Payments is one of the fastest moving and most demanding spaces in the financial services industry. Consumers are placing greater expectations on their providers and have more choice than ever before, meaning all firms face a risk of losing business if they underperform.
Use of cloud technology could prove to be a key success factor in this environment, largely because of the flexibility it provides.
Financial institutions committed to deploying applications in the cloud can scale up or down as they see fit, responding to fluctuations in demand or trends in the market. It’s an agility and cost efficiency that can't be achieved with legacy payment systems.
Cloud solutions also reduce the need for businesses to run their own data centers, conduct regular hardware and software maintenance, and invest in IT updates.
An increasing number of private firms are recognizing the potential of cloud for payments, as are industry organizations such as SWIFT, which provides global financial messaging services.
SWIFT has deployed a cloud-based tracker as a key element of its global payments initiative, enabling real-time monitoring of cross-border transactions from initiation to confirmation.
Speaking at a recent Sibos conference, Luc Meurant, head of SWIFT's financial crime compliance division, said, "SWIFT pioneered the use of highly secure cloud technology to deliver hosted compliance solutions. Technology is a great enabler of the collaborative, information-sharing, cost-efficient, utility-based approaches that banks are increasingly favoring as their compliance strategies mature."
As the payments business looks forward, there is little doubt cloud will be a vital element of the industry's future. Gartner predicts a corporate 'no-cloud' policy will soon be as rare as a 'no-internet' policy would be today.
Financial institutions must prepare for this future by adopting payment solutions that are not only compatible with cloud, but designed to leverage this technology to realize maximum benefit for the business and its customers.