In our CEP Outlook for 2021 we discussed the major themes for success going forward as corporate banks figure out their technology situation in terms of how much and how fast to modernize. One of the four main themes is Platform Banking, which has as its subsidiaries things like moving to the cloud, flexibility and opex versus capex.
This referenced announcement in Cision PR Newswire is yet another step in the direction of cloud delivery in financial services, something that was not so popular until recent events started rapidly changing C level viewpoints. IBM has acquired Montreal-based Expertus Technologies Inc., a tech company that provides payments and cash management solutions. Through the cloud for financial services and other corporate verticals. Terms of the deal were not disclosed.
“‘Financial institutions must balance greater demand for secure digital solutions while complying with rapidly evolving regulation,’ said Mark Foster, Senior Vice President, IBM Services. ‘Expertus’ payment-as-a-service solution expands our hybrid cloud-based payments offerings, transforming payments and treasury management with AI to give financial institutions the flexibility to rapidly innovate and stay competitive as consumer demands evolve.’…Expertus is a pioneer in cloud solutions for the financial services industry. More than 1,000 entities including banks, credit unions, regulatory agencies and corporates around the globe process an average of over $50 billion daily on its payments platform. Expertus is also one of the largest North American services bureaus of the Society for Worldwide Interbank Financial Transactions (SWIFT), the vast network used by banks and other financial institutions to manage money transfers and treasury transactions.“
In our Outlook we discuss the digital modernization movement for payments and general banking infrastructure, with a heavy emphasis on cloud. Many of the largest banks have their own private clouds, an IT processing model that provides greater operational control but reduces the overall potential for cost savings that are available in public cloud services. Some utilize hybrids, with public cloud for development agility and private versions for systems operations.
Financial institutions have been generally conservative about utilizing cloud, especially public cloud, but this is changing. Mercator believes that there will be substantial movement to the cloud among financial institutions of all sizes in 2021. The migration will also include public cloud. Banks see a need for adoption as they notice expansion of the open banking environment, digital bank competitors, speed of change, and need for cost efficiencies. Cloud technology directly supports this growing platform environment. So this IBM move is another clear indicator of this transforming environment.
“‘IBM and Expertus’ long-standing partnership is a great foundation upon which to deepen our relationship,’ added Leblanc. ‘As a home-grown Montréal company, we are proud to bring our offering as well as our commitment to customers to a new level and to a broader market.’…Expertus is now part of IBM Global Business Services, following its previous successful alliance with IBM Payments Center Canada. IBM will consolidate Expertus’ Payments Platform as a Service offering and build on SWIFT processing services and capabilities, which enable a global network of 11,000 financial institutions in more than 200 countries to send and receive information about financial transactions.“
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
