A majority (65 per cent) of banks believe their payments infrastructure will need a significant upgrade in the next three years, while almost three-quarters of banks in the Asia-Pacific region fully expect to replace or renew their payments systems by 2021.
These are the findings of a report produced by research and consulting firm Ovum in conjunction with Temenos, a banking software company. Their analysis was based on interviews and surveys with experienced payments leaders.
The report singles out banks in Asia-Pacific as needing to move with greater urgency than their peers in Europe and the Americas.
The looming pressure from "new infrastructures, such as the recent Hong Kong Faster Payments System, Australia's New Payment Platform and plans for a pan-ASEAN payments infrastructure were cited as "important catalysts" for a faster business case process.
David Bannister, principal analyst at Ovum said: "To meet the growing challenges, banks must avoid a quick fix to regulatory issues and instead must think long term and build holistic, flexible investment cases that address a range of business priorities."
Some banks are apparently comfortable with the concept.
"With our digitisation strategy, we are seeing more and more opportunities open up, none of which would have been part of a business case for making the platform investment, but if we hadn't made that investment we would certainly be missing out," was one comment attributed to Alan Lin, global head of cash, transaction banking, at Standard Chartered Bank.
Nevertheless, as the report acknowledges, a payment systems investment case must compete with others across the organisation, as IT resources are necessarily focused on regulatory requirements and other areas relating to a bank's ability to continue trading.
Australia's larger banks (more than others) have a mixed record in executing technology transformation projects, especially those with a payments flavour.
In payments, one industry collaboration from the past decade has renovated Eftpos and built a hub with (so far) a record of near perfect reliability.
The more recent - and more critical - endeavour to introduce real time payments as a commodity experience has shown the incoherent and incompetent side of Australia's banking sector. Banking Day reports today from Sibos on NPP Australia's assessment of the state of play with the New Payments Platform.
"The prioritisation of competing projects always presents challenges," said Leigh Mahoney, head of wholesale digital at ANZ, one of the bank executives interviewed for the report. The same term was used by ANZ's CEO at Sibos yesterday.
Shrey Rastogi, payments strategist at Temenos, said: "This report echoes what we are hearing from our payment hub and instant payment clients: Digital is the new norm, and capabilities such as open APIs and instant payments - in under five seconds - are no longer differentiators, they are now expected."