is often difficult to define, yet there are three characteristics that PaaS possess. These can be classified as the Three C’s – Customer, Collaboration and Cloud.
According to a recent poll of banks surveyed1, 56% believe that the ability to offer complementary third-party products is the biggest pain point, while speed to market is in second place at 38%.
This idea of creating an “app store” for corporate banks to satisfy changing customer needs is becoming a reality. Consumers are used to immediate consumption via app stores such as Apple and Google, and in the corporate world there is an even larger marketplace. As a bank, you need to think about who you are targeting and what needs you are addressing. Typically, large corporates have complex problems, yet smaller banks have quite dissimilar needs. Banks are becoming more agile, and by collaborating with fintech’s and partners, they are enabling corporates to innovate. Banks are no longer thinking about the cost association, but the differentiated customer pain points to offer new services and overcome market challenges at speed.
According to that same poll1, 37% of corporates believe they will be ready for PaaS integration in about 12 to 18 months. 37% also states that they will be ready to adopt PaaS within 18 months to three years. This result is not surprising, as a recent survey by Volante’s and in association with Finextra found:
“We expect that with more than half of organizations planning to make changes to the hosting and delivery model of their payment’s infrastructure within the next 12 months, that the current 22% of organisations using hybrid cloud and 9% engaging with a payments-as-a-service provider, will increase.”
Corporates understand that cloud offers flexible services. They are no longer “ready” to migrate as they are already adopting cloud infrastructure for mission critical applications. Their focus is now on more easily accessible additional services, such as fraud (machine learning and AI) and lookup services. Emerging revenue opportunities for banks will be through collaboration with partners and vendors by utilizing their experience and skills on innovative technology services.
Additionally, there are opportunities to adopt a PaaS-based model through leveraging APIs (Application Program Interfaces), which will be key for modern companies to integrate dynamic, consistent services into cloud-based platforms. This converged technology will improve the customer experience while modernising the older systems into the new world.
An Integrated Platform for Everyone
The pressure to do more with less is a familiar constant for those operating in the financial services sector, but it is particularly pertinent in the payments space right now. Therefore, it is ideal time to shift focus toward innovating customer service initiatives via third-party collaborative opportunities, and upgrade to a cloud-based PaaS platform. This way of thinking will elevate the payments landscape into a faster, brighter future.
1 Payments Modernisation: US Mid-Tier Banks, Volante Technologies, 2021