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Real-time payments are a gamechanger for driving differentiation and boosting revenue. But to build a successful implementation strategy, there’s a crucial step to take first: building an ironclad business case.

In a recent Orion survey, we asked participants about the biggest hurdles they face in payments modernization. A staggering 37% highlighted the challenge of integrating and ensuring compatibility with legacy systems.

But that’s not the only obstacle in this journey. There are four key aspects that companies should keep in mind as they navigate these challenges and lay the groundwork for modernization.

Build a Compelling Business Case
1. Scalable and extensible architecture

To successfully innovate and modernize in any field, investing in technology is an absolute must. This includes sunsetting old and outdated applications, integrating relevant data and systems, and setting up the right infrastructure. These steps are crucial for building a cloud-enabled, real-time payments platform that can scale and adapt as the business grows.

A scalable and extensible architecture enables easy integration and supports future growth. Embrace a microservices-based approach, which allows for the creation of loosely coupled, independently deployable services and speeds up development.

Platform flexibility also lays the foundation for meeting global payment messaging and regulatory standards such as ISO 20022 and Open Banking.

2. Access to data insights

A payments modernization roadmap would not be complete without a strong data strategy. This involves setting up an enterprise data warehouse and implementing enterprise data management controls.

It is also crucial to include master data management for various types of data such as client, reference, and product information. Separating these different data masters will speed up transaction processing and Straight-Through Processing (STP) rates. This ensures smoother and quicker services for customers.

To stay on track, it’s also a great idea to establish appropriate metrics like OKRs (Objectives and Key Results). They help build a strong business case and align the entire organization with its vision. When everyone is measured on driving improvements and better technology, success follows.

3. Process optimization and digitization

Simply having a strong platform isn’t enough to fully capitalize on real-time payments. It’s vital to digitize processes so companies can reduce manual work and focus on value generation areas.

Process optimization involves a significant overhaul, aimed at reengineering workflows to make them leaner, smarter, and data-focused. Businesses can achieve even better results by incorporating advanced capabilities such as Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and Natural Language Processing (NLP).

“Businesses are using AI and ML for document processing, virtual assistants, and creating rule-based engines. Instead of scrutinizing billions of transactions for fraud, they can use ML to identify only a few hundred for validation,” Everest expert Ronak Doshi said.

Additionally, optimized processes can address the issue of payments standardization, especially in areas where widely accepted industry standards are lacking. This helps ensure consistency and streamline operations across the board.

4. Optimized payment experiences

In today’s competitive business world, it’s essential to focus on customers and their needs when designing payment strategies. By understanding what customers prefer and expect, companies can  uncover unmet needs and develop fresh payment solutions. This person-driven design mindset encourages creativity and sets businesses apart from competitors.

To further improve the user experience and increase conversion rates, creating effective landing pages is crucial. These pages make it easier for customers to complete transactions seamlessly. Regularly incorporating user feedback ensures that exceptional experiences are consistently delivered.

Another valuable tool for enhancing the customer experience is journey maps. By analyzing current user journey, businesses can identify areas for improvement in the payment process. They can then plan and design an ideal experience for the future, optimizing every touchpoint and allowing the organization to evolve in a customer-centric way. These journey maps serve as blueprints for success and help organizations stay on track with their customer-focused approach.

Getting Started: Build or Buy?

When choosing the best approach to modernize payment strategies, organizations often debate whether to build a solution from scratch or use an existing tool. The choice depends on the specific use case and its strategic implications for your company and product.

If you aim to have a unique solution that differentiates your company, building a custom solution that matches your specific requirements is a good idea. This way, you can have a system that works exactly the way you want it to, setting you apart from the competition.

However, if there are existing solutions that offer the payments functionality you need, it’s worth considering them. Ensure to carefully evaluate their security, features, and technical aspects. Additionally, think about the long-term implications of your decision.

Time and effort are also important factors to keep in mind. If resources are limited or you require a quick solution, exploring ready-made products may be more efficient than starting from scratch.

Ultimately, the right choice depends on your specific needs and the capabilities of your organization. If you have the resources and believe you can create something innovative, building a custom solution is the way to go. However, if time is of the essence or you need to catch up in a competitive market, buying an off-the-shelf product or solution might be more suitable.

Embrace a Future of Modernized Payments

By addressing these critical factors—investing in a scalable and extensible architecture, effectively harnessing data insights, optimizing processes, and embracing human-centered design—organizations can pave the way for successful payments modernization. It is important to approach modernization as a comprehensive endeavor that integrates technology, compliance, organizational alignment, and a focus on user needs to drive positive change in the payments landscape.

For two decades, Orion has been helping Financial Services companies build scale, resilience, and agility in today’s rapidly changing landscape. Learn more about our expertise here.

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