Business & Investment

SCB’s new payment hub drives processing power and business growth

Along Janine Marie Chrisant

Siam Commercial Bank and its IT partner FIS have implemented a promising payment hub to increase processing power and shorten product development cycles. This initiative complies with the National Electronic Payments Roadmap promoted by the Thai Government and the Central Bank to promote the national digital economy.

The retail payments situation is constantly ripe for turmoil and innovation, not only due to the evolution of consumer behavior, but also due to regulatory reforms and the government’s agenda on financial inclusion and digital payments. This is especially common in emerging markets, where the population does not have a bank account and mobile penetration is high.

For example, the Thai government and the central bank have been promoting a nationwide digital economy since 2014 through the National E-payment Master Plan (NEMP). Prompt Pay was rolled out among banks in 2017 as a move to transform Thailand into a cashless economy. A mobile payment system that utilizes national IDs and mobile phones. The government has also launched a national program to promote point-of-sale (POS) installations, and central banks have introduced Quick Response (QR) code payment standards to promote interoperable payment infrastructure. ..

Thai banks have developed their respective digital strategies and built the infrastructure to support the national transformation to electronic payments. Siam Commercial Bank (SCB) is one of the banks that supports the digital movement. This bank is one of Thailand’s oldest and largest banks in assets, loans and deposits. SCB embarked on a journey to develop the latest digital payment systems that are part of the NEMP roadmap, with the aim of becoming one of the leading banks in the country.

Need to optimize operational and payment solutions

Banks will implement a future-proof real-time payment platform and address key business issues: limited system capacity to support customer real-time transactions and growing bank workloads, new initiatives And identified the time to market and the cost of the product. efficiency.

“The main goal of developing a payment hub is to drive innovative payments through application programming interfaces (APIs). Once we have a platform available, we can do more, not just from our side. You will be able to launch payment solutions, but you will be able to connect them with all the partners we have, which will allow you to leverage the existing assets created in your product development, thus costing you. “The time to market will be significantly reduced,” explains Trirat Suwanprateeb, SCB’s Chief Technical Officer.

Through the project, SCB can also increase the entry channels of banks by expanding the network of bank agents. The bank will allow merchants such as Seven-Eleven convenience stores and Big C superstores to act as agents, enabling SCB customers to perform real-time banking operations through these channels.

In addition, banks aim to strengthen compliance with international (ISO) and national regulatory requirements. The implementation of a real-time payment hub will allow banks to meet ISO 20022, Bank of Thailand regulations and timelines, and protect their market position in the process.

Leverage technology to build a real-time payment hub

SCB has partnered with FIS to implement an innovative payment hub platform with standard services to support customer processing and accelerate new product launches in the market. The bank initially considered another vendor for the project, but was unable to meet the bank’s needs due to delays. Therefore, the SCB has contracted with the FIS to turn things around and provide a payment hub within the agreed time frame.

FIS was chosen for its experience and expertise in building a successful real-time payment hub through technology solutions. The SCB also took great care of the technology vendor’s agility to quickly provide the FIS’s ability to execute, especially the ability to deliver projects on time.

SCB has achieved its transformational goals, modernized its system architecture and built new business capabilities. The project seamlessly integrated with the bank’s existing legacy system without the need for data migration.

Modular services and APIs enhance payment architecture

One of the distinguishing features of the project is the implementation approach of the Open Payment Framework (OPF) for deploying real-time payment hubs. The component-based architecture is designed to be scalable and secure to adapt to future growth needs. It is also designed to provide essential configurables for faster product implementation and faster turnaround times. It aims to optimize operations and achieve centralized payments by providing the operations team with a single view of customer transactions.

Banks have taken advantage of an innovative architecture that makes it easy to integrate new channels and payment types into standard service APIs. The payment hub exposes APIs to create and process a wide range of products such as customer credit transfers, customer debits, invoices, inquiries, and internal payments.

The payment hub supports services from a variety of SCB channels, facilitating end-to-end mapping in the payment chain and increasing support from automated testing tools. Payment services are developed as a collection of key business services that can be configured or turned on and off based on business use cases.

The FIS and SCB have continuously tested scalability and performance with each release. This allows the application to handle future demand.

Business goals achieved in three phases

The project is being implemented with a three-phase approach that will start in 2017 and end in December 2020. The 2019 phase began in January and has been successfully deployed nine times throughout the year. The project did not cause any time and cost overruns.

