Modernising payments

In today's rapidly evolving financial landscape, the modernisation of payment systems has become a critical priority for financial institutions (FIs) and retailers worldwide.

The pressure to adapt to new payment alternatives, technologies, and customer expectations is immense. This comprehensive report by KPMG International delves into the strategies and trends shaping payment modernisation across the globe.

The report highlights the urgency of modernisation, with 93% of financial institutions and 87% of retailers either currently modernising their payments infrastructure or planning to do so within the next six to eight months.

Changing customer expectations, regulatory requirements, and the need to update legacy systems are the primary drivers for this transformation. Financial institutions are motivated by the need to enhance security, reduce costs, and improve transaction processing speeds, while retailers focus on competitive pressures and cost considerations.

Key insights from the report reveal that payment modernisation is not just about keeping pace with current trends but preparing for the future of commerce. The introduction of quantum computing, generative AI, and tokenisation suggests that the payments space will continue to evolve, presenting both challenges and opportunities. The report provides a detailed analysis of the progress made by FIs and retailers, the challenges they face, and the benefits they anticipate from modernisation efforts.

For financial institutions, the modernisation journey involves integrating new platforms into existing systems, which can be challenging and time-consuming. However, the benefits, including improved customer experiences, faster transaction processing, and long-term cost savings, make the effort worthwhile.

Retailers, on the other hand, are focused on implementing digital payment capabilities, adding new payment methods, and improving operational efficiency. The report emphasises the importance of a cohesive strategy to unlock opportunities, attract new consumers, and enhance engagement and loyalty.

The findings are based on a survey of 810 financial institutions and 690 retailers conducted by KPMG International in September 2024. The survey assessed current payment modernisation programs and progress, providing a snapshot of the global landscape.

The report also includes regional and country-level insights, offering precise data on the challenges and opportunities driving payment modernisation in different markets.

The report encourages financial institutions and retailers to embrace payment modernisation as a means to stay competitive and meet evolving customer demands.

It provides actionable insights and recommendations to help organisations navigate the complexities of payment modernisation and seize the opportunities that lie ahead.