New Finextra and Volante Technologies survey reveals almost four-fold increase in bank adoption of Payments as a Service

LONDON, September 12, 2023 –  Volante Technologies, the global leader in cloud payments modernisation, today published key findings from its annual research collaboration with Finextra, ‘Payments Modernisation: The Big Survey 2023’. The global survey of 300 senior bankers reveals a seismic shift towards cloud-based Payments as a Service (PaaS), with an almost four-fold (364%) year-on-year increase in the number of institutions planning to outsource their payments processing to a PaaS provider.

This rapid shift towards PaaS is occurring within an industry context of ever greater reliance on cloud. A full 90% of all respondents indicated that they currently use, or plan to implement, a cloud-based payments infrastructure, whether provided by a PaaS supplier or their own private cloud. Only a minority (9%) maintain a preference for traditional data centers.

Survey data also indicates that despite a turbulent macro-economic environment, banking leaders see payments as a high-priority area for technology investment, with 72% of respondents expecting to increase their budget for payments modernisation in the coming year.

Other findings include:

  • While all geographies showed an increase in PaaS interest, the shift was even more pronounced in North America, where more than half of respondents now favor PaaS
  • The pace of modernisation is accelerating, with two-thirds of new payments solution implementations expected to take place within the next twelve months
  • ISO 20022 compliance for domestic clearing remains a challenge, with less than a third of financial institutions able to deliver sophisticated products and manage compliance in a cost-effective manner

The survey also provides important insights into bank customer satisfaction. The greatest pain point for bank customers (79%) is access to real-time or intraday liquidity management, with the cost of service a close second. A bright spot is cross-border payments, with 37% citing higher customer satisfaction with the efficiency of cross-border payments, up from 28% last year.

Deepak Gupta, EVP Product, Engineering, and Services, Volante Technologies, said, “We expect this survey to spark animated discussions about strategic priorities for banks and their customers. The data clearly shows an overwhelming preference for cloud, and within that a rapidly growing movement towards working with Payments as a Service partners.”

Gupta continued, “The results are consistent with our experience working with over 150 customers worldwide. Banks are facing rapid change on multiple fronts with new payments rails, the rise of real-time and instant payment schemes, ISO 20022 compliance, API banking, and regulatory mandates. Cloud and Payments as a Service can provide a fast-track path to payments modernisation for institutions of all sizes.”

Anna Milne, Senior Research Editor, Finextra, said, “The urgency for the clear benefits of cloud-based payments services, and specifically for the outsourcing of these, is evident in the staggering increases year-on-year in implementations, as stated by respondents.”

Finextra and Volante conducted the survey in early 2023. Of the respondents, 40% were C-level or equivalent, with the rest senior management, director, or VP. By geography, 30% were from North America, 20% from Europe and the UK, and the remainder from the rest of the world. The largest cohort of respondents (41%) work in corporate transaction banking, with the remainder in SME banking, retail banking, and banking technology.

Download a complimentary copy of the survey, ‘Payments Modernisation: The Big Survey 2023’.