Two-thirds of banks stated that their payments infrastructure will need a significant upgrade in the next three years.
According to a new report produced by Ovum, ‘Making the Business Case for Payments – Lessons from the field’, almost three-quarters of APAC banks fully expect to replace or renew their payments systems in the same time-frame.
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Moreover, the report highlights that banks that delay the required infrastructure investment risk falling behind the rest of the market.
Shrey Rastogi, Payments Strategist at Temenos, said: “This report echoes what we are hearing from our Payment Hub and Instant Payment clients; the customer is king. Digital is the new norm, and capabilities such as open APIs and instant payments – in under 5 seconds – are no longer differentiators, they are now expected.
“A truly real-time payments hub, beyond just real-time processing, means that banks can support this customer requirement now. Furthermore, the payments market will evolve further, and banks need an infrastructure to adapt accordingly.
“To support banks, Temenos has developed an ROI model for payment transformation. The model provides a holistic framework to capture and quantify all the benefits arising from transforming their payment landscape while factoring in software, implementation and maintenance costs.”
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By GlobalDataReport highlights
- Banks must build flexible investment cases that address a range of business priorities. Furthermore, this will allow them to pivot to any swift changes in their environment.
- Customer impact is now key to a modern payments transformation investment case. Banks are recognising the need to improve customer service, and the essential role that new payment services can play here. In addition, almost 90% of bank executives interviewed say that it is more challenging to win and retain new client business than it was a year ago.
- Building real-time capabilities and adaptability for future innovation is becoming increasingly important. Moreover, new architectures need to leverage APIs and micro-services to deliver a foundation for future product and service innovation.
Temenos ROI Model for payment transformation
The Temenos ROI Model uses the discounted cash flow (DCF) technique to calculate financial impact over the chosen time-period across three mutually exclusive benefit dimensions, namely:
- Payment system modernisation benefits
- Operating model benefits and revenue uplifts
- Customer experience and service improvements
Overall, the Temenos ROI Model seeks to overcome the challenges highlighted in the report. It aims to increase speed of decision making at banks. It will provide them with a flexible approach to build their payment transformation business cases. Furthermore it will meet bank’s specific requirements for development.
