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Future-proofing payments technology with cloud migration

Future-proofing payments technology with cloud migration

Consumer expectations, behaviour and payment preferences are and will continue to evolve at an accelerated rate.

As a result, payments processors and issuing banks must ensure they are technology-enabled and software-driven so that the financial products and services they provide are future-proofed, ready for today and tomorrow.

This is an extract from ‘Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies,’ a Finextra Research impact study in association with Global Payments, part of the AWS Cloud Series.

Driving digital experiences

In an attempt to keep pace with competitors, banks must recognise that collaboration between payment players and cloud service providers will help drive frictionless, more secure digital experiences for consumers.

This is of paramount importance in a world where resilient commerce through contactless interactions – at scale – is key.

However, some institutions are still offering traditional premise-bound services and aren’t taking advantage of the innovative technologies available in market today. In order to remain relevant, these organisations must be flexible, accelerate speed to market and provide best-in-class experiences for their customers.

According to a McKinsey survey, banks that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversion rates and growth by 20%.

The advantages of keeping pace

From extending their footprint into new products, services and markets, to innovating and creating next generation, digital focused banking solutions, the goal for financial institutions is to meet the demands of the connected, digital world and keep pace with ever-changing consumers’ preferences.

Against a backdrop of new payments startups, legacy players don’t have the benefit of starting from scratch, but do have the advantage of a large customer base.

While cloud technology can support digital transformation, financial institutions, retailers and new market entrants will also realise the benefits of a collaboration between the likes of Global Payments and Amazon Web Services (AWS) and how it will lead to more secure, reliable and innovative solutions for the payments industry at scale.

Click here to read ‘Embracing the New Paradigm of Cloud Migration to Future-Proof Payments Technologies.'

Comments: (5)

A Finextra member
A Finextra member 07 January, 2021, 15:051 like 1 like

I don't belive anything McKinsey says based on the bad audit results like the WireCard audits resulted in BILLIONS of $$$$$ that came up misiing.

A Finextra member
A Finextra member 11 January, 2021, 11:162 likes 2 likes

An interesting paper from Finextra and Global Payments. Key take-aways: cloud-native architectures key to cloud-migration; machine learning usage across the end-to-end payments chain to constantly improve service; API-centric architectures key to rapid extensibility expected in the 21st century.  All key attributes in the Reno-Cloud suite which is the leading cloud-native product for cards payments and slef-service processing.

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 22 February, 2021, 11:381 like 1 like

So it seems this study is not aware of how the actual payment systems work. You cannot connect directly to say FPS in the UK from the Cloud, and thats for a few reasons. The first is the reliance on an HSM which is of a specification that cloud providers dont really require, but its in the rules. Secondly is the dependency on the physical connectivity infrastructure so you end up on prem. 

Its all well and good to talk about cloud in this way, but you need to have an understanding of where cloud isnt possible when writting such studies. Sure you can build your software in the cloud, but your underlying networking will still have to go through on-prem and this causes challenges and negates some benefits of the cloud.

Dont get me wrong, i am an advocate of building all your payment capability in the cloud, but just be aware that for majority of payment systems, you will still need an onprem footprint - and that seems to be the way for sometime. I personally think that is an argument to leverage BaaS type infrastructure plays to remove that dependency .... 

A Finextra member
A Finextra member 22 February, 2021, 11:431 like 1 like

Andrew Smith - good point about the HSM support.  This was an early inhibitor to our deployment of cards infrastrcuture in the cloud.  Both MyHSM and Virtucrypt have solved that problem for the self-service and cards payments channels. The underyling hardware of those cloud-based HSM services is Thales and Futurex. This is the same hardware used in immediate payments schemes, so I suspect that this barrier will be eliminated soon.

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 22 February, 2021, 16:301 like 1 like

Yes Azure allows you to "bring your own" now to solve this too. However, the challenge is still there re some of the underlying telecommunications for certain payment systems....However, it will all change over time.