Some 79% of European banks are currently in the process of migrating cards platforms according to the 4th annual cards migration report published by TietoEVRY. The research assesses the state of migration to new cards platforms among banks in Europe and this year’s figure is significantly up from 60% just two years ago.
4th annual cards migration report – other key takeaways
- A majority of banks (56%) currently in the migration process prefer a gradual implementation of the new card platform as opposed to a one-and-done switch;
- 45% of banks in the migration process choose to work with external partners to ease certification of car schemes and provide expertise in migration processes, and
- The key driver of migration (60%) is that existing legacy systems no longer serve modern-day needs.
Tietoevry says its research findings reflect the growing complexity of the modern payments landscape. In addition to familiar card payment methods such as credit and debit, modern-day payments such as A2A (account-to-account), instant payments, Request to Pay (R2P), e- and m-Commerce have created new demands on legacy systems, which often can’t hold up.
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Regulatory headwinds boost the need to upgrade systems
At the same time, regulations such as SCT-Inst and PSD3 add urgency to the need to upgrade systems to facilitate flexibility in the evolving payments landscape.
Olexander Osadchuk of the Ukrainian Processing Center (UPC) confirmed that compliance and fast-rising business volumes had driven their decision to migrate to new card systems: “We needed a system that is fully PCI DSS compliant and also compliant with the requirements of international payment systems. That, together with the complexity of our legacy systems and growing business volumes, persuaded us of the need to change two years ago.”
Rising cost pressures of maintaining legacy platforms
Banks are feeling the pressure to begin migration processes, as the cost of migration is expected to rise as time passes. A study by McKinsey found that some banks are already spending up to 70% of their IT budget on the maintenance of legacy platforms.
“Consultants and analysts have been pointing out for some time that legacy systems are too expensive and time-consuming to maintain. Now it looks as though the speed and scope of change in the payments market have driven banks to the same conclusion,” said Valdis Janovs, Head of Instant, Retail Payments and Cards at Tietoevry Banking.
“At Tietoevry Banking, we combine market-leading systems and technical knowledge with decades of deep experience of managing migration projects. We are therefore ideally positioned to structure and develop banks’ migration timelines, manage the implementation and “go-live” of their projects and advise them on their approaches to clients, senior management and internal and external partners – including regulators.”
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