In today’s environment, it’s all about faster payments! Customers are demanding near real-time payments and banks, especially in the United States, are struggling to keep up. Non-bank third-party processors find themselves in a situation where they do not have the requirement of regulations or risk management that banks do. Add a brand-new payments infrastructure to this and banks are struggling to compete, with the odds stacked against them. In the bid to compete in this faster payments world, banks are implementing new technologies at a rapid pace to uplift an ageing payments infrastructure while ensuring regulatory compliance and reduced risk to customers.

From a bank executives’ perspective: “How do I deliver a great user experience to my customers through a near real-time payments product, while meeting new regulatory requirements, and ensuring that we increase fee income simultaneously?”

“How do I deliver a great user experience to my customers through a near real-time payments product while meeting new regulatory requirements and ensuring that we increase fee income while doing all this?”

Sounds like a tall order, doesn’t it? Make no mistake it is - and we don’t have all the answers! What we do know, however, is that every new payments implementation or payments system upgrade/release is fraught with risk (just like most implementation/upgrade projects are) and there are aways potential landmines waiting to blow up. Some of these potential landmines that we have experienced are as follows:

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Business-Related

• Wire payments pose the highest risk in a payments implementation, followed by other payment functions
• Evolving requirements and customized capabilities (that move away from the core functionality of a vendor product) introduce avoidable new risks
• Dependency and coordination of activities with interfaces provided by third party’s typically result in delays
• Compressed Quality Assurance and User Acceptance Testing cycles result in poor quality
• Single points of failure (one person responsible for key activities) result in schedule slippage
• Data and client migration components need special attention

Technology-Related

• Performance of payment systems is critical and test data generation for the same is fraught with issues
• Similarly generating test data for end-to-end validations can impact schedule
• Outage or data refresh in the host/back-end integrating systems results in rework
• Triaging and fixing environment issues specific to Quality Assurance, Pre-Production, or Production can be challenging
• Lack of environments/multiple activities being simultaneously carried out on the same environment (e.g., functional, data migration and performance testing being carried out on the same environment) can result in an activity stack up
• Interface contracting risks always exist with a payments system, given the number of systems it interacts with

Some of the ways in which we have experienced banks avoiding these landmines are:

• Ensure that they have enterprise-wide buy-in before embarking on a project of such nature. This includes being on the same page on scope, objectives, deliverable, responsibilities, funding, and resources
• Create a fully integrated project map
• Identify key risks upfront and devise mitigation strategies
• Create realistic timelines and plan integrations early
• Establish Go-Live criteria up-front and share it with everyone involved in the project

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We would love to hear some of the other experiences you have had on either landmines you encountered, or ways you avoided one!