Three-quarters of European banks to outsource payments infrastructure

A new study from leading banking and payments infrastructure specialists Tietoevry Banking reveals that almost three-quarters (73.2%) of European banks intend to outsource parts of their payments infrastructure over the next 3-5 years.

Based on original research conducted with senior decision makers in more than 65 European banks, Tietoevry’s report highlights that some 60% of banks surveyed currently outsource part of their processing requirement, with 51.4% outsourcing fraud management and slightly lower proportions opting to outsource parts of their card management and account management functions.

The report also shows that banks are driven to outsource payment services by their need for greater operational efficiency, with better platform functionality and flexibility and the capacity to reduce cost cited as other main drivers in order of importance.

While banks recognise the need to outsource parts of their payment services to enhance competitiveness and focus on innovation, they have concerns about their ability to set and manage Service Level Agreements (SLAs) with outsourcing providers, as well as their organisation’s capacity to adapt its internal processes for outsourcing.

Other findings from Tietoevry’s payments infrastructure report:

• Most banks have a realistic view of the cost savings that can be realised through outsourcing, with 38.2% of banks hoping to achieve a shift of 15% between CapEx and OpEx;
• When it comes to outsourcing infrastructure, 38.7% of respondents intend to opt for a multi-tenant solution to meet their Software as a Service (SaaS) outsourcing needs over the next year. Single-tenant solutions are the next most popular option at 29%.

Commenting on the findings of this survey, Valdis Janovs, Head of Instant and Retail Payment Services at Tietoevry Banking, said: “These results underline the need for banks to work with trusted, knowledgeable partners as they develop their approaches to outsourcing and migrate more of their card and payments businesses to outsourced service providers.

Looking out over the next decade, we expect public and private cloud hosting for outsourced payments services to coexist, though we also anticipate public cloud hosting will develop more specialised solutions for the banking and payments markets.”

Toms A Jansons, Senior Strategic Product Manager at Tietoevry Banking, added: “We expect Software as a Service (SaaS) arrangements to prevail in the longer term. Banks have a good working knowledge of the risks involved in certain parts of the outsourcing process.

However, they are still understandably conservative and our study shows the need for banks to develop confidence, knowledge and good working practices when it comes to outsourcing.”

Click here to download a copy of “The Future of Payment and Card Outsourcing” now

For further information, photography and interviews, please contact:

Inga Steinerte – Inga.Steinerte@tietoevry.com

Product marketing lead, Tietoevry Payments

Notes to Editors:

1. About this survey: In May and June 2022, Payments Cards & Mobile (www.paymentscardsandmobile.com) surveyed more than 65 senior leaders from European banks, over half of whom hold C-suite positions or have primary responsibility for payments in their institution. The banks in this survey came from all tiers of capitalisation, with concentrations in the large international (more than €30 billion capitalisation) and smaller national (less than €1 billion capitalisation) segments. 43% of respondents came from the UK or Western Europe, 25% from the Nordics and Central and Eastern Europe, with the balance coming from the EEA and other territories. Almost three-quarters of respondents (72%) came from banks whose primary interest lies in issuing payment products. Click here to download a full copy of the report
2. About Tietoevry Banking: Tietoevry creates purposeful technology that reinvents the world for good. We are a leading technology company with a strong Nordic heritage and global capabilities. Based on our core values of openness, trust and diversity, we work with our customers to develop digital futures where businesses, societies, and humanity thrive. Our 24 000 experts globally specialize in cloud, data, and software, serving thousands of enterprise and public-sector customers in more than 90 countries. Tietoevry’s annual turnover is approximately EUR 3 billion and the company’s shares are listed on the NASDAQ exchange in Helsinki and Stockholm, as well as on Oslo Børs. tietoevry.com

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