Experts from the cards and payments sector discuss with Douglas Blakey and Evie Rusman the prospects and key priorities for the sector in 2021

Shift to cloud tech 

One of the biggest shifts we saw in 2020 was around greater adoption of cloud technologies to drive forward scalability, resilience and cost effectiveness of payments platforms. Shrey Rastogi, Senior Payments Strategist at Temenos, writes

Cloud adoption also helps to increase business agility and speed of innovation, required to keep pace with market changes happening in payments.

Banks have woken up to the reality that they must shift their payments to the cloud. Why? Because customers are now hooked on personalised, real-time digital payment experiences, which require banks to reimagine the whole payment value chain for themselves and their customers.

It is no surprise that the pandemic has significantly accelerated the move to cloud payments. In these times of uncertainty, payments are more than just the movement of funds. They are about people feeling secure in their day-to-day lives. We are seeing a sharp rise in electronic or digital payments, driven by e-commerce, because of the lockdown situations worldwide.

There is also a lot of innovation happening in banks at the product and services level as customers demand more flexibility to better manage their payments flows and queries during this crisis. We see that with payment holidays, new types of loans or ‘buy now, pay later’ propositions and more self-service options made available in their mobile apps.

The regulatory pace of change in the payments industry is also forcing banks to modernise. Changes such as ISO 20022 migrations will require banks to process and share more rich data with other participants in the payments value chain. This can enable new products and partnerships, but it also challenges the bank’s technological capabilities. And finally, the payment business model itself is changing.

Volumes are rising sharply, getting more volatile too with events like Black Friday and Cyber Mondays, but margins continue to decline due to increased competition from neo-banks, fintechs and big techs. Banks must embrace cloud technology to compete.