In another great interview from Money20/20, we speak to Nadish Lad from Volante Technologies to find out more about payments modernization in the EMEA region.
Of course, the impact of Open Banking, ISO 20022 and more are mentioned but also of interest is the rapid adoption of cloud-based services in emerging markets like South Africa.
We get his thoughts on how banks can seamlessly transition to modern infrastructure and much more.
UK and EU at the forefront of payments modernisation
Lad, who is MD at Volante, begins the conversation by highlighting global trends such as the adoption of ISO 20022 and the shift to real-time payments, noting how these changes are positioning EMEA, particularly the UK and EU, at the forefront of global advancements. Indeed, according to this KPMG report, 84% of banks and building societies surveyed in the UK, already have a payments modernisation programme underway or have plans to launch one.
Key regional developments include the integration of open banking and APIs, which, combined with real-time payment mandates like SEPA Instant, are pushing the region towards a comprehensive modernization of payment systems.
Lad also offers some thoughts on another region within Europe where a lot of interesting things are happening. The Nordics, known for their innovative edge, have the P27 initiative which represents a pivotal development despite some setbacks. The region’s focus on inclusive, regional payment approaches rather than country-specific solutions sets it apart and is likely to drive future advancements as instant payments become more prevalent.
What is unquestionable is that the UK has been a leader in payment innovation, with its early adoption of faster payments. A crucial technological advancement here is the move towards cloud-based services, transforming payments infrastructure from a capital expenditure to an operational one. This shift, driven by cloud adoption, allows banks to pay for usage rather than invest in expensive, long-term technologies, thereby fostering greater flexibility and cost efficiency.
Cloud increasingly prominent in financial services
Lad also highlights the impact of cloud-based services in emerging markets like South Africa, where diverse stages of technology adoption exist. It’s something we’ve covered in a recent episode of the Paytech Show, where we spoke to BPC and TymeBank. In SA the consolidation of banking operations across the region and the centralization of regulations are key trends. The cloud is instrumental in enabling these shifts, supporting a central processing hub model which enhances efficiency and compliance across the region.
If you weren’t already convinced of its benefits, Lad points out the role of cloud technology in enhancing security and compliance. Cloud providers are increasingly investing heavily in securing financial services, ensuring 24/7 availability and compliance with regulations like GDPR. This level of security would be challenging for individual banks to achieve independently, making cloud technology a crucial enabler of modern, secure, and compliant payment systems.
The COVID-19 pandemic significantly accelerated the shift towards cloud-based payments, driving a move towards a cashless society and emphasizing the need for real-time, secure payments. This shift laid the groundwork for innovations such as confirmation of payee and enhanced fraud detection, highlighting the role of real-time payments in a post-pandemic world.
Modernisation Strategies for Banks Across All Regions
When it comes to practical advice, Lad advises banks to adopt a phased approach to payments modernization, avoiding large-scale, monolithic transformations. Instead, banks should implement small, functional blocks of technology, allowing for quicker ROI and manageable transitions. This approach is particularly effective given the diverse and often legacy technologies banks operate with.
Finally, Lad underscores the importance of choosing the right partners for payments modernization. Successful transition to cloud-based solutions requires detailed planning, clear communication, and a trusted partnership. Banks should seek partners who can provide those adaptable, incremental solutions rather than one-size-fits-all technologies, ensuring minimal disruption and maximum benefit during the modernization journey.
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