Payments: what is going on behind the scenes?

The payments space has been the most frustrating to report on over the years. There is a collective groan in IBS Towers when the big payments conferences come around again. It feels like the same old people talking about the same old things. There will be lots of focus on the high-level issues, including that ‘FedEx’ comparison once more (we can see our parcels at any point in their journeys, why can’t we do the same with payments, particularly as these are electronic so should be easier to track than physical goods?). But when was the last time you heard a detailed case study at one of the events from a bank that has actually addressed and solved the issues?

‘Old school’ rules?

Macquarie Bank ©Mal Booth, Flickr

It would seem that for all the chatter about component-based core system replacement and gradual renovation, plenty of banks are still going the ‘rip and replace’ route.

Take Macquarie Bank, for example. In 2012, one of its senior managers called core system overhauls ‘old school’ and that the best model was to supplement existing platforms with layers on top for services such as apps.

In 2013, however, the bank went ‘old school’ and signed for a new core system, SAP for Banking. It has recently reported reaching a milestone in this five-year, AU$250 million project.