Banks are increasingly outsourcing their core payments platform technology and operations. Reasons boil down to maintaining legacy payment systems which were then bespoke built and the flexibility to add features in an agile manner to be well within the timelines of regulatory changes like #PSD2 and #CCPA or huge market infrastructure changes like #ISO20022.
A seamless, single payments service that is managing the related process, product and transaction complexity by design and architecture while securely connecting with the banks services through secure and managed APIs, executing all payment types is what banks need and what customers expect.
So, why not a PaaS layer which would perform related services like Sanctions Screening, reconciliations, Transaction Status Monitoring, Exception Management and Client APIs.
This will directly impact a banks view on CapEx while predicting OpEx for payment services. That is by renting the service ‘what is required now approach’ with a flexibility to add new functions.
So instead of continuing to invest in banks multi-year in-house payment ‘platforms’ (with uncertain delivery outcomes) and operations, it seems common sense to use specialized payments providers, better suited to manage technology, operations, and optimization thereof to provide a disruption-less service to the market and its participants.
