Mobile Payments: What Banks Need to Survive and Thrive

Understanding the Digital Payments Landscape 

In today's rapidly evolving financial landscape, the imperative for banking modernisation has never been clearer. Mobile payments have evolved from being merely an alternative to becoming the standard choice for consumers worldwide. The shift from swiping cards to effortlessly tapping smartphones exemplifies the transformation underway in digital payments. 

Cashless methods, such as mobile payments, generate satisfaction among users, leading to a surge in adoption rates. 

As we navigate these evolving trends, the horizon of digital payments is further expanded by the potential introduction of the Digital Euro — a central bank digital currency (CBDC) currently under consideration. Such a development could significantly amplify reliance on digital wallets, positioning them as integral components of European financial transactions. Other cross border initiatives such as European Payment Initiative (EPI) and local schemes directly interoperating with each other further expand the relevance and the reach of mobile payments.  

'Having a European Digital Wallet, to identify European citizens across borders, will be the missing piece to boost this ecosystem and cross borders payments,’ emphasises Luís Gaspar, Critical’s Digital Business Transformation Director. 

The realisation of the Digital Euro could be a pivotal milestone in digital payments: the convergence of digital currencies and physical cash money.  

This shift is empowered by the emergence of embedded finance, where financial services seamlessly integrate into broader digital ecosystems. This integration enhances user experience and broadens the scope of mobile transactions, blurring the lines between traditional banking and digital innovation. How? By enabling cross-selling solutions and offering complementary services, embedded finance creates an interconnected financial ecosystem. For instance, personal financial management tools can help users track and optimise their spending or even provide lending solutions for their needs. 

Given these developments, it becomes imperative for financial institutions to focus keenly on the future. The question at hand transcends mere technological readiness—it's about strategic alignment. Does your banking infrastructure align with the evolving landscape? Is it poised to meet the demands of the next generation of payment solutions?  

‘Embracing a modernisation strategy is imperative and it’s not just about keeping pace. Progressive technological modernisation is essential for maintaining relevance and seizing new opportunities for growth and innovation in the era of digital payments’ according to Patrick Machado, Critical’s Principal Engineer for Digital Engineering Services. 

Challenges and Opportunities for Banks in Embracing Mobile Payments 

With the rise of mobile payment adoption, this moment is pivotal for banks and their digital transformation journey.  

Modern customers demand instant gratification, and with that comes numerous technical challenges that banks must navigate to remain competitive. But fear not: while these challenges may seem intimidating, they are important steps on the road towards digital modernisation. 

Alongside the technical hurdles of mobile payment integration, banks also face organisational challenges requiring careful navigation and strategic planning. Here are some of the key technical and organisational challenges faced by banks: 

• Banks need to anticipate an increased transaction volume. 
• Legacy systems struggle to meet modern speed expectations. 
• Banks operating with monolithic systems face challenges of adaptability and scalability. 
• Compliance strategies needed to stay up-to-date with regulatory changes can be costly. 
• Banks need to streamline and foster collaboration to overcome organisational complexity. 
• Learn more about these obstacles and more in our free white paper.  

How to Build a Winning Digital Payments Strategy with Critical Software 

As the landscape of digital payments continues to evolve, banks must adapt and innovate at a rapid pace. At Critical Software, we've been at the forefront of helping banks navigate the complex challenges of modernisation, spanning both technological and organisational domains. 

Our partnerships with leading financial institutions stand as testament to our commitment and proficiency across various critical domains: 

• Digital Strategy: Our holistic approach merges business, technology, and people to facilitate a seamless transformation in core banking modernisation. 
• Legacy Systems Insight: Our teams dissect and remaps outdated technologies (particularly prevalent in core banking systems systems) and legacy systems. You can expect a solution to tackle this legacy’s limitations. 
• Adaptation and Evolution: We don't merely retrofit old systems; we re-engineer them to align with cutting-edge technologies and contemporary engineering paradigms. 
• Agile Enablement: We accelerate development lifecycles by transforming complex waterfall processes into agile methodologies, allowing us to adapt to different contexts. Working in a multi-provider ecosystem, ensures a cohesive and global transformation roadmap. 

Choosing Critical Software as your strategic partner is the key not only to your institution’s survival, but to ensuring it thrives in the next generation of payments solutions.  

Download our free white paper on ‘Transforming Banking from Mobile Payments to Core Modernisation’ now.