The payments challenges facing banks are a combination of regulatory change and the gradual obsolescence of legacy infrastructures, leading to a situation where the existing solutions are no longer fit for purpose. These challenges can generally be distilled into separate but inter-related areas.

Faster Payments and SEPA

Amid a raft of regulatory changes, Faster Payments regime associated with the introduction of the Single Euro Payments Area (Sepa) presents banks with challenging timetables with fundamental implications across all systems and processes.

Banks need low-risk, cost-effective solutions to meet the business and technical requirements set out by the European Payments Council. The latest information is available at www.europeanpaymentscouncil.eu/knowledge_bank_detail.cfm?documents_id=74.

The Oracle Faster Payments Gateway has been built to leverage the proven Oracle i-flex platform and VocaLink switch and dashboard technology. For an outline of this solution see Faster payments and Sepa - a banking solution based on a proven platform.

ATM and POS Repacement

Another key payments challenge has been rumbling on for a decade. Most bank payment systems via ATM or POS terminals are now well over 10 years old and the technology reflects this, resulting in high costs for support and maintenance. Making changes to improve the efficiency, speed and transparency of payments and settlement, and to integrate these changes within larger core banking development programs, is very expensive, and the necessary skills are now scarce.

This is particularly the case because most banks' ATM and POS systems rely on proprietary hardware, which will not easily fit into wider consolidation programs.

A solution to the ATM and POS replacement challenge is fault-tolerant, scalable, adaptable ATM and POS replacement, which is offered by Oracle and partner Distra, with new software to embed fault tolerance during switching programs and provide rapid reductions in TCO.

Real Time Information

The same partnership addresses the need for real-time information management to enable banks to support multiple gateways connecting to different payment networks for both domestic and international payments. These gateways are set to change, so having the system and management agility to adapt to new business rules and processes is vital. Creating a single point of connection to external gateways will greatly improve the ability to integrate new gateways in the future, with clear cost and performance benefits.

It also provides for a single point of information regarding payments entering or leaving the bank. The result is considerable enhancement of real-time payments information management.

Corporate to Bank Connectivity

SWIFTNet Phase 2 migration is another mandatory issue for banks, which combined with Sepa compliance poses unique challenges for European banks.

i-flex SWIFTNet solutions enable banks to simplify the complicated process of SWIFTNet migration and align with key trends in the development of SWIFTNet services.

They also allow banks to provide better information and more responsive payment services to corporate customers. The whole issue of Corporate/Bank relationships is highly dependent on changing the payments process in line with companies' changing expectations.

As a recent Financial Insights/IDC report comments: "Locking customers into proprietary interfaces and front-end systems will no longer be viable as banks seek to move beyond simple payment processing into helping businesses integrate their financial supply chains."

Oracle has developed a corporate to bank solution - Financial Gateway - that helps all parties achieve their aims. The next step in corporate to bank connectivity looks at how it offer banks new revenue opportunities through providing a single payments hub to multi-banked corporates.

Oracle Payments Architecture provides the underpinning for managing all these issues, and with our partners we can provide a total payments solution fit for purpose now and into the future.