Cloud technology is important for improving accessibility and driving innovation. It empowers financial institutions (FIs) to expand their operations, tap into advanced data analytics, and swiftly implement new payments solutions. Moreover, cloud-based infrastructure is versatile and efficient, making it vital for payments modernization endeavors.

This white paper, commissioned by HPS, underscores the importance of cloud-native architecture to payments processing. The key findings from this paper follow:

• FIs are looking for Software-as-a-Service (SaaS) as an alternative to in-house processing: SaaS offerings allow FIs to use payments processing software without owning the underlying technology. SaaS can reduce time to market and offer FIs stronger payments capabilities.

• FIs must choose cloud-native solutions to benefit from the cloud: Only a cloud- native solution (as opposed to a modified “cloud-ready” product) will truly deliver the scalability, modernization, and flexibility of the cloud.

• Modern payments software platforms should follow a cloud-native architecture: Cloud nativity is the foundation for highly scalable, performant, and manageable applications. Cloud-native platforms can take advantage of all the resources and services offered by hyperscale cloud providers.

Datos Insights’ research shows that FIs need their vendors to provide modern technology stacks, including cloud-native architecture. Many established players have recognized the need for a cloud-native architecture. Frequently, they have created a roadmap to get there but have not yet completed it. Modern fintech vendors offer cloud-native support, but they lack the scope, resilience, and service organization necessary to support large FIs. There is a happy medium in providers such as HPS, which are more established and broader in scope than fintech startups but have the original, cloud-native technology to provide FIs with the advantages of cloud.