Cloud based payments-as-a-service enters the mainstream

Vijay Oddiraju, Volante

Cloud-based technologies continue to increase in popularity as banks and other financial institutions look to reduce IT costs, improve scalability and benefit from using on-demand products and services.

The conversations we have had with tier 1 banks over the last few years have revealed that they are interested in moving at least some parts of their business to the cloud. But interest is not confined to the largest financial institutions – small to medium sized banks are also actively exploring the potential of cloud technologies.

There are several factors behind this trend, one of which is that maintaining data centres is becoming increasingly expensive in terms of updating hardware, as are the IT resources needed to ensure that software is upgraded regularly. Volante helps dramatically reduce these costs through our scalable cloud offering, which is particularly important for tier 1 banks looking to tap into non-cash payments in emerging markets, a market we expect to grow exponentially over the next five years.

Another challenge banks face is that project implementation cycles are lengthy, which can be frustrating for teams looking to bring products to market quickly. To address this challenge, we have seen an increase among banks in outsourcing non-core functions such as IT infrastructure. Banks (and other financial institutions) are becoming increasingly comfortable with the concept of outsourced technology services, realising that this approach allows them to focus on their core business operations rather than technology issues, which come with associated costs, risks and delays.

Large banks tend to be the early adopters of new technologies as we have seen in areas such as artificial intelligence (AI) and real time/instant payments. However, when it comes to the cloud, we have seen a trend among smaller banks in adopting cloud-based technologies, and as a result we are seeing more and more financial institutions considering a move to the cloud.

By way of example, earlier this month we signed up FIMBank Malta as the first customer for our new cloud-based VolPay-as-a-Service offering, which will provide a managed service for processing SEPA payments in the cloud. We expect this move will make other financial institutions feel more confident about migrating to the cloud, especially when they can demonstrate cost savings and roll out new products more quickly.

Any institution looking to transform its payments infrastructure can now accelerate that transformation by consuming VolPay-as-a-Service in the cloud, rather than embarking on a lengthy in-house deployment. Real time payment initiatives in the US and developments such as PSD2 and Open Banking in Europe are a further incentive for banks to move to outsourced, cloud-based services. By leveraging Microsoft’s experience in cloud technology, we can now offer the most advanced payments capabilities as a resilient, scalable and highly secure service.

By Vijay Oddiraju, CEO, Volante Technologies

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