What do public cloud and API-first infrastructure have in common?
Both “would never receive a regulatory green light for use in financial services” according to my former boss, Nick: a senior decision-maker in the technology division of a large bank. Uber and Amazon, Airbnb and Netflix: API-first, cloud-native businesses were about to define the decade ahead but Nick was having none of it.
He didn't just refuse to accept it.
He went out of his way to prove it wrong, by resisting the adoption of digital capabilities inside our organisation, or limiting them to marginal use-cases.
And he was not alone in this, the sentiment was shared across the industry.
For way too long, resistance and small-scale use cases solving no real problem were emblematic of the fact that the industry is taking the scenic route to learning that innovation needs to be useful, scalable and revenue-generating.
It took us a while.
But we are finally here. The technological capability landscape inside financial services is fundamentally altered and still evolving. And no vertical has changed as profoundly or as rapidly as cross-border payments.
Let's play the game again.
What do Shyft, Starling and XTransfer have in common?
On the surface, absolutely nothing, other than they all have cross-border solutions in-market powered by Visa.
Shyft is Standard Bank’s embedded finance solution, enabling internationally-mobile customers to store and pay in several different currencies at a much lower cost and at greater speed than any alternative.
Starling Bank doubled down on helping SMEs (consistently under-served by large, traditional institutions) transact globally while appearing local to their customers.
And XTransfer’s solution, also supporting international trade for SMEs, is offering an alternative to telegraphic transfers for payment collection.
We can agree: very different products.
And yet, they have three major things in common.
The first is that they all leverage the very technology my old boss was adamant would never catch on.
In their own infrastructure and in the partner they have chosen in Visa Cross-Border Solutions, the solutions are API-first and cloud-native, creating a technology stack with a lower cost footprint enabling higher margins.
In fact, XTransfer confirms that since partnering with Visa Cross-Border Solutions in 2018, XTransfer has delivered a faster and more convenient payment collection experience for its customers, while reducing costs by a whopping 80 per cent.
In short... Nick was wrong: not only did this technology catch on, but it offers better performance, lower cost and higher security and resilience at scale by design.
Experiments in labs are great but the real world needs to operate at 99.99% availability. This is something Visa Cross-Border Solutions aims to continuously provide its customers — and does: do you hear that Nick? — 4 9s availability and the ability to execute more than 65,000 transactions per second.
Because cloud done right is actually safer, provides better value and is more responsive than any technology we have had before.
The market knows it. The regulator knows it. Even Nick must know it by now.
The second thing these products have in common is their partnership with Visa Cross-Border Solutions in particular, and partnership in general.
There is so much happening out there.
So much change. New technology to understand, assess and implement. Existing technology to maintain, repair or replace.
Rapid regulatory change.
Market volatility.
And the clients' needs are ever-changing. In order to successfully keep pace and maintain the relevance of your business while managing cost, risk and the messy work of running an organisation, you need to be clear about all the things you won't become an expert in... but will rather partner with someone who is already an expert.
The third and last thing these three examples have in common is that they solve real market problems for real communities of users big enough to make a difference to the customers and create a sustainable business solution.
After 20 years of chasing after innovation in financial services, navel gazing and wasting time, money and energy trying to convince the wrong people of the wrong things, furnishing technical proof points to people with no technical know-how and incapable of furnishing business proof-points because the problems being solved or the scale at which it was being solved couldn't stand up to scrutiny... it is time we looked at what the successful technology implementations have in common: they solve a real problem, their economics work, their technology use is robust and fit for purpose and they tend to be partnerships of experts coming together to go faster and further than they would alone.
I dare say even Nick would admit the truth of this: despite what we may have originally thought, it was never about innovation.
It was always about impact at scale and progress for our businesses and communities.
Article written by Leda Glyptis, former banker and author of Bankers Like Us, in partnership with Visa Cross-Border Solutions
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