It’s time to accelerate your payments modernization program
We’ve seen remarkable disruption—in all areas of life—due to COVID-19. The payments industry is no different. The pandemic has accelerated our movement away from cash toward digital payments, and the payments modernization trend shows no signs of slowing down. Accenture forecasts nearly 2.7 trillion transactions worth US$48 trillion will shift from cash to cards and digital payments in the next decade.
This is an important opportunity to innovate.
To understand whether banks are ready to take advantage of this opportunity, Accenture surveyed executives about their payments modernization programs. Even though most acknowledged the importance of investing in payments modernization, only a handful have unlocked material business value from their programs.
Meeting the payments investment challenge
Accenture identified two key opportunities for incumbent banks to capture returns from their payments modernization investments.
- Disruption vs. Compliance – rather than simply reacting to regulatory change, banks can be looking to actively drive disruption. This involves a total redesign of payments architectures rather than reactively implementing point solutions.
- Coordination vs. Fragmentation – governance and operating models can often be fragmented and uncoordinated, resulting in banks making piecemeal payments investments. Instead, look to resolve needless complexity and inefficiencies in your payments architecture.
Transforming payments for value and growth
With increasing pressure from incumbent and emerging competitors in the payments arena, banks understand that it’s time to step up their transformation. Customers were already migrating to digital, and the pandemic has only accelerated this trend. There is significant value to be unlocked by banks that take a holistic, coordinated and strategic approach to modernizing their entire payments architecture. We've identified four important steps in this journey:
Positioning for the long-term win
Banks that take a step back to look at the big picture, and then focus on business-led payments transformation instead of urgent regulatory mandates, will be best positioned to drive long-term value.
As you develop your business-led payments transformation strategy, there are a few questions that are worth considering:
- Do you have a medium- to long-term plan to invest, divest, and pursue emerging payments opportunities?
- Are you taking an agile approach to your program, one that lets you test, learn and scale quickly?
- Is your payments business strategy aligned with your overall business transformation agenda?
- How are you balancing changing regulation with customer needs?
- Taking a customer-centric approach, what is your vision for your payments transformation? What will differentiate you, and how can that be monetized?
We would love to hear your questions and feedback on our report, “Playing the long game in payments modernization”. If you would like to talk through any of the issues raised above, please get in touch; one of our payments experts will contact you to set up a call.