Volante Technologies Reveals Record Investments in Payments Modernization for Mid-Tier Banks

Record Investments in Payments Modernization

Volante Technologies, a leading provider of Payments as a Service (PaaS), has unveiled its fourth annual report focusing on the mid-tier banking sector. Conducted in partnership with Datos Insights, this report sheds light on the current trends, challenges, and opportunities that mid-tier banks face in their quest to modernize payment infrastructures amidst growing customer demands.

The report is based on insights from over 1,250 banking executives worldwide and identifies crucial dynamics shaping the future of payments. Mid-tier banks, classified as institutions holding assets between $3 billion and $100 billion, are uniquely positioned to capitalize on these opportunities. With customers increasingly favoring real-time payment methods, compliance with the ISO 20022 standard, and the implementation of cloud-based technologies, the findings of this survey are timely and critical.

Key Trends in Payments Modernization

1. Increasing Demand for Real-Time Payments: One of the most striking revelations from the report is that 59% of mid-tier bank customers expect to increase their usage of real-time payment systems within the next year. This illustrates a significant shift in customer expectations toward instantaneous transaction capabilities.

2. Prioritization of ISO 20022: The report also highlights that 62% of respondents either currently utilize or plan to adopt ISO 20022. This standard is essential for enhancing data capabilities linked to payment processes, further showcasing its strategic significance in payments modernization.

3. Significant Investment Plans: Mid-tier banks are making substantial commitments to advance their payment technologies, planning investments ranging from $5 million to $20 million. The commitment to modernization is evident, with 76% of banks intending moderate investment levels and another 24% showing intentions for significant investments.

Despite these ambitious goals, the report indicates a gap in the execution of modernization plans. Many executives report that their institutions struggle with maintaining focus and momentum, which highlights the need for effective partnerships and technology strategies to realize these goals.

Embracing Cloud and PaaS Solutions

The role of cloud technology and PaaS in fintech innovation cannot be overstated. The data shows a clear preference among banks for cloud-native, modular solutions capable of seamless integration, reducing time and costs associated with implementation. Respondents indicated that these solutions not only enhance operational efficiency but also deliver real-time visibility into payment flows and optimize key processes.

Erika Bauman from Datos Insights commented that mid-tier banks have a unique opportunity to transform their positioning, tapping into their flexibility to meet the evolving needs of corporate clients. As demands for instant payments and compliance grow, these banks are equipped to deliver specialized, agile, and customer-centric services.

The Urgency for Modernization

As Deepak Gupta, EVP of Volante Technologies, aptly states, the current landscape underscores the urgency for modernizing payment systems. With the rapid adoption of platforms like FedNow® and RTP® in the U.S. — along with the impending migration to ISO 20022 — mid-tier banks that fail to invest in modernization will risk falling behind their larger counterparts.

Conclusion: A Bright Future for Mid-Tier Banks

Volante Technologies remains committed to empowering its partners through advanced technology solutions aimed at enhancing payment capabilities. With its Payments Intelligence offering, the company is dedicated to helping mid-tier banks innovate and grow in today's competitive financial environment.

The significance of this report cannot be underestimated. As mid-tier banks seek to innovate and evolve, it is clearer than ever that the focus on payments modernization and strategic investments are key to achieving a competitive edge in the financial industry.