Payments modernisation seen as top priority for banking industry
03 December 2014 | 20915 views | 30
More than two-thirds of banks plan to modernise their payments systems to accommodate demand for mobile and immediate payments and head off competition from disruptive competitors, according to data from Ovum.
The Ovum ICT Enterprise Insights programme, based on interviews with 6500 senior IT executives, reveals that the payments industry is set to be a key area of focus for banks across the globe in 2015. In most instances, less than a third of surveyed respondents claim that they will be maintaining their payments technology in its current state.
Banks that have so far been reluctant to foray into the digital wallet arena are set to finally take the plunge, with 23% of respondents placing the technology as their top investment priority. Mobile proximity payments, incorporating NFC and QR codes held the second highest priority level at 17.6%.
Alongside these new areas, immediate payments technologies are quickly emerging as the next wave of global payment innovation, with products in this area being a top three investment priority for nearly 48% of respondents. Underpinning this is a strong appetite for payments modernisation particularly for critical payment functions such as switching, clearing and settlement.
Chief amongst infrastructure priorities are payment switching and authorisation (42.2% citing it as a priority, and 21.8% as a top priority), clearing and settlement (49.2% citing it as a priority, and 18.4% as a top priority) and payment operations (45.4% citing it as a priority and 17.1% as a top priority).
Gilles Ubaghs, senior analyst in the Ovum Financial Services Technology team says: “Payments has now reached a critical inflection point, with banks almost regardless of region choosing to make investment in this area a top priority. Banks realise the importance of enabling payment innovation and diversification, which in turn is driving much needed infrastructure that is both flexible and configurable. Vendors themselves should now focus on implementation and modernisation strategies for their own critical payments infrastructure - with flexibility in mind given the diverse range of payments technologies now emerging.”