The solution includes customer channels (mobile apps and internet banking), automated channels (ATM, CDM, VTM), internal systems (money management systems and merchant channels), banking agents (7-Eleven outlets, Big C and AirPay), Partner institutions (Ripple and other partner banks), and bulk channels (payment file processing).

Payment Hub Transformation Delivery Journey

The software as a factory-like model was established on the basis of agile scrum by a small cross-functional team to continually provide banking initiatives and payment hub components. Parallel development under the “One Team” mindset created a monthly release or GoLive.

A daily risk assessment process was conducted to assess and mitigate risks such as quality issues, defects, scope changes, and priorities. Continuous automated testing and integration by vendors and planning of forward pipelines and backlogs by bank owners have made this project agile.

Major improvements were seen in many indicators

The implementation of the project has provided banks with the agility and ability to respond to growing consumer demand for real-time trading. Payment hubs have been scaled up from 80 transactions per second (TPS) to 1000 TPS for all payment types, including but not limited to ATM cardless cash, QR codes, cross-bank bill payments, and bill payment requests. It was. As a result, the bank reached a total of 9 million customers and recorded approximately 50 million transactions per month.

In addition, the project has led to significant business improvements, reducing the sales period for new products from eight weeks to four or five weeks. It reduces defects in production, improves software quality, and improves performance. In April 2020, SCB and convenience store giant Seven-Eleven first offered QR code deposits and withdrawals, with a 102% increase in monthly deposits at Seven-Eleven from April to June 2020.

Technology and regulation drive retail payment solutions

Payment is a rapidly evolving industry. It’s already saturated with banking and non-bank players, but there are still great opportunities, especially in populated markets without banks and cash-dependent economies. The long-standing increase in demand for innovative payment services may be due to the convergence of increased mobile usage and increased e-commerce. Successful implementation of successful retail payment technology does not depend solely on financial institutions. It is also achieved through regulatory initiatives that drive low-value, real-time payment solutions with agility, compliance and interoperability.

In Africa, companies have partnered with FinTech to leverage the country’s payment infrastructure to provide new real-time cross-border solutions. For example, Kenya’s Family Bank and SimbaPay have introduced an initiative to connect WeChat payment services in China with the M-Pesa ecosystem in Africa in real time. This has enabled an immediate remittance service between the two countries. The platform will allow SMEs without a bank account to purchase from China, facilitating trade.

In Sweden, consumers enjoy instant digital payments via Swish. Swish is a mobile payment app released in 2012 that enables real-time payments between banks. The 24-hour, 24/7 service works between Swedish banks through the private payment platform BiR, which is co-owned by the banks and affiliated with Riksbank. In April 2020, Riksbank also introduced a new service, RIX-INST, which allows real-time payments between banks. The private sector provides payment services to customers and Riksbank is responsible for the settlement of central bank money.

Meanwhile, Paytm in India has built an ecosystem through integrated apps for banking, investment and e-commerce. Paytm leveraged the Government’s Unified Payment Interface (UPI) to facilitate the adoption of immediate payments in the country. Today, it is a major contributor to UPI payments in India and the largest platform for remittances. Implement API-driven solutions to form strategic partnerships with other financial services players and enable them to add services to their existing digital wallets.

The Industrial and Commercial Bank of China (ICBC) is leveraging APIs to enhance its payment platform. ICBC’s e-Wallet is a scenario-based personal financial integrated services solution based on the API open platform. We have established an ecosystem for internal and external partners through an open service-oriented application development platform. ICBC’s special products such as electronic letters, electronic payments, electronic corporate payments, and bulk payments are open to the public.

SCB was one of the early adopters to provide payment solutions in response to the Bank of Thailand’s national electronic payment roadmap. Through this payment hub, banks have modernized their architecture and laid the foundation for future innovation. It’s interesting to see how SCB extends this platform further in building a larger payment ecosystem as well as providing real-time payment solutions.

keyword: Electronic payment, Digital payment, Mobile banking, digitalization, Financial inclusion, Cashless

Electronic payments, digital payments, mobile banking, digitization, financial inclusion, cashless

organ: Siam Commercial Bank, FIS

SCB’s new payment hub drives processing power and business growth SCB’s new payment hub drives processing power and business growth

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