Transaction stations

Nigel Cox of BPC Banking Technologies tells FST about the importance of contactless payments and details the need for flexibility in payment solutions.

FST. BPC persuades global banks to displace legacy and home grown systems with modern, open standards solutions. What are the key advantages in operating modern processing solutions over the legacy and proprietary systems currently used in many financial institutions?
Nigel Cox. Legacy and proprietary systems impose both a cost burden and an inability to innovate on the financial institutions that operate them. Some of these systems were designed and architected 20-30 years ago and, whilst excellent in their day, they no longer serve the purpose of putting the customer at the centre of the bank’s services. Modern systems, like BPC’s SmartVista, have been built around the concept of open systems in conformity with the industry standards that have emerged, for example ISO8583, EMV, PCI DSS, etc, and were designed to serve a financial market where growth can only be driven through innovation and systems must facilitate that. Their technological features allow modern solutions to create an effective customer management environment, better integrate to any IT and business infrastructure and support innovative products and services ensuring their faster time-to-market. The latter is an essential reason why the banks prefer to build in-house solutions instead of using third party processing services.

FST. The payment space is more complex today that it has ever been. How important is it that a processing solution is able to support all modern delivery channels?
NC. Without a processing solution that supports multi-channel delivery the financial institution may well be left to invest in separate solutions to support different channels with the resultant cost, skills and integration overhead. In the end a payment is a payment and to maximize its return investment any system user must seek to drive as many payment types and transactions as possible through its chosen platform. 

The payment card industry is widening offering more and more points of interaction with a customer. The IT infrastructure should support these ongoing changes to allow the bank to gain competitive positions at the market and better meet its challenges. SmartVista supports all these services as standard.

FST. Financial companies currently operate in a very uncertain market. How important is it that any payment solution is both scalable and flexible?
NC. Many financial institutions have burned their fingers dabbling in investment categories they did not fully understand. What they do understand is payments. In advanced economies such as Iceland, electronic payments represent nearly 75 percent of all transactions. In Central and Eastern Europe it may be below 15 percent and in West Europe perhaps 25 percent: If these markets can increase the proportion of electronic transactions, using the flexibility of modern systems to innovate, then banks would benefit at their bottom line.

A great advantage of the modern solution is the ability to grow in parallel with the business. SmartVista customers can always be sure that they can easily expand the solution as the need arises by adding new functionality and increasing throughput capacity. Today the largest SmartVista based processing center supports over 31M cards, 135 000 POS-terminals, 18,500 ATMs, processing about 7M TPD while benchmarks have shown that the system can be increased in scale even further reaching throughputs of over 7000 TPS on real workloads.

FST. With customers demanding more and more ways to interact with their banks and other financial solutions, how can a processing solution reduce the risks of identity theft and guarantee security?
NC. Traditional fraud management and detection solutions use simple rules and are essentially retrospective. But as transaction volumes increase it becomes more and more possible to model individual consumer behaviour using fraud systems that learn the behaviour of customers. The greater the transaction level the more accurate these models become, and as a result, anomalous behaviour like fraud can be more accurately detected. This is excellently supported by SmartVista’s Fraud Management capability, which provides a set of online and off-line mechanisms, from transaction filtering, to user-defined rules technology, and neural network based monitoring to help organisations reduce losses due to card fraud.