A new report from Tietoevry Banking reveals how deep the legacy technology crisis runs for today’s retail banks in payment cards – and discusses options for how these banks can migrate to modern, flexible and more secure card technologies.
Retail banks face a card platform cliff
The report, “Options for Change: migrating to modern card payment platforms” says almost two thirds (61%) of banks are looking to replace their card systems, more than half (52%) of which are between 10 and 20 years old.
Valdis Janovs, Head of Instant, Retail Payments and Cards at Tietoevry Banking, said: “The age of current systems is a key factor driving banks’ current interest in migration.
The legacy systems currently in use cannot adapt to a modern, digital economy – from instant account-to-account payments to digital marketplace transactions and similar.”
Tietoevry’s report shows half (48.9%) of banks surveyed are struggling with outdated IT architectures, the cost of maintaining legacy systems (44.9% of banks) and the complexity (38.8%) of these systems.
Such costs are now becoming unsustainable, with the UK’s Financial Times claiming that banks now spend up to three-quarters of their technology budgets on maintaining legacy systems, rather than on innovative product and customer service development.
The report also considers some of the complexities migration to new card platforms can bring – and how to deal with them.
Banks are most concerned at their own lack of internal capacity (54.8%) and project over-runs (61.3%), as well as other internal factors – findings which suggest that working with an external partner with the right experience is a crucial success factor for any card technology migration.
Commenting on the report, Toms Jansons, Senior Strategic Product Manager, said: “One key issue for banks is aligning IT needs with those of the business.”
“Banks should allocate significant resources to defining the scope of their migration internally and to ensuring that they are able to re-evaluate their existing product portfolio and business processes, unify their interfaces as much as possible and overall streamline the IT and business operations landscape.”
The new report, follows on from a 2022 study by Tietoevry Banking that examined bank views on their existing card system deployment.
This year’s report considers where banks stand in their migration to new card platforms and examines the different approaches banks can take to deliver modern, flexible and efficient payments for their customers.
The study surveys the views of 81 banks, four in five of which have turnover below 30 billion Euros: a segment that frequently has to make difficult choices when it comes to IT infrastructure given their lower budgets.
Around two-thirds of respondents to the survey were senior decision-makers, either from the C-Suite or Heads of IT or Payments functions.
To learn more about the right card platform migration strategy for your bank, download the new report from Tietoevry Banking now.
The post Retail banks face a card payment platform cliff: new report provides solutions appeared first on Payments Cards & Mobile.
