Government-led financial inclusion initiatives coupled with local digital transformation roadmaps have been instrumental in creating momentum towards the path to digital payments.  Banks are striving to build this path to meet customer demand for customer-centric digital services and are often driven by a competitive or collaborative approach to innovation alongside fintech.

The rise of digital-first innovation

COVID-19 pandemic accelerated digital payments around the world, represented by a dramatic increase in e-commerce and contactless payment options. Banks have responded during this challenging period by directing their attention to serving digital-driven services and payment options. However, for many banks still navigating their way through their own digital transformation journey, this innovation can come with added complexity as they push to offer modern services from fragmented or legacy platforms and scale up in their current hardware infrastructure.

This was top of mind in the recent Quadrant Knowledge Solutions SPARK™ Matrix for card management systems (CMS) which recognised that the Asia Pacific (APAC) region, driven by the continued popularity of card products, is expected to gain significant market traction in its adoption of digital card management systems with modern technology architecture and well documented open application programming interfaces (APIs) along with access to advanced product configuration tools.

Today there is an estimated trillion-dollar market opportunity for API-driven products and services. Open APIs are key to accelerating financial services development in open banking, digital banking, digital payments and dynamic frictionless customer experiences, among other areas. In order to achieve continuous innovation, financial institutions (FIs), including traditional and challenger neobanks, should look to an API-driven payment solutions platform. This would enable their digital-first strategies by supporting easy integration and communication with new and evolving payment tools and channels. APIs can also accommodate fast and secure sharing of big data to fuel new hyper personalised customer services. They can help banks to monetise marketplace collaborations with other fintechs as part of a growing payment ecosystem and portfolio of innovative customer-centric services enriched by API-driven insights.

The role of modern payment solutions and cloud-based services

The benefits of APIs and microservices grow exponentially when combined with the cloud to form an ‘as-a-service’ driven payment processing solution to address key pain points faced by FIs. These flexible business models include infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). The cost-to-income for scaling, expanding with innovative API-driven products and services and extending into new markets, is automatically reduced. In simple terms, payment processing and value-added services using cloud-native technologies allow FIs to optimise the full operational efficiencies of cloud auto-scaling, de-risk expansion strategies and support fast-to-market launches through a cloud-based sandbox and proof of concepts.

At TSYS, we provide flexible deployment models with our own payments solution platform for issuers and acquirers in Asia. Our ‘as a service’ business models running on Amazon Web Services (AWS) are positioned to accelerate speed to market and streamline even faster innovation. Faced with increasing compliance complexity and shortening time frames, infrastructure as code (IaC) methodologies coupled with a continuous integration and continuous development (CI/CD) approach ensure that compliance can be easily navigated with updates automatically applied. This continuous transformation approach applies to automated seamless updates of the entire payments solution surrounding infrastructure and underpins our clients’ continued future payment journeys while relieving them of the burden and added cost of evolving compliance and infrastructure maintenance.

Our large-scale enterprise collaboration with AWS is strategic for both global brands as we’ve come together to deliver and prioritise the future of payments for our clients. TSYS’ regional expertise combined with AWS’ infrastructure in Asia, totalling nine regions and with Indonesia soon to join, creates a compelling cloud-based proposition that draws on TSYS and AWS’ stringent cloud-risk-control policies. Both TSYS and AWS are proven, trusted advisors that support local and regulatory frameworks and are closely aligned with security and resiliency being top priorities.

While pandemic-related pressures may squeeze FIs, Asian nations are well positioned to recover from the economic impact and appeared at the top of GlobalData’s COVID-19 economic recovery scorecard. However, innovation remains paramount to FIs in order to maintain existing customer portfolios and bring new revenue streams through payment services. FIs need to keep ahead of the innovation curve, maintain and strengthen their customer relationships and differentiate on points of ‘customer-centric’ service to gain more market share. Digital is where it’s at for payments — as a point of disruption or collaboration.

With API and microservice technology solutions in cloud environments, you have the rails to integrate and orchestrate new services based on unlimited data endpoints and re-purposed microservices as well as embed AI and machine learning to accelerate and enhance decisioning on fraud, application boarding and many other areas. This is fundamental to give FIs an advantage to deliver secure customer-centric experiences with hyper personalised new services through market-place collaboration with fintech, big tech, retailers or lifestyle improvement contributors. Add cloud-native containerisation, CI/CD methodologies and partner payment solutions providers and trusted processors like TSYS are in a position to automatically push their new development roadmap seamlessly to FIs for continuous innovation and business acceleration.

Just as digital adoption has accelerated amid the pandemic, so has the validation of cloud-based solutions to future proof the continuous transformation of digital engagement and frictionless customer journeys. According to Gartner, the proportion of IT spending that is shifting to cloud will accelerate in the aftermath of the COVID-19 crisis, with cloud projected to make up 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020. This shift combined with the rise of ‘as a service’ business models will create new advantages for FIs leveraging ‘pay as you grow’ payment services from their processing partner’s cloud-based community. We’re talking about a space fostering continued growth and the tools for FIs to master continuous innovation.

 Malek Mroueh is vice president and regional head of Asia, Middle East and Africa at TSYS, a Global Payments company with nearly 24,000 employees and reach spanning over 100 countries throughout North America, Europe, Asia Pacific, and Latin America. The content of this sponsored article belongs to the writer and his organisation and does not necessarily reflect the opinion of the publisher.