San Francisco, CA, USA
May 9, 2008

Enterprise Payment Management: Banks Must Follow an Enterprise Approach to Payments to Compete and Lead

Table of Contents

Return to report Abstract

Executive Summary 3
The Calm Before the Storm 7
  The Need for a Cohesive Payments Strategy Will Vary 7
  Taking a Weather Reading of the Payments Franchise 8
Signs of Bad Weather Ahead 11
  Growing Volume and Evolving Payment Mix Create Opportunities and Challenges 12
  Regulation's Impact on the Payments Franchise Will Drive Strategic Thinking 12
  Wholesale Discounts on Cross-Sell Expectations Require Closer Scrutiny 15
  Price Pressure and Increasing Quality Expectations Demand New Payments Strategy 16
  Pressures on Card Revenues Reinforce Banks' Need to Diversify 17
  Product Innovation Will Make and Break Industry Stakeholders 18
  Consolidation Creates Opportunity and Threat 19
  Globalization Will Change the Competitive Landscape Forever 20
  Merchants Frustrated and Stronger 22
The Perfect Storm 25
  Scale Even More Important 25
  Scale Players Set to Accelerate Competition 26
  Banks Without Scale Must Find New Ways to Differentiate 26
  All Banks Required to Increase Investments in Security 26
  The Changing Market Will Force Stakeholders to Rethink the Value of Payments Outsourcing 27
  The Storm Will Determine Future Market Participants 28
Weathering the Storm  30
  Enterprise Management Must Become the New Baseline 30
  Technology Must Drive Efficiency While Supporting the Flexibility to Lead 33
  Shared Services Are Key to Enterprise Philosophy 34
  Visions of Utopia Should Guide, Not Dissuade 36
Lessons Learned: Preparing for the Storms Ahead 38
  Address Business Governance and Fast Track a Path to Success 38
  Understand the Bank's Payment Business Before Making Changes 39
  Debate and Debate, But Agree on One Future 39
  Lay Out Vision and Strategies to the One Future Landscape 39
  Create an Achievable Execution Plan 39
  Monitor, Assess, and Adapt the Plan 40
  Develop a Payments P&L to Create Visibility 40
  Detail What Isn't Being Done to Avoid Scope Creep 40
  Contingency Plan 41
Conclusion 44
 

About Celent

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

New York - Dana Lautin
dlautin@celent.com
Tel.: +1 646 364 8254

Paris - Muriel de Munck
mdemunck@celent.com
Tel.: +33 1 42 61 06 88

Tokyo - KyongSun Kong
kkong@celent.com
Tel.: +81 3 3571 7104