In the era of digitalization, banking institutions are having trouble distinguishing among the various opportunities and priorities. The popularization of mobile and IoT payments signifies a need for banks to adopt efficient back-end infrastructure that would be flexible enough to accommodate different payment-enabled form factors. The latter include mobile devices, wearables, smart fridges and perhaps connected cars in the near future.

There are, however, difficulties in this process. Account personalization and open banking must be available on smartphones for consumers to use them and banks to generate revenues. Besides, tokenization must be implemented, in order to protect transactions and account data. Generally speaking, it is the legacy systems that are holding issuers back from adapting to the rapidly changing market conditions. Nearly two-thirds of banks believe that their payments infrastructure will have to be subject to a substantial upgrade in the next three years. This is due to back-office domain becoming the main part of banks’ digital strategy.

Issuers are spending a significant amount of resources in order to find the best solution for their bank and streamline the processes. But what should be the primary questions asked before launching the development of a card, mobile and IoT payments infrastructure strategy?

1. Outsource or in-house

• Are you capable of supporting the growing and evolving mobile and IoT payments ecosystem with the consumer management system in place?
• Is there a sufficient team of professional developers in this area at your disposal that will allow you to build and implement your own infrastructure?
• Will you be able to compensate the expenses soon enough?
• Are you confident in your technical ability and capacity to quickly create an infrastructure that enables scalable, value-added financial services that can be accessed on any connected device?

If the answer to all of the above is “yes”, it makes no sense to move away from an internal development and management of the infrastructure. On the other hand, if the answer is “no”, outsourcing is an attractive option.

2. Software-Only or full-service

• Do you need to launch the new products timely in order to acquire new profit sources?
• Do you need technical support in the development of new and innovative services?
• Do you require informed regional support and a collaborative development process with all of your personal needs taken into account?
• Do you want your users to enjoy a stable infrastructure with high availability?
• Would you prefer a lean fixed-cost setup?

If you have answered “yes” to any of the above, choosing a software-only provider will not guarantee you a successful implementation and management of card, mobile and IoT payments infrastructure.

3. Assessing a full-service provider

• Does the company have migration experience?
• Will you be able to adapt the offered solution to future consumer demands and new financial products?
• Is the onboarding process smooth enough to not cause any disruptions? Is there a way to mitigate possible risks?
• Is it possible to expand the solution so that it goes beyond consumer management services?

By following these simple steps and questions you should be able to get a better idea of how to follow the digitalization in the smartest way possible, avoiding any potential risks.