Out with the old

After a number of years of steady activity, we are now seeing increasing numbers of financial institutions starting to migrate their legacy payment systems.

How can banks tell if they need to review their payment systems?

I have talked a lot recently about legacy payment systems, the problems they can cause within financial institutions and how to approach change, but I often get asked how companies can ascertain if they would benefit from evolving their payment systems.

What do payment systems of the future look like?

As financial institutions review their payments infrastructure, it is likely that many will decide that they need to start to consider how they evolve current systems in the future, if they haven’t started already. But where should they aim to get to?

Taking action against the burden of legacy systems

We know that most financial institutions are burdened, to a greater or lesser degree, by siloed legacy payment systems. Part of the problem is that the limitations of this architecture of legacy infrastructure are not immediately obvious. Individual systems function, and function well for the most part. But although they serve their individual purposes now, there is little to suggest they will be able to work together to support financial institutions as they adapt their business models to the demands of a new decade.

Stifled by legacy systems

Many financial institutions are trying to run their critical payments function on disparate, cobbled-together systems, whose complexity and inflexibility make it difficult to respond to new customer needs and market demands. This presents a number of challenges to banks.

The heritage of legacy payment systems

The past 30 years has seen billions of dollars spent on payments systems – with financial institutions building up a plethora of different systems and technologies designed to meet specific needs and develop competitive advantage. However, as the payments infrastructure gets more intricate and unwieldy, the harder it is for financial institutions to realize the potential benefits of technology.

Looking forward to IPS

As we prepare for the IPS event in London next week, I am looking forward to the presentations and conference sessions, of course, but I think I am looking forward to the one-to-one discussions on the stand even more. There is no doubt that this is an exciting time in the industry and there are still a lot of changes happening.