Payments infrastructures - ready for change

Yesterday’s key topic at the EFMA conference in Paris clearly reflected the need for adaptability and innovation in the payments industry post credit crunch. Market drivers such as the post-recession blues, compliance and SEPA have accelerated the pace of change and also highlighted the fundamental role that payments play as a reliable revenue generator for banks.

Interestingly, both Ron van Wezel from Deutsche Bank and Jean-François Denis from BNP Paribas Fortis highlighted that only by moving away from the traditional siloed structure of payments can banks become more agile and respond to customer needs more effectively.

As legacy payment systems have evolved, the infrastructures have remained siloed which led to network complexity and redundancies within systems. In addition, this makes it difficult for banks to demonstrate compliance and also to innovate in order to maintain critical payment volumes. 

The solution seems to be a move towards a service-based approach. By deconstructing legacy systems into services, banks can remove duplications and consolidate to ‘payment hubs’. This will enable banks to manage transactions quickly and effectively, decrease the need for manual intervention and costly interfaces between different systems and also quickly roll out new products to meet the changing needs of customers.

However, this change in approach won’t happen with a big bang. Banks will need to take a gradual journey towards becoming more agile over a number of years. Whilst the topic is firmly on the agenda now, this is likely to be part of banks’ ongoing conversations for some time to come...