Payments

Change: It is here, and it is here to stay

The Payments industry is on a cusp of change. The rate of change and innovation within payments has accelerated over the last decade. Payments itself is going through a round of digital transformation with the rise of smart phones, data analytics, social payments and crypto-currencies.

At the moment, banks are dominant in global trade payments. In 2012, global trade accounted for $22.6 trillion and global remittances volumes are estimated to have reached $559 billion in 2013. However, start-ups in Payment technologies raised $492 million VC Funding in 2014 to support, or supplant, existing Payments companies. Also regulators are making it easier for companies to encroach on traditional players within Payments. For example, banks with PSD1 in Europe are already creating the concept of non-bank Payment Service Provider (PSP) and PSD2 is on its way. This will further make banks to give away their account information to third parties.

Challenges
The rate of change of technology and regulations are creating challenges for financial institutions:

  • Regulatory & Messaging Standard Changes
    • BIS coming up with International Payment Frameworks
    • Global banks adapting to IBAN standards
    • Movement towards ISO20022 message format as the standard
    • Banks having to be flexible to meet regional regulations
  • Move Towards Real-Time Payments
    • UK and Canada already moved to faster Payments services
    • Singapore G3 in progress, Australian NPP launched
    • Faster Payments coming to US – Task force to be created during early 2015 with an implementation plan by 2016
  • Technology & Mobility
    • Most bank platforms are legacy based and were built a generation ago
    • With banks growing through M&A they have been stuck with a plethora of systems doing similar functions
    • Mobile as a platform and the rise of omni-channel means that the customer expects to be able to do payments and get status seamlessly across multiple platforms
  • New Entrants
    • Entry of new payment companies have given scope for more services at lesser price
    • New entrants bring value add services such as Document management, Receivable Management, Reconciliation and Straight Through Process in addition to Payment Processing
  • Digitization and Big Data
    • Social media provides a unique way of interacting with customers and strengthening relationships
    • Data mining associated with payments can provide unique nuggets of information that clients are willing to pay for

Our Solutions
With the depth of experience in payments, Polaris is helping clients to proactively meet these challenges. Polaris’ key expertise in payments / transaction processing covers online / mobile transactions, transaction hubs and straight through processing.

Online / Mobile Transactions
Customers are increasingly demanding a single touch Amazon-like experience for all their interactions with their service providers. There is a significant shift towards convenience, reliability and timeliness of the service as key drivers to adoption. Polaris has executed world-class programs for online / mobile transaction processing.

Key Experiences

  • Mobile enablement solutions across cash management, wealth management and financial advisory services – across multiple platforms, devices. Polaris experts have also done mobile testing and performance testing for various clients
  • Polaris has built the world’s largest corporate payment portal for Citibank that supports initiation, transaction and reporting of multi-country, multi-currency payment products and services

Integrated Transaction Hubs
Banks are consolidating payments strategy for multiple product lines, through shared infrastructure and enterprise-wide view customer relationship into centralised processing utilities that provide complete visibility and a consolidated view of all payments from the point of initiation to execution. Integrated transaction hubs enable a single view of the entire lifecycle of the payment / transaction, with high levels of automation and exception handling.

Polaris works with clients to:

  • Build transaction hubs that can help manage different transaction lifecycles on a global basis. Such platforms are built using a unique combination of technologies such as workflow automation, exception handling, digitization, mobile and online channels, etc. Polaris’ transformative technologies, such as Hub technology, have been implemented in over 20 global financial institutions and have won awards from leading global analysts such as Celent’s Xcelent awards for innovation and depth of coverage
  • Map functional architecture across all products lines from channels, mid-office to product processors / operations hubs
  • Identify functionalities related to Transaction Processing, Payments and GLs, and interfaces into channels and payments networks
  • Isolate functionalities specific to product line and common services such as payments, customer on-boarding, and customer relationship view
  • Re-engineer processes, implement engines that automate reconciliation process, and enable systems to accept asynchronous messaging with higher throughput

Key Experiences

  • Provided Payment gateway solution that consolidates multiple legacy payments pre-processors to a single payments pre-processor handling rapidly growing transaction volumes in over 48 countries
  • Provided high performance intelligent hub to link customer facing transaction initiating e-business channels to back-end product processors to support all Latin American countries with single central deployment. The solution is designed for highly scalable, performance-driven architecture, benchmarked to handle volumes in excess of 1 million transactions per day with peak processing capability of 360,000 transactions per hour
  • Built a platform to integrate balances, limits and transactions systems as part of the Funds Control Hub solution for one of the largest high street banks
  • Offered a Business Activity Monitoring (BAM) solution for a large bank to help track payments real-time across several different payment engines, including global wellness view, which identifies exceptions in Payments flow anywhere in the world. This enables corporate customers to adhere to clearing house cut-off deadlines

Higher Straight Through Processing
As payments / transaction processing rapidly becomes a commodity, clients are forced to identify ways of reducing operating costs through elimination of paper, enhancement of self services, reduction in manual processing steps and re-work. Straight through connectivity and interoperability is a basic need for servicing increasingly interconnected markets and business processes.

Polaris works with clients to:

  • Re-engineer processes, implement engines that automate reconciliation process, and enable systems to accept asynchronous messaging with higher throughput
  • Optimize processing environments targeting reduction in execution times, increasing throughput, and reducing TCO of operations through higher intelligence driven automation and digitization of processes
  • Map processes, assess and optimize workflow and automate functions using L0 / L1 maps and Master Process Exchange (MPX)

Key Experiences

  • Performed a transaction banking modernization consulting study for a large foreign bank to help structure its modernization path for their US operations in terms of specific solutions, prioritization, timelines across cash management verticals covering Payments, Liquidity, Collection / Receivables and Portals
  • Polaris’ architects have raised the automation level in a paper-intensive, interaction-intensive environment, such as Trade Finance, to over 30% through innovative design of the digitization and automated processing, thus reducing $27million in operating costs for Citibank
  • Performed an ‘IT Capacity Review’ consulting study for a high street bank in the UK for validating the feasibility of ‘globalizing’ its regional client on-boarding / KYC platform across functional, technical and design dimensions
  • Developed and implemented a seamless system integrating front-, middle-, back-office and aggregation functions and enabled Internet, Branch and Mobile trading and investment services on Equity, Equity Derivatives, Currency Derivatives, Interest Rate Derivatives, Commodity Derivatives, Mutual Funds and IPOs for one of the largest retail brokers in India. The system handles daily trade volumes of 300,000 trades, with peak loads of 500,000 trades per day
  • Built a single document management system across all applications for a large private bank. The system manages document flow from client on-boarding to transaction initiation to processing to statements and correspondence
  • Built total, cross-asset liquidity view capability across the bank for the treasury department of a global top tier bank
  • Built a single global credit risk platform to handle process flows and risk models across multiple lines of business and multiple countries for a leading global bank