For a software company like ACI, this means looking at industry trends and their impact on (our) customers. And for (our) customers, it means looking at macro-level industry trends and their impact on (their) customers. It then means building solutions and offering products that are of value to customers. It doesn’t sound like rocket science, but providing services that customers value, and are willing to pay for, has been incredibly difficult of late and let’s explore why.
1. Regulations – Regulations are typically viewed in a negative light. They cost money to adhere to and falling foul can be expensive from both a reputational and financial perspective. The benefits are sometimes unclear and driven by an agenda or in reaction to a crisis…while the time and money spent on being compliant is taken away from investing in the business. Do regulations harm the business? In this upcoming blog series, I will look at a few regulations in detail and highlight how they can be leveraged to improve the business and provide value to the consumers.
2. Escalation of IT costs – No matter the industry, legacy IT systems cost money to maintain. The payments industry is no different—in the face of unrelenting regulation and changing consumer dynamics, many institutions are shackled by legacy payment systems and archaic architectures that have evolved over decades of mergers and acquisitions, changing regulations, and new products and channels. A technical patchwork of monolithic applications and outdated architectures has generated numerous issues, including: inability to scale and enhance the system at speed, escalating costs of duplicate systems, costly to comply with regulations and missed opportunities by being slow. Next up, I will look at how enterprise payment systems and can provide value to the business.
3. Consumer expectations – Since the financial crises and resulting recessions, consumers have become increasingly more sophisticated with their finances. Subsequently, regulatory changes and new methods of communication have resulted in vocal dissatisfied consumers, which to no one’s surprise has caused customer attrition—consumers moving from one bank to another. In the midst of this chaos are institutions that are reactive to regulations and hamstrung by legacy IT; they’re unable to appease their discerning customer bases and/or offer value-producing services, a considerable dilemma, considering the importance of retaining and increasing customer relationships.
How can FIs turn this around and look for opportunity in this uncertain time? I will conclude this blog series by looking at ways financial institutions can provide value to the customers.
How to Expand Market Share and Start Improving Margin by Paul McMeekin
ACI Enterprise Payments Platform 
