Nearly two-thirds of banks believe their payments infrastructure will need a significant upgrade in the next three years as an area once confined to the back-office domain becomes a key part of firms' digital strategy, according to a new report from Ovum.
Of 226 banking representatives quizzed by Ovum on behalf of Temenos, 65% expect their payment systems to need significant upgrade work or even replacement within the next three years. Among Asia Pacific banks this rises to 77%.
There are many reasons for this, including rapidly growing customer expectations, competitive pressures, domestic and regional level regulation, and payment infrastructure changes.
Ovum argues banks must build holistic, flexible investment cases that address a range of business priorities, while allowing them to pivot to any swift changes in their environment.
Customer impact is now key to a modern payments transformation investment case. Banks are recognizing the need to improve customer service, and the essential role that new payment services can play here - almost 90% of executives interviewed say that it is more challenging to win and retain new client business than it was a year ago.
Building real-time capabilities and adaptability for future innovation is becoming increasingly important. New architectures need to leverage APIs and micro-services to deliver a foundation for future product and service innovation.
Leigh Mahoney, head, wholesale digital, ANZ, says: "Delivering payments capability as a series of services will provide new channel opportunities and help power open banking and wholesale initiatives."