expertise and experience that’s necessary to deliver a world class payments service.  






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