Strategies and criteria for new payments technology investments

In the relatively short span of perhaps a decade, ‘payments’ have emerged from sub-conscious obscurity in the back shops of banks to assume a functional identity of their own as a valueadded financial services industry, and a priority item in the strategic planning agenda of virtually every institution. But payments are also at the core of the ongoing revolution in banking, from a traditional mainframe- and paper-based transaction model to an Internetbased, electronic transaction model. As technology improvements, new regulations, competitive pressure and customer expectations drive an accelerating evolution from paper-based cheques to electronic forms of payment, banks and the vendors that provide their payments-related technology find themselves at odds with longestablished processes, systems, revenue streams and value propositions. Vendors, in particular, are facing many new questions and challenges as they plan their market strategies and product portfolios for financial institutions. With the payments arena in such upheaval, how should a financial services vendor determine what technology to invest in or bring to market? What factors are involved and what criteria are important in this new payments environment? This paper addresses how a leading financial services technology vendor approaches these and similar questions. By carefully laying out how to distinguish between tactical and strategic approaches to the changing payments landscape, it will provide vendors, bankers and other interested parties with a practical road map that can ensure alignment between short-term and long-term technology objectives.