Business Applications

Core payment systems are evolving to meet the demands of mobile, digital and even cryto payments. 

ISO 20022 has emerged as the preferred financial messaging standard for traditional payments.  SWIFT and the Eurosystem are expected to adopt the new standard in March 2023, while The Clearing House (TCH) has said its clearing and settlement system CHIPS will implement the ISO 20022 message format by November 2023. The UK is upgrading its instant payment system to incorporate a ISO 20022-compliant architecture. Known as the New Payment Architecture (NPA), the initial plan is to upgrade the existing Faster Payments real-time rails. 

To modernise their applications, payments providers are seeking to re-platform applications, introduce SaaS applications, or to create an API environment to surround legacy applications to allow modern digital platforms to be introduced.

Containerisation of legacy applications will be a necessary step in the large-scale migration of workloads to public cloud and allow workloads to shift across a hybrid multi-cloud architecture.

Compute & Cloud

By their very nature digital platforms leverage hyperscale infrastructure from cloud providers in computing, data storage and security to deliver scale, reliability and customer experience.

There will be a major shift toward cloud as the primary venue for workloads over the few  years, with public cloud IaaS and PaaS serving as the primary environment of workloads.

Multi-cloud architectures are seen as key to delivering agility, cost and performance while addressing security and compliance challenges. Eventually, container-driven application portability in a hybrid or multi-cloud IT architecture will enable the multi-directional movement of workloads to best execution venues on an ongoing basis for optimisation of cost and application performance. Unsurprisingly, 81% believe a multi-cloud strategy will become a regulatory prerequisite after several years of regulatory focus on cloud technologies in the UK and the US [1]. 

Digital Workplace

Organisations must now provide a digitally enabled, flexible and collaborative working experience to attract and retain staff. They must also move beyond the fast reactions required to achieve a lockdown, where over 70% worked from home [1], and deliver an ongoing hyrbid working environment.

A modern collaborative digital workplace is critical to a remotely located workforce. It ranges from access to HR applications and core business applications to e-mail, instant messaging and enterprise social media tools and virtual meeting tools. 

Security, Compliance & Data Privacy

Security especially with data breaches is high priority issue. Consumers and businesses will expect payment providers to operate at a very high level of security and privacy. This includes identity management, data security, privacy management and cybersecurity.

In 2021, 63% of financial institutions experienced an increase in destructive attacks, an increase of 17% from the previous year [1]. In 2022, Akamai Security Research observed a colossal 3.5x growth in web application and API attacks against financial services. In 2022, DDoS targets increased by 22% in the financial services industry [2].

Whilst banks need to secure their own organisation, more than 80% of Financial Services attackers target customer accounts rather than the organizations themselves [3]. Fraud is a major concern and has led to the introduction of Strong Customer Authentication (SCA). During the pandemic banks have seen a 35% increase in fraud attempts through digital channels [4].  Identity theft is the second most-common type of fraud in Europe, and 56% of Europeans have experienced at least one type of fraud in the last two years. The statistics show 25% of Europeans exposed to any fraud suffered financial damage, causing a total loss of around €24 billion in two years [5]. Whilst 83% of consumers trust their banks’ security measures, half believe their financial institutions should provide additional protection [6].

A key element is the security of the digital mobile wallet. In the customer’s eyes the payment providers responsibility now goes out as far as the consumer device (and perhaps even extends to a responsibility to educate and/or provision the consumer). They already exploiting mobile device security capabilities (e.g. facial or finger recognition) to simplify the experience. Payments providers can ill afford to add loss of trust with customers to the economic and competitive headwinds.