Global online payments have seen robust growth during the pandemic due to the shift to digital commerce. The economic recovery in the B2C and B2B sectors should support the dynamics of payment services. Regulatory approvals for open banking systems and specialty payment services will also improve uptake of global payment services.
The strategic imperatives for the banking sector are: to create unified money movement capabilities, independent of channels and products; perform intelligent payment routing; improve the digital payment experience; and modernize technology and infrastructure.
Major issues in the payments industry include redundant solutions for money movements and payment options, as well as a lack of open APIs resulting in higher integration costs.
To resolve these issues, organizations should look for capabilities such as:
- Consolidation of payment processing across rails (Wires, ACH, RTP, Zelle)
- The ability to create enterprise APIs for internal and third-party integration
- The development of simplified payment capabilities, such as intelligent routing, the implementation of real-time payments
- The ability to fill gaps in transaction data ingestion
- Implementing data analytics use cases
Still, heavy capital investment is not an option for banks due to bottom line considerations. Here, the cloud offers a viable solution to disregard an operations-as-a-service model and achieve exceptional business results. Banks have started to engage payments-as-a-service players to take advantage of certain services offered on cloud-based platforms.
Cloud: a catalyst for payments
A public cloud provides a scalable and flexible infrastructure for innovation in payments. It amplifies speed and agility, while generating economies of scale. Open interoperability and microservices-based cloud native architecture create an advanced payments ecosystem. Additionally, cloud platforms allow banks and financial firms to initiate payments as a service without incurring capital expenditure. Application programming interfaces (APIs) integrate cloud platforms, payment products, and core banking systems with third-party services. API-based plug-and-play accessibility to ecosystem functionality facilitates the seamless consumption of services such as billing and settlement, cross-border payments, risk management and fraud detection.
Cloud-based payment services and APIs accelerate straight-through processing of corporate payments while fostering co-innovation in wholesale and retail payment products / services. They also require a strategic approach covering enterprise architecture, cost, regulatory and innovation considerations.
One functional area that has undergone many transformations is the area of ââdata analysis.
An enterprise data platform is a must have capability – especially a cloud data lake, combined with AI / ML capabilities – with the underlying payment data stored in a secure public cloud such as ‘Amazon Web Services (AWS).
AWS strengthens the payments ecosystem with a wide range of out-of-the-box security services and controls that are independently verified. Additionally, the AWS cloud infrastructure is enhanced with assurance programs such as PCI DSS Level 1, SOC 2, SOC 3, and several ISO 9001 and 27000 series standards.
From Infosys, we have implemented several business payment transformation programs for global customers, expertly guided by our Infosys Payments Council. These initiatives were reinforced by Infosys Cobalt, our cloud ecosystem of services, solutions and platforms, and a repository of cloud plans and assets. Our experience suggests that banks and financial institutions investing in the AWS Cloud across the payments value chain can improve success metrics and customer experience by leveraging the AWS suite of services for customer analysis. data, as well as predictive and data security capabilities.
Establish a data lake
Payment service providers need a robust system to manage and monetize the large volume of customer and transactional data stored on cloud platforms. The Amazon S3-based data lake solution provides unified problem solving for data needs.
Infosys set up a data lake for a global bank, migrating around 400TB of on-premises data to the AWS cloud. Our solution, implemented on the AWS cloud data lake with Amazon S3, resulted in 30% savings. Significantly, it facilitates the consumption of real-time data for monetization through targeted promotions and personalized offers, and several critical use case scenarios such as transaction risk management and fraud detection. The solution provided several self-service and exploration capabilities for business users, leading to improved customer intimacy and increased customer lifetime value.
Apply AI / ML models
The ability to predict customer behavior based on historical buying patterns or responses to relevant offers improves payment products while maximizing marketing ROI. Amazon SageMaker enables smooth deployment of AI / ML techniques in the existing payments landscape.
Infosys has deployed AI / ML models in a leading financial services company for troubleshooting and problem solving. Our solution allowed teams to test and validate ML models for development and staging environments before deployment to production. AWS services such as AWS Lambda and Step Functions for processing, training, and assessment data pipelines streamline the execution of ML models in Amazon SageMaker.
Ensuring data security
A single data breach can ruin a business; the highest level of protection of personally identifiable information (PII) is not negotiable in financial services. Amazon Macie, the data privacy and security service managed by AWS, provides a structured framework for discovering and protecting sensitive data, while detecting and preventing fraudulent payment transactions.
Our team adopted AWS Macie for a leading financial services company’s AWS Cloud Adoption Program using a standardized solution template. Our solution covered the discovery of sensitive data in S3 buckets, creating a long-term repository of discovery results. We have developed a custom data identification framework to identify customer-specific contextual text patterns. Macie’s alerts were related to auto-correction and escalation based on the severity of the alert. This structured security framework helped meet the company’s cloud security needs.
A suite of complementary AWS services, comprising more than 20 security-focused tools and more than 20 compliance and governance tools, provides banks, financial institutions and payment service providers with essential features to take advantage of the capabilities of exponential storage and on-demand processing from the AWS Cloud. The AWS portfolio, together with Infosys Cobalt and certified experts, drives revenue growth by offering payments as a service through various distribution channels and improves customer satisfaction with actionable insights based on analytics.
about the authors
Chandra Nandakumar, Associate Vice President and Senior Director of Delivery, CIS Cloud Practice, Infosys
Taiji Saotome, Senior Solutions Architect, Financial Services Sector Manager for the Infosys-AWS Alliance
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