A new report from researchers, the Aite Group, identifies the issues faced by banks and credit unions implementing wholesale payments processing strategies in global economies of varying sizes. The report discusses how these financial institutions and their technology vendors plan to address these issues, and identifies additional opportunities for vendors in a US$2.5bn market that is evolving toward vendor solutions.
For banks and credit unions, payments processing has moved from a purely operational offering to a strategic opportunity, as well as a growing concern. The payments franchise is a capability that financial institutions seeking to deepen client relationships and expand product and service offerings want to leverage. These institutions face issues, however, which differ depending on the type of economy in which they reside. Developing and emerging economies, for example, are focused on creating payments clearing and settlement components, but lack the technology infrastructures enjoyed by advanced economies. Advanced economies, on the other hand, may find their technology infrastructures antiquated or expensive to maintain.
“Market forces and regulatory compliance are contributing to massive changes in payments markets in many parts of the world,” said Nancy Atkinson, senior analyst with Aite Group and author of the report. “Financial institutions can deal with these challenges by deploying technology to reduce their cost structure and allow for quick and easy introduction of new services.”
The report is the first of two addressing the wholesale payments market; the second report will profile vendors that help financial institutions with payments processing issues.
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