The Market Challenge

The payments industry is in the midst of huge change, driving considerable acceleration in IT investment. The need to deliver on growing customer expectations and regulatory-driven infrastructure and competition initiatives is driving institutions to create the capabilities for rapid innovation in their offerings for corporate, retail, and SME customers. Open banking and immediate payments, are the most important catalysts for change, with many institutions now looking to develop significant new capabilities across the middle and back office to support the future of their customer facing offering. Distributed ledger technology and blockchain continues to prove its worth in niche areas, and will become a more important part of serious discussions about the future of certain areas of market infrastructure in particular. However, it is the opportunities that open APIs present to deliver entirely new products, services, and business models is the area that will dominate investment priorities in 2018.

How Ovum Helps You

Maximise your market impact, by using Ovum’s independent research to understand exactly what is driving payments IT investment agendas at a country and regional level

Benchmark against your competition, with independent verification of the market leaders, challengers and followers in Ovum’s Decision Matrix series

Stay ahead of the competition, by understanding where and how new entrants, digital service providers and established vendors are bringing new products and services to market

“Total IT spending on payments-related software and services will reach $56 billion in 2021”

Key Deliverables

ICT Enterprise Insights – Global survey of payment provider pain points and IT buying intentions for 2018-19

ICT Spending Forecasts – Global 5 year projections for payments IT spending, segmented by country, source and line of business

Ovum Decision Matrix – Analysis of the leading vendors solutions in key areas, including card management platforms, white label digital wallets, and payment switch

Themes for 2018

Payments and Open Banking: Gateway to the future value chain
With institutions in all territories now actively formulating their open API strategies (the majority regulator-driven), the focus is turning to what this will mean for industry. In the short term, implementation strategy, service innovation (both in retail and corporate), security, data protection and standards are key issues, and will drive the majority of investment decisions. However more essential questions remain, most critically around what open banking really means for revenues, the value chain and future role of banks within it.


Infrastructure to Innovation: Investing to deliver the next generation of payment services
Growing complexity in the payments industry will increasingly require modern, flexible underlying systems and architecture to support growth. In addition to the investment needed to deliver against customer expectations for real-time and digital first services, major initiatives such as immediate/real-time payments and steady growth in the development of blockchain/distributed ledger technology across correspondent banking and trade finance in particular will be key drivers of activity.


Identity, security and payment fraud threat: Finding opportunities in risk mitigation
Managing the risks around fraud and financial crime are core to the business model, but the evolving nature of the threat and growing challenge of cyber-security put these high on the industry agenda. In retail payments, the need to balance risk against the customer experience means that biometric authentication, artificial intelligence, predictive analytics, and the technologies like 3D Secure 2.0 will prove critical. At the same time, interest in supporting digital identity assurance will provide clear opportunities to provide new solutions to customers.


Reducing frictions and driving transactions: The changing role of payments in an omnichannel world
With the customer experience now the focal point for innovation, if not outright survival in many merchant segments, payments has a key role to play in how businesses of all types interact with their customers. Merchants will increasingly demand payment services that can be seamlessly embedded within any number of commerce experiences, devices and contexts. For the industry, the need to support this diversity of options will require new thinking and particularly around security. Developments in high growth markets such as China and India will provide important lessons for the rest of the world.


Analyzing global services contracts
We track the evolution of ICT managed services as these expand to include applications services and performance management, and cloud-based service delivery. Ovum maintains an IT services contracts database (ITSCA) as well as uniquely monitoring global services deals from telcos. Together, these provide the most comprehensive picture of the changing shape of the deal in enterprise managed services, in region and globally.

What’s New

Payments Software Contracts Analytics – Global analysis of packaged software deals, segmented by institution, vendor and solution area

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