Sybrin

Part I


Payment Industry Initiatives:
Payment Modernisation

Financial Institutions (FIs) have been modernising their payments solutions for several years due to regulatory pressure, customer expectations, and innovative fintech solutions. This trend will undoubtedly continue as the dawn of the fourth industrial revolution is imminent. In this three-part series of articles, we will be discussing the payment initiatives within the financial services sector, as well as Sybrin’s proficiencies in this field, and how we are able to meet and exceed the needs and expectations of our customers as well as address the trends we are seeing in the marketplace.

In this first article, we look at the current trends in the sector and how FIs are preparing themselves for the future through payment modernisation.

Industry Approach

FIs have realised that a “rip and replace” approach is impractical due to budget constraints and the immense impact that change has on the workforce, who must support such an initiative. In most cases, a more tactical approach is required. FIs have started to consolidate different payments processes into a single central, standardised, and coordinated platform known as a ‘payments hub.’

Payments Hub

The Sybrin Payments Hub offering is well suited to this approach given its focus on:

People: Often overlooked in large-scale modernisation projects, is the impact on people - irrespective of whether they are customers or internal employees. Sybrin’s Payments Hub can effectively reduce manual work performed by people. An example is where corporates use the Payments Hub to replace multiple internet banking applications, and the related management of beneficiaries with a single payment process.

Process: Our Payments Hub supports an extensive catalogue providing off-the-shelf payment processes which can be used as follows:

  • Off-the-shelf payment processes can be installed and customised to FIs' specific business requirements, in a quick time to market. This is achieved using our low-code platform; Nitro , without the need for any heavy coding.
  • FI’s can undergo process re-engineering in order to identify duplicate, inefficient, or redundant processes during the process mapping exercise.

Technology: Our Payments Hub’s ability to integrate into any legacy system, allows for a tactical approach through the optimisation and convergence of payment processes, without the need to replace all component items at once.

ISO 20022

ISO 20022 migration will have a far-reaching, positive impact on the payments world. The Sybrin Payments Hub has been enhanced to provide the new structures and processes required to support ISO 20022 processing.

We can assist FIs as follows:

Regulatory pressures: From November 2022, the SWIFT network will not permit any new projects using the older MT standard, with support provided to existing solutions for a limited period. From November 2025, SWIFT will not permit any solutions running the older MT standard. This means all current MT solutions must be migrated to ISO 20022 by no later than November 2025 to account for the required industry testing.

Our Payments Hub has SWIFT-compliant functionality that can translate SWIFT MT messaging to MX (ISO 20022) formats, this greatly assists existing solutions in becoming ISO 20022 compliant as there is no need for an exhaustive rewrite.

As our Payments Hub integrates into a large number of legacy systems, it can be used to build ISO 20022 messages effectively from a variety of legacy systems/messages.

SWIFT ISO 20022 messages are implemented in accordance with the SWIFT CBPR+ (Cross-Border Payments and Reporting) standard.

The ISO 20022 standard is ideally suited to support the ever-changing face of payment products. Sybrin’s Payments Hub allows quick product and message structure changes using our low-code platform. This allows FIs to define ISO 20022-compliant products for alternative payment initiatives like social, crypto payments, biometric payments, etc. For example, it would be possible to add a digital fingerprint image to a biometric payment message.

Open Banking

With consent from the customers, the open banking initiative will enable banks to share their information with third parties, allowing them to introduce numerous value-added services.

Banks can work with external parties and build a much bigger ecosystem than traditional banking functions, which may appeal to more customers. For example, it might be possible for a customer to use their banking app to buy insurance, buy a car, obtain comparative quotes, or perform financial retirement planning, based on their unique financial situation.

In addition, ‘Request to Pay’ services have been introduced this year and it is predicted this feature alone will save £1.3 billion per annum in billing costs (Pay.UK and Ipsos MORI report published September 2019).

Customers will benefit by having the authority to allow trusted Account Information Service Providers (AISP) and Payment Information Service Providers (PISP) to perform specialised functions for them. For example, a customer can install an app that analyses their spending habits simply by connecting it to their bank account (via the bank’s open API). Or they can allow their favourite social media program to pay for goods on their behalf.

The Sybrin Payments Hub supports FIs in the following ways:

An open banking set of APIs and processes are provided which can be used as a basis for an implementation.

In partnership with experts in area specific implementations - like Payment Services Directive Two (PSD2) in Europe, Africa-specific versions. Unfortunately, open banking legislation is lagging in some countries, which makes a uniform approach difficult.

The Sybrin Payments Hub can effectively translate between open banking APIs and legacy systems.

The need for strong authentication causes friction in the open banking process. Our Payments Hub supports industry authentication standards such as OAUTH, SAML, Windows Auth, etc, and can help our customers set up two-factor authentication (2FA).

Payment-as-a-Service (PaaS)

The Sybrin Payments Hub is already available for deployment as Docker containers on private cloud, or on-premise. The solution supports a multi-tenanted hosted model, with secure data segregation on public cloud.

Modernisation of High-Value Payments Systems

The Sybrin Payments Hub is in the process of integrating into South Africa Multiple Options System (SAMOS), which is the core of the South African settlement system. SAMOS is a modern Real-Time Gross Settlement (RTGS) system that is owned and operated by the South African Reserve Bank (SARB).

Settlement participants must have the ability to meet the liquidity, information, and communication technology (including security) requirements set by the SARB, in order to participate in SAMOS. Our Payments Hub fully supports these requirements.

In Conclusion

FIs need to take many aspects into consideration when procuring a suitable solution. Read more on this topic in our next article on instant payments, or contact us to find out how Sybrin is able to assist you with a unique tailored solution to modernise your legacy payment systems and processes.

To read more about our Payments Hub Solution, visit apex.sybrin.com/payments-hub

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