The finance industry moves fast, and staying ahead of the curve is imperative.

As market dynamics continue to reshape traditional payment systems, financial institutions are focusing on payments modernisation.

This article explores some of the insights that emerge from the “Payments Modernisation: The Big Survey,” conducted by Volante and Finextra. This survey serves as a compass, guiding industry players through the shifting landscape while shedding light on key drivers, emerging trends, and the path forward in payments modernization.

State of the Industry

In the wake of the COVID-19 pandemic, the financial services industry is experiencing a seismic shift. As the world embraces digitization, several key drivers are reshaping the landscape. Our report delves into the specifics, highlighting the impact of real-time payments, cross-border transactions, new mandates, and regulations.

As digitization continues to shape the lives of an expanding population, electronic payments have become a pivotal force. With each passing day, cashless transactions are becoming the norm. In light of this, 72% of banks are increasing their budgets for payments modernisation.

The industry recognizes its crucial role in fostering financial inclusion, making it a top priority. By embracing digital payment solutions, financial institutions aim to empower individuals and businesses, ensuring that no one is left behind in the rapidly evolving financial ecosystem.

Moreover, electronic payments are enabling the development of digital economies. By providing the infrastructure for seamless and secure transactions, payments are fueling innovation and propelling economic growth. They serve as the stable backbone that underpins the functioning of our economies, enabling the exchange of value and commerce in our global economy.

In this new era, the industry is focused on the efficiency, security, and accessibility of electronic payments. Technological advancements and regulatory frameworks work in harmony to create an environment that helps meet those needs.

Our Methodology

Drawing upon the previous years’ research, “Payments Modernisation: The Big Survey” explores ongoing priorities within payments modernisation. It focuses on the growth of partnerships, cloud-based solutions, and account-to-account payment applications across corporate, SME, and retail sectors.

With a global scope, the 2023 survey received a robust response of 300 participants, representing a diverse mix of C-level executives, senior management, directors, and VPs.

Key Findings

The Rise of Cloud-Based Payments Infrastructure

In the world of payments modernization, one statistic stands out: 90% of respondents embraced or planned to leverage cloud-based payments infrastructure. This shift signifies a departure from traditional models, as financial institutions seek scalable, cost-effective alternatives that can adapt to the evolving demands of the industry.

The Imminent Dawn of New Payment Solutions

The survey paints a picture of anticipation, as 67% of respondents plan to implement new payment solutions within the next year. The urgency is clear, with 41% aiming for implementation within the next six months and an additional 26% within the subsequent year. The industry recognizes the need to embrace change and adapt to the dynamic future landscape.

The Winds of Change Sweep Across North America

Change is happening across North America, where 60% of respondents indicate a significant shift toward hybrid cloud models. Recent outages have served as a clarion call, renewing a commitment to fortifying payment systems with enhanced resiliency and reliability.

Payments-as-a-Service Forges New Pathways

A shift sees financial institutions increasingly rely on strategic partners, with 40% of respondents embracing vendor-provided Payments-as-a-Service (PaaS) offerings. This fourfold increase from the previous year shows a fundamental change in the industry’s approach. Amid economic conditions and innovative developments, partnerships become essential catalysts for accelerating payment modernisation plans.

Unveiling the Customers’ Pain Points

The survey unearths the customers’ pain points, revealing two dominant concerns:

• The foremost pain point, cited by 79% of respondents, revolves around access to real-time or intraday liquidity management.
• Following closely, at 75%, is the perennial issue of cost.

In Europe, the urgency of these pain points is further amplified, with 82% of respondents expressing their concerns about real-time liquidity management.

Driving Forces Behind Investment in Payments Modernisation

Banks are influenced by several driving forces when it comes to investment in payments modernisation. Reducing costs takes the lead, with 79% of respondents prioritizing this objective. The quest to meet customer demands for value-added services and limit system risks also feature prominently. These driving forces underscore the industry’s dedication to enhancing efficiency, security, and customer satisfaction.

A Focus on Streamlined Cross-Border Payments

Efficiency in cross-border payments emerges as a priority, as 37% of customers highlight its significance, up from 28% in the previous year. The interconnectedness of the global economy demands streamlined processes and cost-effective solutions, pushing financial institutions to forge new paths in this domain.

Watch This Space

The “Payments Modernisation: The Big Survey” reveals a future filled with opportunities and challenges.

As the industry embraces change, the forthcoming white paper promises to provide even deeper insights, empowering financial institutions to carve a path toward a secure, efficient, and customer-centric payment ecosystem. This collective endeavor will shape a future where innovation, exceptional payment experiences, and successful organizations converge.