| https://thefintechtimes.com/open-apis-are-the-secret-ingredient-to-modern-payment-systems-aci-worldwide-report-finds/ |
65 per cent of banks globally say Open APIs that enable access to a broad range of fintechs and consolidation of different payment types are the key drivers behind their plans to modernise payments systems, according to a new ACI Worldwide report.
The report ‘Defining and Building the Next Generation Payment Hub‘ was produced in collaboration with Edgar, Dunn and Company (EDC).
“Financial institutions are keener than ever to connect to the new opportunities provided by the widening catalogue of fintechs,” commented Mark Beresford, Director of EDC. “By having Open APIs, the connectivity between historic financial institutions and new players dramatically improves. And, in a world where both quantity and quality of alternative payment methods is rising exponentially, it is no surprise to see that banks are trying to simplify their approach to these offerings.”
Key findings of the report include:
- A third of financial institutions now generate over half of their income via payment processing, with 86 per cent of large banks generating more than 30 per cent of their revenues through this channel.
- 48 per cent said current legacy systems no longer meet business or customer needs and are not flexible enough to keep up with the pace of change coming from the modern payments world.
- Over half said they experience a siloed approach to support different payments processes and systems within their institution.
To meet the challenges of modernising their payments infrastructure – be it connecting to new vendors, consolidating different payment types, or processing large volumes of payments quickly and efficiently – an increasing number of banks are looking to invest in a modern payment hub. This offering combats each challenge in a cohesive and centralised way that is easy to manage for a financial institution.
- Over 90 per cent of financial institutions view payment hubs as pivotal in tackling unseen payments-related challenges.
- 40 per cent said their bank already has a payment hub solution.
- 45 per cent of financial institutions that do not currently have a payments hub today say they are likely to implement one in the next five years.
- 77 per cent said ‘faster and smoother adoption of new payment methods’ would be the key feature required from a payments hub solution.
“Overall, the outlook for the payment hub is very promising. With rising revenue dependencies on payments, the need for a solid payment infrastructure has never been greater,” commented Dean Wallace, head of consumer payments modernisation, ACI Worldwide. “Once seen as expensive and an ‘easier said than done’ enhancement, new technological efficiencies and the pressure on financial institutions to compete in a radically new environment have changed that view. Payment hubs are now viewed as a vital solution to relieve the pressure from many of today’s challenges and to prepare banks to successfully compete in the future.”
| https://thefintechtimes.com/open-apis-are-the-secret-ingredient-to-modern-payment-systems-aci-worldwide-report-finds/ |