When a bank, payment service provider or FinTech assesses their technological requirements, it is safe to assume that these will be completely different. We make an educated assumption that what is right for one, isn’t right for the others. When we segment businesses like this, we are essentially taking a step back and viewing the transformation of payments companies from generation to generation. We have watched the landscape evolve from being bank-led to being customer-driven, however, we ultimately forget one critical factor: it can only ever evolve as far as the latest technological advances allow, regardless of vision.
Arguably, the technological restraints of today are far less binding than those of yesteryear, yet many businesses do still run on technology that is well into the age range for a human mid-life crisis.
To deal with evolution, whether to build, buy or transform your systems is a crucial topic. It is fair to say that in the payments space, every decision has a price: always monetary, sometimes business critical, resource-dependant and certainly weighted by the amount of vendor dependence.
A well-established brick and mortar bank may have the resources, but not the inclination to uproot their entire payments platform to begin the very expensive and arduous task of starting anew, with fresh risks and uncertainties – the CTO might just like to get to their retirement as smoothly as possible and let the next in line clean up after them. Better the devil you know, than the devil you don’t after all. This could absolutely be the correct approach, once all options have been weighed and measured, resources analysed, all areas of the business fully investigated, and all options costed up and explored.
A start-up FinTech may not have the resources to run a fully-fledged, all-singing, all-dancing payments platform, nor the money to buy one. Build might be the only option to maintain their differentiation and competitive edge, regardless of time, effort and hard lessons learnt along the way.
There is no right answer, especially for those who sit in the middle, with all levels of differing requirements and priorities. What is more important, to differentiate or to offer standard products and services well, to establish trust or to disrupt? This is certainly dependant on the values, strategies and vision of each individual business.
However, there is something everyone wants. To have the luxury of flexibility and adaptability. Now, used in this context, the immediate reaction is, “ah ha! Here we go again, down with legacy systems and silos, bring forth the cloud and APIs.” However, it isn’t just technology that needs to feature these two characteristics – although it certainly doesn’t hurt. Flexibility transcends technology into all areas of a successful payments business, from strategy and resource management, to business continuity planning and risk.
To truly enjoy flexibility, you need a solid partnership with vendors and third party suppliers that doesn’t just offer the pretense of flexibility, but are both flexible themselves, and to your evolving requirements. Before assuming that this is turning into sales pitch, bear with me, these insights are vendor-independent.
To cover flexibility off with a high-level explanation is no mean feat. Every buzz word ultimately boils down to this one capability and it is ingrained into every part of every business regardless of industry. The technology side has been covered to death, and as software vendors play buzzword bingo for platforms that span 40+ years in age, it is hard to base decisions on anything other than references and whose buzzword library best fits your own. Whether a platform is next gen, or the vendor is clinging to the fact that someone, somewhere highly rated them over a decade ago, technological capability is rarely the only factor in making a huge decision that affects all areas of your business for years to come – nor should it be. There is more to a partnership than the platform, product or service, there is the delivery, the people, the support and let’s not forget the price.
A modern-day vendor should be like a modern-day bank – customer-led. This means they themselves should have the flexibility and adaptability to meet all of your requirements, regardless of business area. You should never feel locked down, locked in and unable to differentiate or react quickly to requirements or indeed risk, whether your own, your customers, industry-driven or mandated. You should certainly never feel like you are at the back of the queue. A modern day vendor should be able to offer you the option to build, buy and/or transform as you see fit and to advise and guide you on these decisions; they should offer flexible payment options scalable to your business; flexible deployment options with extensive remote capabilities; and ultimately this relationship should be a partnership of payments experts working towards a common goal: evolving the payments industry and building better products and services, through the good times and the bad.
Let me leave you with a quote I recently came across that sums it up nicely: “blessed are the flexible, for they shall not be bent out of shape.”