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The cloud: a great fit for payments

By Rupert Nicolay, Architect, Microsoft Enterprise Services on October 17, 2017

Filed under Financial Services - Banking & Capital Markets


Banks today are investing significantly in renewing their payment operations environments and systems, in part driven by the imminent arrival of instant account-to-account payments in the EU, US, Australia, and other key markets.  Some of the accompanying industry changes are described in an earlier post on this site. 

The fast-changing payments landscape

Beyond providing real-time capabilities, some payment infrastructure initiatives are also introducing new features such as managing the addressing of payments to customers using identifiers like cell phone numbers or email addresses. Over time, consumer payment instructions may increasingly originate from new sources such as the interfaces organizations are implementing to support open banking. 

These initiatives are also expected to place new demands on complementary business capabilities such as financial crime prevention. In addition, day-to-day IT operations processes in the payments environment are evolving to support not just the move from batch to real-time processing, but also to cover actions like the management of new interfaces and the onboarding of new partners who make use of these interfaces. 

A recent survey (Finextra’s 2017 AI in Payments) has shown that dealing with legacy systems and achieving the agility needed to meet new payment demands rank among the top technology challenges financial institutions face in the payments space. The study indicates that banks may be expending significant effort in roughly equal measure deploying payments solutions from ISVs and developing systems or enhancing existing in-house systems. 

The growing importance of the cloud

It should come as no surprise that the cloud is emerging as a key enabler for these projects. Many major payment solution vendors have announced the availability of their solutions (or plans for their release) on cloud platforms such as Microsoft Azure. One of the primary reasons for this choice is that the cloud delivers capabilities that can be crucial to success in building, integrating, and operating such solutions.

What are some of these capabilities? To begin with, the cloud is ideal for running development environments and enabling DevOps processes, providing the agility required for developing and testing payment solutions.  Further, it also facilitates managing partner API connections and handling the accompanying identity, security and sandbox requirements.  Capabilities such as these are essential to managing interactions with external parties, from payments originated through APIs to payment execution on industry platforms. Microsoft is working with banks today to deliver these capabilities on Microsoft Azure.   

Further, the analytics and artificial intelligence capabilities available in the cloud are useful not just for reporting, but also in areas such as enhancing financial crime detection. And, finally, the sophisticated operations management features of cloud platforms like Azure offer deep insights on the performance and behavior of payments solutions running in real-time. 

In sum, financial institutions are increasingly turning to the specific capabilities and agility of the cloud to transform their payments businesses and corresponding partner ecosystems.


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