The reshaping of the payments ecosystem over the last two decades can broadly be divided into two symbiotic movements driven by technology; the evolution of how people pay, and the transformation of the underlying payments infrastructure to support these advancements.

In order to compete with the younger disrupters running on newer, more responsive technologies, many FIs are having to adapt their business models to retain and strengthen their position, whether through mergers and acquisitions, partnerships or intensive research and development in the form of innovation labs.

The introduction of alternative payment methods (APMs) are causing a fundamental shift in the way that money moves; which has had a direct implication on the payments platforms that underpin a FI’s business – specifically for those designed and architected to serve an era driven by cards.

Continuous investment into updating the architectures of existing card-based platforms often born in the 90s if not before, has led to the creation of spaghetti-like systems with multiple points of failure and the inability to manoeuvre quickly to meet the disruptor challenge.

A new white paper from Compass Plus Technologies explores why FIs looking to modernise their business should step way from card-based platforms and instead consider investing into modern platforms built to respond to change, rather than basing their strategy on either refurbishing what they already have or replacing like-for-like but “newer.”

In Are you banking on a house of cards?, Compass Plus Technologies outline some of the key considerations for FIs looking to modernise from a card-based vs modern platform perspective.

• A FIs platform architecture should enable the efficient creation and launch of new payments products and services. Adopting a card-centric approach won’t work at a time when anyone can be a merchant, every device can be a payments acceptance point and most consumer identifiers can be a payment method, including phone numbers, bank account details and e-mail addresses.
• Payments platforms should embrace modern technological advancements and principles. A modern future-ready platform underpinning the core payments business is not only important for agile innovation, it also adheres to such principles as cloud deployment, DevOps, and API-first approach, ensuring quick, cost-efficient, streamlined integration, deployment and operations.
• Platforms should be designed with flexibility at their core in order to easily adapt and scale not only to meet a FIs changing requirements, but to meet those of the industry, fluidly adjusting to regulatory change, competitive challenges and new payment initiatives, including those not yet imagined.

The global payments matrix continues to develop driven by consumer behaviours, technological advancements, regulators, governments, and FIs themselves.

The fluidity of payments and how money moves will continue to evolve and how an FI adapts their transformation strategy now, will shape and define their place in the ecosystem for years to come.

With that in mind, should an FI be willing to bank their future on a house of cards?