There is also the general realisation that standing still is not an option for banks that see payments as strategic to their business. There is a relatively small number of examples of banks that have kicked on and have made significant improvements to their payment propositions in the last few years and, in some ways, this more than anything else is likely to spur the laggards. At an event such as Swift’s Sibos, where the large and mid-tier banks set out their payment stalls, it is always interesting to see where the crowds head. There are also the country-level initiatives. UK Faster
Payments was truly innovative and has brought significantly improved service
for UK consumers. One possibility in
terms of individual banks migration is to ‘wrap’ the current infrastructure and then gradually move over time. This has become a fairly common track, putting more flexible, intelligent routing layers in front of the old engines. Those layers tend to be able to understand the context and content of the messages and allow users to adapt the rules that govern them on the fly, in contrast to the more basic reformatting middleware of the past. The layers can ease the integration and, over time, functionality can be gradually migrated into the new layers. Often this approach is given a Service Oriented Architecture (SOA) tag, with functionality in the back-end systems exposed as web services.
Those banks that have made strides have under standably sought to centralise and standardise on systems. This might be per country or, on occasions, on an international basis. Usually there has been a decision to keep the traditional retail and wholesale divide but perhaps to use common components for common tasks, such as reconciliation. A bank such as Société Générale took a first step by physically moving a number of its European payment systems to a single data centre and has sought to gradually replace them since then, subsequently turning to Asia as well.
Among the benefits of the new target architectures is the ability to concentrate investment, so that the new hubs become the focus for investing in technology and expertise. They become centres of excellence, perhaps providing services back to the bank based on service level agreements, and potentially doing so for other institutions as well. Deutsche Bank’s proposition for SDDs is along these lines.
The supplier community
At the heart of the payments systems market are a number of long-term specialists, with central retail and/or wholesale payments processing platforms. These have tended to add complementary applications around their core offerings, through acquisition (there has been a lot of consolidation) or development. This means they have built up a considerable
16
breadth and depth of solutions.
A prime example is ACI, which has been in the payments systems market for 35 years. Here, as elsewhere, the consolidation means the supplier has built up myriad applications, with different strengths, weaknesses, technology and design. There is overlap and a lack of integration so, just as banks are seeking to standardise and centralise, so suppliers such as this are tending to define which systems are strategic, which are not, and then provide the necessary integration. It means some users bases, while still supported, will not see new investment in their systems and will come under increasing pressure from their suppliers to move. Often, this is the moment that banks choose to look at the market as a whole and embark on a selection.
The established suppliers mostly have new systems that have been acquired or are rewrites of old ones, so they remain a source of competitive applications (although there are a few examples of suppliers that have not done so, with their revenue shifting to maintenance rather than new licences). The addition of complementary applications around the core engines means most suppliers can cover a broad set of payment requirements and there are some clear examples of where this has worked well, with suppliers coming up with an attractive set of integrated solutions, within a single contract, making life easier than for those taking a ‘best of breed’ approach and sourcing from multiple vendors (the fact that support of that environment resides with a single vendor is a key attraction).
A number of upstart suppliers have emerged in the last few years with payment engines of their own. Belgium- based Clear2Pay (now part of FIS), UK-based Dovetail, Russia-based BPC and Australia-based Distra (acquired by ACI in 2012) are examples. For all the consolidation, there are specialist suppliers with best of breed applications for particular parts of the payments jigsaw. There are, for instance, long established suppliers of reconciliation and matching systems, message repair tools, fraud detection systems, or the initiation applications. In an area such as direct debits, there are national specialists, as well as Sentenial, with its focus on SDDs. Broader system suppliers, including the core banking system players, with payment modules within their product suites are also relevant and will probably see specialist payment players as competitors. A few of the core system suppliers have positioned their payment modules as solutions in their own right, with mixed results. Oracle FSS is one of these, while Temenos is working on a payments development with ABN Amro, which commenced in 2012. The target market for suppliers is not limited to the banks. The clearing houses themselves and other third-parties in the payment chains are targets and typically use the same types
Payment Systems & Suppliers Report |
www.ibsintelligence.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200 |
Page 201 |
Page 202 |
Page 203 |
Page 204 |
Page 205 |
Page 206 |
Page 207 |
Page 208 |
Page 209 |
Page 210 |
Page 211 |
Page 212 |
Page 213 |
Page 214 |
Page 215 |
Page 216 |
Page 217 |
Page 218 |
Page 219 |
Page 220 |
Page 221 |
Page 222 |
Page 223 |
Page 224 |
Page 225 |
Page 226 |
Page 227 |
Page 228 |
Page 229 |
Page 230 |
Page 231 |
Page 232 |
Page 233 |
Page 234 |
Page 235 |
Page 236 |
Page 237 |
Page 238 |
Page 239 |
Page 240 |
Page 241 |
Page 242 |
Page 243 |
Page 244 |
Page 245 |
Page 246 |
Page 247 |
Page 248 |
Page 249 |
Page 250 |
Page 251 |
Page 252 |
Page 253 |
Page 254 |
Page 255 |
Page 256 |
Page 257 |
Page 258 |
Page 259 |
Page 260 |
Page 261 |
Page 262 |
Page 263 |
Page 264 |
Page 265 |
Page 266 |
Page 267 |
Page 268 |
Page 269 |
Page 270 |
Page 271 |
Page 272 |
Page 273 |
Page 274 |
Page 275 |
Page 276 |
Page 277 |
Page 278 |
Page 279 |
Page 280 |
Page 281 |
Page 282 |
Page 283 |
Page 284 |
Page 285 |
Page 286 |
Page 287 |
Page 288 |
Page 289 |
Page 290 |
Page 291 |
Page 292 |
Page 293
