An architect’s view on payments transformation with IPF

Matthias Lossek, one of Icon’s solutions architects reflects on the payments transformation journey with IPF, and the wisdom of embracing change.

When I started my career in the financial services industry, on one of my first days at work I did what probably most juniors do during their first days: I changed my Windows XP wallpaper to something cool.

My wallpaper showed a quote of the 13th century Persian poet Rumi, next to an old man with grey beard sitting in the lotus position. The quote said: “Yesterday I was clever, so I wanted to change the world. Today I am wise, so I am changing myself.” I’m leaving the interpretation open, how cool that really was.

While writing this blog post on IPF and embracing change, I decided, it might be time for a new wallpaper, but with a slight twist on Rumi’s quote. My wallpaper now reads: “Yesterday’s payments platform was clever, so it wanted to change your bank. Today’s payments platform is wise, so it is changing itself.”

Probably still lame, but let me explain.

Yesterday we were clever

Before joining Icon Solutions’ IPF Team, I spent a decade as a solution architecture consultant in the financial services industry. During this time, my teams split banks, merged banks and advised on how to fix banks.

If I’ve learnt one thing during this time about large transformation projects, then it is that things change. Always.

Requirements change from one day to the other. Regulation gets stricter. Compliance and security teams object decisions and all the hard work that was put into the solution design needs to be revisited.

Legacy systems are the best showcase for what happens when change is too fast, and a platform is not fit for purpose anymore. Technology becomes the blocker of the evolution of the business. Technology stopped embracing change and can’t adapt (enough). New requirements simply outgrew the boundary of what they can do with the legacy system.

In the payments industry, the shift to instant payments is a true disruptor that exposes the lack of adaptability of legacy platforms to cater for new requirements. Requirements nobody thought of, when the old systems were designed. But facing reality, even without instant payments, legacy payment platforms in many financial institutions were more of a blocker than an enabler of the business. The need for change was ignored for too long, the world started to spin too quickly.

Now is the time to be wiser

As an architect – no matter if enterprise, solution or technical architect – embracing change and keeping an open mind towards changing requirements is key for success. When designing a system, the goal is to postpone irreversible decisions as long as possible, ideally avoiding them entirely. Keep yourself flexible!

This is especially true in the world of payments. Payment platforms are subject to constant change. New industry trends, regulatory requirements or simply new functional use cases are a constant driver for change.

A modern payment platform needs to act as an enabler for the business and provide the flexibility to cater for new requirements on short notice. The business should be in control.

Unfortunately, classic payment solutions products often lock their clients in and set strict boundaries of what is possible and what is not. Highly opinionated solutions dictate to their users what their world of payments has to look like.

This is contradicting our architectural principle of postponing or even avoiding irreversible decisions. The vendor selection is a lock-in into the vendor’s opinionated world. If that world doesn’t fit the bank’s world anymore, another large transformation project is required.

To achieve more flexibility, financial institutions can also build their payments platform in-house from scratch. But the complexity is high and skilled IT experts are rare. Non-functional groundwork must be established first and resiliency patterns integrated into the core architecture of the in-house solution. And this all needs to be done before a single end-to-end payment flow can be implemented. A lot of resources need to be dedicated to technology enablement, rather than creating true business value.

This is where IPF comes into play

IPF was designed to be unopinionated and flexible. We don’t dictate to our clients how their payments world has to be. We truly believe our clients know better than us how their business flows and data model should look like.

We see our task in providing our clients with a framework that acts as an accelerator, so our clients can build out their payments world themselves – exactly how they want their world to be. We stick to what we do best: We build the technical foundation and core components for a resilient and scalable platform. Our clients can focus on the functional aspects of their new payments system.

The outcome feels like an in-house solution – in fact, it is – but based on a framework specially designed to accelerate payment transformations.

We also offer a set of optional off-the-shelf modules that our clients can chose to use to simplify their payments transformation journey even further. And here again we ensure that customisation and configuration can tailor the system towards our clients’ needs.

With my architect hat on, currently working for an IPF client implementation, I believe IPF is this sweet spot between a vendor product that gives me a ready-made solution and the flexibility of in-house development. I can rely on IPF’s flexibility, adaptability and robustness. IPF eases my architecture mind, because I can avoid irreversible decisions and calmly embrace change. IPF enables me to provide options to my client, now and in the future – very valuable when supporting the client on their payments transformation journey.

How do I return from payments transformation back to our Persian poet Rumi in lotus position?

I like the analogy of IPF being a wise man who has learnt that embracing change is the secret to success: Don’t impose yourself on others, instead, be willing to adapt to your environment. Even if you are a payments system.

If you would like to find out more about IPF, get in touch today.