I was recently asked by Volante Technologies to consider what being a digital bank means, specifically for a commercial bank and, even more specifically, the bank’s payments and treasury services.
After all most of the focus on digital banking and digital payments has been in the retail sector, where consumers are already accustomed to seamless 24x7 digital payments experiences and have many choices of ways to get those experiences, both from banks and fintechs. But corporate payments are a different world.
The request got me thinking, and I realised there are three major areas where corporate banks need to modernise in order to achieve their full digital potential, and generate truly outstanding corporate customer payments experiences.
First, moving payments to the cloud; second, fast-tracking real-time / instant payments adoption; and third, embracing open banking and APIs. All of that is too much for a single blog post, so here’s the first of three, focusing on the move to cloud and managed service models for payments
I’ve already covered the topic of cloud banking in general several times, and most recently with these two updates:
The core point being that digital banks need to be cloud-based. In retail, some are now 80 percent cloud-based. In corporate, it is far lower with many saying that ten to twenty percent cloud-based processing is doing well. Interestingly, the ones that are already higher than this level seem to have recognised the core reasons why corporate cloud-based payments processing makes sense:
- Cost-effectiveness: It will save money;
- Scalability: It will help them manage rising volumes much more effectively;
- Customer support: Through unlimited access and processing; and
- Global support: operating a full processing service 24*7
Those who are still on the fence seem to be there because of persistent myths, such as:
- It’s not secure enough
- I’ll lose the customer data
- It won’t pass compliance
- It’s not the same as outsourcing, as we will get the blame if it goes wrong
This blog post is continued over on Volante's website if you want more detail about the pros and cons of corporate cloud payments, and how the barriers are being removed.
Volante is offering a full three years of cloud-managed processing for any one real-time / instant payment type – U.S TCH RTP, EU TIPS, or EU RT1, as you like – completely for free. Learn more here.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...