How to approach modernising your legacy payments ecosystem

For decades now, vendors and analysts have been heralding the death of legacy payments ecosystems, but still, they remain in use.

Modernising your legacy payments ecosystem

Over the past 20 years, FIs have been threatened with obsolescence and plummeting market share for failing to embrace the power and flexibility of modern technology platforms with their many demonstrable benefits.

Evolving is a necessity and yet, somehow, inertia rules.

The industry continues to spend ever-increasing effort and money on countless tweaks to prolong the lives of their aging platforms, rather than deploying their resources to address the fundamental problem.

Such are the issues laid out in a new white paper from Compass Plus and Consult Hyperion that sets out guide readers through the modernisation process.

Some may imagine modern payment architectures as cloud-based systems, inherently customisable and API-first, endlessly scaling and adapting to meet customer needs as volumes grow and requirements change.

The reality is very different.

In practice, the payments industry has become one of quick fixes, patches, plug-ins and a huge assortment of integrators, with FIs partnering to deliver functionality that legacy systems cannot support.

These external hubs of multiple stakeholders, and reliance on ‘payment orchestration layers’ are prolonging the shelf-life of antiquated, not-fit-for-purpose systems by making them more complex.

In order to remain competitive, banks, FIs and dedicated payment processors, tend to focus on the front-end, with little thought for the powerhouse back-end systems required to drive it all.

When not properly managed and controlled, an organisation can end up with a tangled web, where critical business functionality is offloaded to partners who quickly become essential to servicing customers.

This results in a solution architecture that is no longer a platform but a complex processing ecosystem with many parts.

While orchestration can be a valuable tool, without a sound strategy there is a real risk of lock-in to this single supplier that holds all the power to make or break your payments ecosystem.

Equally, micro-services have been hailed as a modern quick fix to an aging architecture, but this approach must also be part of a carefully engineered wider strategy, rather than simply a means to an end.

Another popular remedy is engagement into multiple micro-partnerships to provide solutions. However, these types of partners should not supply core, mission-critical ecosystem components.

Organisations must face up to these challenges, knowing that their core platform is just as essential to their long-term success as their front-end system.

This is the only reliable way to ensure that their technical capabilities meet the demands of their products, services and most importantly, their customers.

To download Escaping the legacy mindset: How to approach modernising your payments ecosystem CLICK HERE


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