Payments: clients to the left of me, regulators to the right

It’s been a challenging few years, and banks especially are still under a lot of pressure. Regulators are demanding far more complex, granular and frequent reporting, while customers are asking for better services – so what’s the answer? One thing I’m seeing is increasing numbers of banks looking at how their payments systems can be used to satisfy both parties.

Firstly; the regulators. In order to keep them happy, banks need to showcase their liquidity in ever more complex breakdowns and at shorter notice. But with so many siloed payments systems, institutions are struggling to create this information. Banks should consider consolidating these processes into a single payments hub, allowing regulators and internal stakeholders a true birds-eye view. They can also look at developing a central data warehouse, connected to all systems across the organisation.

And now; customers. The most immediate way for banks to respond to customer demands in the payments space is in opening up new channels. There are plenty of successful examples of this – such as PayPal and Google. Banks have seen these and are looking at new ways of communicating with clients themselves.

With plenty of devices and channels out there, how should banks proceed?  I believe that institutions should think of their platforms the way that retailers think of their shop fronts. While the shop front is often updated, the goods in the shop itself rarely change, much as the products at a bank fundamentally stay the same. Banks should build new channels quickly and cheaply, but with a short shelf life – reflecting the ever-changing nature of new communications channels.

By doing this, banks can also quickly and cheaply create platforms for a wider range of devices – BlackBerry, iPhone, Android, Windows and so on. Some of these will thrive and some will fall by the wayside, and investment can then be flexibly shifted accordingly.

Ultimately, banks that want to stay ahead of the game need to make sure their payments processes are up to scratch. It’s all very well to talk of agile development into new platforms and utilising social media, but unless solid infrastructure sits behind it all, there’s not a lot that institutions can do.