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How multi-cloud supports operational resilience in payments
Blog· 3min November 5, 2024
In today’s 24/7, always-on business culture, consumers demand that critical payments infrastructure is fit-for-purpose. We live in a world where we expect banking transactions to be seamless and fast, especially as we balance the management of both our professional and private lives on the move.
If, unfortunately, payments systems do go down, this can have a big impact on consumers, whether that means they are unable to pay their mortgage, buy the groceries or deal with even more extreme situations, like paying for hospital bills when abroad.
Fortunately, banks and payment service providers (PSPs) have safeguards in place so that breakdowns in payment processing doesn’t occur too often. Key to this is ensuring that payments infrastructure has strong operational resilience measures - the ability for banks and PSPs to provide a service to their customers, despite or in the event or adverse incidents such as an outage of a technology solution. It's making sure that banks can cope with all different types of disaster recovery scenarios - and remain operational for their customers.
So what in turn supports operational resiliency in payments to avoid such outages? We would argue that fundamental to this is using a multi-cloud solution for payments, as this has many benefits including better resiliency and the flexibility to adapt to a changing payments regulation landscape.
How does multi-cloud support operational resilience in payments?
A key benefit for banks and PSPs using multi-cloud is better resilience in redundancy and failover. If for example you're using multiple cloud providers, such as Amazon Web Services, Google Cloud Platform or Microsoft Azure,1 an outage experienced by one cloud provider shouldn't impact the overall service – so banks can meet their high-level operational resilience targets.
Secondly, the issue of concentration risk is mitigated with a multi-cloud strategy. You're not relying on a single cloud vendor; you're not relying or depend on their organisation, their technical failures, or their exposure to vulnerabilities. In short, multi-cloud can survive a cloud region failure or full cloud provider outage, while also overcoming the concentration risk of having a high volume of payments going through just one provider.
In addition, multi-cloud is very useful in tackling risks associated with using critical third party support for payments, as highlighted by the Financial Conduct Authority’s (FCA) CP23/30 paper on operational resilience. Should there be any third party problems, multi-cloud offers banks and PSPs an alternative desktop exit strategy, as they are able to exit from and replace a cloud provider while maintaining service.
Linked to third-party support, a multi-cloud approach to payments can also handle current and future industry changes regulations such as FedNow, NPA, and SEPA developments.
As well as the benefits listed above, a multi-cloud approach leads to a better level of service for consumers customers, as payment processing becomes more resilient, should any outages occur, minimising real world impact.
Finally, multi-cloud forces users to adopt an agnostic approach to architecture. When you go down the multi-cloud route, you tend not to use vendor technology that's non-transferable, so that does allow you to make better business decisions; you can move vendor without having to completely rearchitect your application, saving time and money.
How should banks implement a multi-cloud set up to support operational resilience in payments?
The key advice here is to research and find a technology partner that offers a fully-managed multi-cloud service. Banks and PSPs need to be confident that they've found a tech provider with a proven pedigree in the market.
In addition, we would argue that cloud-agnostic technologies are useful in supporting operational resilience in payments, as this approach avoids a hard reliance on proprietary cloud-specific services. This removes the dependency on any single cloud provider. Key benefits of this approach are firstly that the same code base can run in and across cloud providers, reducing the overhead of maintaining and updating services. Secondly, this approach reduces the complexity of exiting any one of the cloud providers and replacing it with another.
What’s the future of multi-cloud in operational resilience in payments?
With a combination of payment regulators wanting to make it easier for financial institutions to offer real-time payments, and customers and society expecting this, the demand for resilient payments processing will only continue to increase. This was evidenced recently by Pay.UK data stating that Single Immediate Payments increased by 14.2% in volume this year compared to 2023.
Key to handling this increase in payments is to have a fully-managed cloud service that is resilient, robust and ready for new regulations. Fundamental to achieving this challenge will be payments processed by better operational resilience – and the obvious way to boost this activity is via a multi-cloud solution.
This is a joint blog post from Mehret Habteab, SVP, Products and Solutions at Visa Europe and Eimear O'Connor, Chief Product Officer at Form3.
Written by
Eimear is Form3’s Chief Product Officer with responsibility for product strategy, development and management. She joined Form3 as Chief Operating Officer in 2017, managing all aspects of business and service operations. Eimear has worked and consulted within financial services organisations on strategy, product and operations for over 20 years. She joined from Barclays where she was Retail and Commercial Product Director for Pingit, responsible for the global development and commercial management of the retail customer base for this award-winning open market payments platform.
Prior to this, Eimear led the Corporate Mobile Payments Product Team at Barclays where she was responsible for the product design, development and launch of the Barclays Pingit for corporates product set. She has also held positions including Vice President of Strategy at Visa Europe and Business Consultant at both BearingPoint and Capco, working on multiple assignments in the UK and globally.
Written by
Mehret leads the Product & Solutions function at Visa Europe. She joined Visa in 2019 and prior to her current role has led Real Time Payments, Risk, Authentication, Digital, and Acceptance product and solutions teams. Prior to joining Visa, she served at the Bank of England and Financial Services Authority leading regulatory reform programs including their Real Time Gross Settlement payments transformation initiative. Mehret began her career at Barclays where she was responsible for bringing personalized credit offers, instant account opening and authentication to the retail bank’s digital channels.