The benefits to financial institutions of flexibility, responsiveness and agility are well recognized. Organizations will be able to do more with less. Centralized, integrated and fluid payment systems support operational efficiencies and the development
of innovative initiatives that enhance product and service offerings.
But legacy systems are so entrenched in financial institutions’ business DNA that replacing them is a daunting task. The complexity should not be ignored or underestimated, and no two organizations will have the same path to success. The most important factor
is that change shouldn’t be radical – to be successful change must be well thought out across the bank, even if the initial steps are just in one department. Organizations should start tactically by thinking strategically so change being made in one part of
the bank will fit with changes being made elsewhere now or in the future.
There are a number of steps involved in moving forward to payment systems. The first is to know your starting point – if you don’t know where you are then planning a route forward is impossible. One tool for this is the Payments Maturity Model (PMM), which
I have spoken about before. The PMM provides a tool for financial institutions, processors or retailers to gauge the maturity of their different systems and processes against five stages – reliable, scalable, efficient, responsive and agile. From that, they
can identify areas that are stronger or weaker than others, and help prioritize plans for evolving payment systems.
It is then important to look at where existing components can be consolidated onto a unified platform. Commonality of platform, database or server can deliver cost savings, even before a long term project starts to move to payments maturity, and enables
an organization to take stock of the current payment landscape, including people, processes, technology, applications networks, costs etc. But this must all be done under the banner of ‘start tactically by thinking strategically’, so even if a project starts
in just one part of the institution, the bigger picture has been taken into consideration.
The organization must know the objectives of any change program – for any journey you have to know where you want to get to, as well as where you are starting from. These objectives could be for growth through market share or into new areas or geographies;
cost reduction; target on specific markets or perhaps to be able to implement cutting edge technology more quickly – what is important is that the objective is known. Then the organizations can look at its existing investments to decide how far current systems
can support the desired outcome, and what changes will be required, to build the impact assessment for the project. This enables the project team to build the business case and plan the change needed.
I firmly believe that, to be successful, any major change project needs to have commitment from leadership to support the initiative, and to help create a can-do culture in the organization. But with careful planning and a long term view, with short and
medium term goals, evolving payment systems can be a very manageable project.