A New Model for Payments?

Hmmm..."Upgrading current payments systems is however not a cost effective option"...well something needs to happen.  Re-engineered systems and processes rather than upgrades are needed in my view.

SOA? Nope.  This is not a panacea for all ills. It's a means by which legacy back end systems can be utilised in a functional manner.  Get the services right and you'll be able to rip out the back end in the future if needed. That's the plus side.

Additionally, FI's need to reconsider where their payments systems are causing grief...and will cause more grief in the future.  Security comes to mind, both transaction and authentication. System/process efficiency & cost to maintain is a close second. Integrity?...well now there is an issue all sitting waiting to be disclosed along with stability (NAB & CBA both had serious back end issues impacting customer payments this year). Consumer/Merchant user acceptance? Risk management...both for the consumers, the merchants and the FI's? I don't see SOA being the answer to any of these important issues Bob.

Steve, I agree with you. SOA is a tool, not a panacea. As I said, whilst it might help, it is not an end in itself as some would have us believe. Also it is not the only way of moving the payments industry forward. I also agree that FIs need to look at their systems and identify where the real problems lie and address those first. My point is that hubs that are capable of multiple payment types are a good way of enabling this - and have been proven to be very cost effective.

I agree with the comments regarding SOA – in my experience this is a Nirvana rarely achieved – indeed in my experience the initiative to implement SOA failed to gain traction and was abandoned due to spiralling costs and severe scope-creep.  Whilst there are clear benefits to implementing SOA – unless you are working on a green-field site (or gradual migration through platform refreshment) the costs incurred are unlikely to justify the benefits at this time.

Modernisation of payment systems is a key requirement to ensure institutions remain competitive and cost efficient – whilst maintaining regulatory compliance.  However, it is only those institutes that have sufficient cash reserves that have the capital with which to invest.  The vast majority of the industry is still feeling the bite of “the crunch” and will have to adopt a make-do-and-mend strategy – maintaining their existing platform until they can justify a business case to invest in a refresh.  This is likely to stimulate demand for Managed Service Organisations to patch these systems until they are eventually replaced.