- Mid-tier banks plan significant investments in payment modernisation, focusing on real-time capabilities.
- The report highlights the strategic importance of ISO 20022 compliance and cloud solutions in enhancing payment systems.
What happened: Mid-tier banks prioritise payment modernisation strategies
Volante Technologies, the global leader in Payments as a Service (PaaS), releases its fourth annual survey focusing on mid-tier banks. Conducted in collaboration with Datos Insights, the report highlights how these financial institutions can accelerate payments modernisation to meet evolving customer demands and maintain competitiveness within the fast-paced financial landscape. With insights gathered from over 1,250 global banking leaders, the survey identifies critical trends that are shaping the future of payments for mid-tier banks, defined as those with assets between $3 billion and $100 billion.
Key findings reveal that mid-tier banks are increasingly investing in real-time payments, ISO 20022 compliance, and cloud-based PaaS solutions. In response to growing customer expectations for instant payments and enhanced data transparency, these institutions plan to allocate significant resources towards modernising their payment infrastructures. Erika Bauman, Director of Commercial Banking & Payments Practice at Datos Insights, notes, “Mid-tier banks have the flexibility and resources to modernise, providing specialised, agile, and client-focused services in payments.”
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Why it’s important
The report underscores a rising demand for real-time payments, with 59% of mid-tier bank clients expecting to increase their usage within the next year. Additionally, 62% of respondents already utilise or plan to adopt ISO 20022, highlighting its strategic importance for improved data capabilities. Mid-tier banks indicate planned investments ranging from $5 million to $20 million in enhanced payments technology, with 76% reporting moderate investments and 24% significant investments.
Despite clear intentions for digital transformation, the survey reveals that execution often remains unfocused or delayed, indicating a need for effective technologies and partnerships. Cloud and PaaS solutions are identified as key enablers of this transformation, allowing mid-tier banks to modernise operations, streamline compliance, and lower costs. Respondents favour cloud-native, modular solutions for their ability to support seamless integration and facilitate real-time visibility into payment flows.
Deepak Gupta, EVP of Product, Engineering, & Services at Volante Technologies, states, “Investing in payments modernisation is no longer optional for mid-tier banks seeking to remain competitive.” The rapid adoption of FedNow® and the RTP® network, along with the upcoming Fedwire ISO 20022 migration, accentuates the urgency for these institutions to modernise. Gupta concludes, “Cloud and PaaS will be game-changers for mid-tier financial institutions, enabling them to offer specialised services and unlock new revenue streams.”
