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Ambitious banks must choose new platforms to ride the waves of change

Pismo, a Drona Pay partner, investigates why legacy platforms hold back forward-thinking financial institutions

The financial services sector has undergone a period of intense change. Unpredictability and market forces have shown adaptability, and rapid time-to-market hold an ever-increasing value for organizations.

Customer change has mirrored evolution in the market. The average user now expects an always-on digital service with as few barriers as possible. This applies whether making regular purchases or significant one-off transactions.

Yet, many institutions are at risk of disappointing their customers through the continued use of ageing legacy technology. Key components of a bank's infrastructure, like core banking, payments processing, and card management are often operating on legacy systems built more than a decade ago. Legacy payment systems reject up to one in seven transactions in the US.

As commerce moves increasingly online, the payment stack has become critical for all aspects of the chain. They need to know their financial institution of choice can handle payments large and small at scale. Few organizations can look to their legacy systems and trust them to handle

surges like Black Friday.

Cloud-based infrastructure can help banks overcome the limitations of their legacy systems. Platforms built from the ground up with API connectivity and microservices-based flexibility in mind unlock the potential of forward-thinking financial institutions.

Increased flexibility

Aging legacy systems may struggle to support new payment methods and technologies. Integration with new providers, based on API standards, could even require the implementation of an entirely new infrastructure overlay. Cloud-based systems are designed for flexibility and are adaptable to new methods. Integrating new products can take weeks, instead of months, to achieve.

Lower costs and unlimited scalability

Many financial institutions are running exceptionally high bills to maintain their legacy systems. In some regions, up to 75% of the IT budget is dedicated to upkeep old infrastructure. Replacing an on-premises solution like-for-like incurs upfront costs, installation fees, and a fresh set of ongoing payments to run a floor of servers. When under extreme load, banks saddled by on-premises technology must scramble to provide more power and storage, leading to even higher


Leading cloud providers remove these exorbitant expenses, providing support via an ongoing subscription fee. The cloud also enables firms to scale up on demand during peak times and down during quieter periods without disrupting customers.

Risk and resiliency

Older platforms require frequent upgrades, renovations, and tweaks to meet emerging and ongoing security threats. Public cloud providers, meanwhile, feature enhanced capabilities. For example, Amazon Web Services (AWS) complies with various measures, including PCI-DSS, SEC Rule 17-a-4(f), Reg SCI, GDPR, FUPS 140-2, and NIST 800-171.

Cloud platforms also offer several extra security features. These manage access, analyse data for irregular activity with machine learning capabilities, mitigate DDoS attacks, encrypt data, and send alerts whenever resource changes are made.

Cloud-based technology providers, and the cloud services that support them, know they live and die by the security credentials they display to their customers. Prominent vendors make significant investments to ensure downtime and disruption are minimal.

Migration made easy

​​Executives at banks used to on-premises data centres or even private cloud configurations may baulk at the prospect of wholesale cloud adoption. Luckily, technology providers like Pismo

enable a composable approach to change.

Financial institutions can run a public cloud-based platform alongside legacy systems without prohibitive costs. They can migrate a few accounts and test the system before committing to a complete transfer.

Pismo has developed a tool kit to help banks move account data to our cloud-native platform using our APIs or data files. It means our clients have total visibility and control over transferred data and other details during this process.

Grasping the opportunities of the payments revolution requires banks to assess the capabilities of their systems. Can a 20-year or older legacy processing platform deliver the new services and products your customers are demanding? Taking the first step on your innovation is as easy as getting in touch with the right provider.

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