Global online payments registered robust growth during the pandemic due to the shift to digital commerce. Economic recovery in both B2C and B2B sectors is likely to sustain the momentum in payment services. Regulatory approvals for open banking systems and specialized payment services will also enhance adoption of global payment services.
Strategic imperatives for the banking industry are to: build channel and product-agnostic unified money movement capabilities; perform intelligent payment routing; enhance the digital payments experience; and modernize technology and infrastructure.
Key pain points in the payments business include redundant solutions for money movement and payment options, and a lack of open APIs resulting in higher costs of integration.
To address these pain points, organizations should seek capabilities such as:
- The consolidation of payments processing across rails (Wires, ACH, RTP, Zelle)
- The ability to build-out enterprise APIs for internal and third-party integration
- The development of simplified payment capabilities, such as smart routing, implementation of real-time-payments
- The ability to address gaps in transaction data ingestion
- The implementation of data analytics use cases
Yet, heavy capital investment is not an option for banks due to bottom-line considerations. Cloud offers a viable solution here to abstract an as-a-service operations model and achieve stellar business outcomes. Banks have started engaging Payments-as-a-Service players to leverage certain services offered on cloud-based platforms.
Cloud: A payments catalyst
A public cloud offers scalable and flexible infrastructure for innovation in payments. It amplifies speed and agility, while driving economies of scale. Open interoperability and microservices-based, cloud-native architecture create an advanced payments ecosystem. Moreover, cloud platforms empower banks and financial enterprises to launch Payments-as-a-Service without incurring capital expenditure. Application Programming Interfaces (APIs) integrate cloud platforms, payment products and core banking systems with third-party services. API-driven plug-and-play accessibility to ecosystem functionality facilitates seamless consumption of services such as billing and settlement, cross-border payments, risk management and fraud detection.
Cloud-based payment services and APIs accelerate straight-through processing for enterprise payments while driving co-innovation in both wholesale and retail payment products/services. They also demand a strategic approach covering business architecture, cost, regulatory and innovation considerations.
A functional area that has undergone much transformation is the data analytics domain.
An enterprise data platform is a must-have capability — specifically a data lake on the cloud, combined with AI/ML capabilities — with the underlying payments data stored in a secure public cloud such as Amazon Web Services (AWS).
AWS reinforces the payments ecosystem with a wide range of services and out-of-the-box security controls that are independently verified. Moreover, the AWS Cloud infrastructure is enhanced with assurance programs such as PCI DSS Level 1, SOC 2, SOC 3, and multiple ISO 9001 and 27000 series standards.
At Infosys, we implemented several enterprise payments transformation programs for global clients, ably guided by our Infosys Payments Council. These initiatives have been further powered by Infosys Cobalt, our cloud ecosystem of services, solutions and platforms, and a repository of cloud blueprints and assets. Our experience suggests that banks and financial institutions investing in AWS Cloud across the payments value chain can improve success metrics and enhance the customer experience by leveraging the AWS services suite for data analysis, as well as predictive and data security capabilities.
Establish a data lake
Payment services providers require a robust system to manage and monetize a large volume of customer and transaction data stored on cloud platforms. The Amazon S3-based data lake solution offers unified problem solving for data requirements.
Infosys implemented a data lake for a global bank, migrating ~400TB on-premises data to the AWS Cloud. Our solution — implemented on AWS Cloud data lake with Amazon S3 — delivered 30% cost savings. Significantly, it facilitates real-time data consumption for monetization via targeted promotions and personalized offers, and several critical use-case scenarios such as transaction risk management and fraud detection. The solution has provided several self-service and exploration capabilities for business users, leading to more customer intimacy and increased life-time value of customers.
Apply AI / ML models
The ability to predict customer behavior based on historical purchase patterns or response(s) to relevant offers enhances payment products while maximizing returns on marketing investment. Amazon SageMaker enables smooth deployment of AI/ML techniques in the existing payments landscape.
Infosys deployed AI/ML models at a leading financial services company for troubleshooting and problem solving. Our solution allowed teams to test and validate ML models for development and staging environments prior to deployment in production. AWS services such as AWS Lambda and Step Functions for processing, training, and scoring data pipelines streamline execution of ML models in Amazon SageMaker.
Ensure data security
A single data breach can ruin a business; the highest level protection of Personally Identifiable Information (PII) is non-negotiable in financial services. Amazon Macie, the AWS managed data security and data privacy service, offers a structured framework to discover and protect sensitive data, while detecting and preventing fraudulent payment transactions.
Our team adopted AWS Macie for a leading financial services company’s AWS Cloud adoption program using a standardized solution blueprint. Our solution covered sensitive data discovery in S3 buckets, creating a long-term repository of discovery result set. We developed a custom data identification framework to identify contextual client-specific text patterns. Macie’s alerts were linked towards auto remediation and escalation based on the severity of the alert. This structured security framework has helped address the company’s cloud security needs.
A suite of complementary AWS services — including over 20 security-centric and more than 20 compliance and governance tools — equip banks, financial institutions and payment services providers with must-have features to capitalize on the exponential storage and on-demand processing capabilities of the AWS Cloud. The AWS portfolio — combined with Infosys Cobalt and certified experts — delivers revenue growth by offering payments-as-a-service through various distribution channels and improves customer satisfaction through analytics-based actionable insights.
About the Authors
Chandra Nandakumar, Associate Vice President & Senior Delivery Director, CIS Cloud Practice, Infosys
Taiji Saotome, Sr. Solutions Architect, Financial Services sector lead for Infosys-AWS alliance