After years of resolving post financial crisis issues, banks now have the bandwidth and opportunity to address operational and technology challenges that have prevented them from delivering a superior customer experience, reducing their cost basis while sustaining growth within the new regulatory environment. The inefficiencies of fractured legacy payment systems, compounded by regulatory changes, evolving customer expectations and competitive pressures from traditional and disruptive new players has pushed payment transformation to the top of the agenda for many banks.</p> Regulators are now demanding that banks demonstrate not only end-to-end reporting on payments, but also an end-to-end resolute payment operation. The digitally native millennial generation has a different set of expectations from their financial services providers and banks need to address these, or risk losing them as customers. The power of mobile, social and cloud-based options is redefining the “payments experience” and creating new end-to-end business models.</p> However, banks will need to balance technology investments with operating model realignment to successfully navigate, the complex path to a successful payments transformation.</p> In order to pursue the payments transformation agenda, and successfully address the accompanying challenges, banks will need to combine an optimized target operating model, improved end-to-end money movement and technology architecture that will support their future requirements. However each bank will need to chart out their own optimal course of action based on their business model, customer expectations and strategic objectives. An end-to-end payments environment assessment which identifies key cost, revenue and efficiency metrics will identify and drive the priorities for a bank.</p> Ultimately, the goal for each bank is to understand the end-to-end customer requirements for each payment path, with a view to creating shared infrastructure and processes wherever possible, while preserving the appropriate customer-driven distinctions for specific channels, segments and offerings. When payment processing functions are similar, they can be handled as utilities, with rules to accommodate differences.</p> Technology solutions that include a payment services hub, business and process management solutions, integrated customer service tools, robust analytics and reporting capabilities are key to solving the end-to-end payment transformation puzzle. However, there are no silver bullets and banks need to identify the right set of solutions which best align to their strategic objectives while addressing the expectations of internal and external stakeholders.</p> </p> Article contributed by EY.</em></p>