A competitive advantage in digital payments should not break your bank

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Aerospike Marketing
December 9, 2021|6 min read

Both financial and non-financial businesses need to embrace digital payments if they want to stay competitive. Still, they also must make sure they use the right technology if they’re going to keep costs down and meet strategic goals.

In a recent BrightTalk webinar hosted by Aerospike and featuring a conversation with Gordon MacMaster, Vice President of Analytics and Marketing for Reliable Software and Stuart Tarmy, Global Director, Financial Services Industry Solutions, Gordon says that it’s no longer just banks or lending organizations in the payments space. For example, sports teams are establishing their own embedded payments in their apps, allowing users to buy seats for games, reserve tickets or purchase snacks or merchandise. At the same time, Gordon also highlighted the need for banks to embrace digital payments as a matter of survival since more customers expect to pay online. This is especially true due to the increase in online shopping during the pandemic.

“It’s going to come to a point where employees and other businesses and consumers are going to want multiple ways to come and pay for goods and services. It’s not going to be just the traditional one transaction through an existing financial system,” MacMaster says.

The six keys to successful digital payments

MacMaster says there are some key lessons to learn for companies moving into digital payments:

  1. Don’t try to do it alone. Forget the endless reviews and debates in your company’s procurement process and instead treat digital payments partners as semi-autonomous relationships.

  2. Prioritize the customer experience. Customers expect the same payment experience from every company they deal with, and they don’t care if it’s a finance or non-finance business. “They’re expecting the same ease, the same ability for everything that they do online,” whether it’s from Amazon or some other company,” he says. So if the payment process “looks sketchy,” then no flashy online catalog or snack purchase at a game is going to change that for the customer. “If that last bit doesn’t feel right, that’s what they’re going to remember,” he says. “And generally speaking, the payment is usually the last interaction in that whole customer journey.”

  3. Share information. Keep in mind that the experience you provide your customer may extend to the customer’s customer. That means you will need to keep information flowing such as sales numbers as well as spikes or declines in demand. In addition, your customers will need access to reports and dashboards they can share with their customers.

  4. It’s not just about the money. Companies like Venmo and PayPal – or even non-financial organizations – are using loyalty programs so customers can earn rewards. Not only are these programs critical, but they also need to be well-executed. “A lot of the customers, if they don’t get that type of experience, they’ll just move on to something else because that loyalty program is often the thing that differentiates your digital payment from another competitor,” he says.

  5. Real-time data is vital. Many financial institutions still have massive legacy mainframe COBOL systems, but they’re not designed to handle real-time data. However, customers expect real-time purchases online and access to payments right away, which won’t be possible just by upgrading the entire mainframe. So instead, MacMaster says Aerospike offers a mainframe augmentation solution “that’s very, very good at handling this sort of situation.”

  6. Payments are touchpoints, not transactions. Make sure to upsell other products and provide additional, related information as part of your customer’s digital payment experience. Failing to do so is a huge missed revenue and/or loyalty-building opportunity.

MacMaster also emphasizes that it’s essential to take a “modern approach to managing your data and analytics,” which is where a platform like Aerospike can be critical because it enables a company to tie lots of information together and make it accessible and usable very quickly.

Six ways the Aerospike Real-time Database is critical for successful digital payments

Stuart Tarmy, Global Director of Financial Services Industry Solutions at Aerospike, says that in addition to working with Reliable Software, Aerospike works with many of the leading financial service companies, including PayPal, Barclays, leading bank and brokerage firms, and some of larger banks in Europe and Asia Pacific.. All of which depend on Aerospike to provide real-time speed, high availability and reliability.Tarmy explains that for payments, financial services, and banking, Aerospike can provide:

  1. Intraday system of record/operational trade store. As mentioned earlier, Aerospike provides a mainframe augmentation solution to enable companies to keep their mainframe, while using Aerospike as a real-time data layer to convert legacy batch applications into real-time, customer-facing solutions.

  2. Algorithmic trading and trade repository. Aerospike works with time-series data. One of Europe’s largest analytics providers uses Aerospike to quickly ingest and perform sophisticated analytics over discrete time intervals.

  3. Risk modeling and analysis. Aerospike helps with risk modeling analysis and compliance in real-time. This is critical because customers have come to expect real-time interactions, which have become more complicated to deliver because of increased risks due to increasing regulations, online fraud and a push toward more digitization.

  4. Compliance. Citibank serves as a warning after recently being hit with millions of dollars in fines by federal regulators because of compliance issues. As a result, “they’re moving things into better risk models and better risk measures across all their asset classes,” Tarmy says.

  5. Identity management and fraud detection. As a real-time data platform, Aerospike allows companies like PayPal and Barclays to implement extremely fast artificial intelligence and even neural net deep learning solutions to mitigate online fraud.

  6. Customer 360 and personalization.

    Aerospike works with companies to more completely understand their customers to deliver better customer experiences and reduce customer churn.

Tarmy also says that as more businesses move to implement AI-based solutions, it’s essential to have algorithms developed, tested, and refined across extremely large volumes of data. For example, PayPal uses deep neural nets as part of its fraud detection, and they must do it in real-time. These neural networks can look at 10 million or more data points, ingesting robust data sets from multiple sources so that they deliver truly industry-leading analytics.

Aerospike’s system has been optimized to handle vast amounts of data in real-time for financial services companies, helping them to:

  • Better understand their customers and what to provide them for an optimal customer experience

  • Be more effective at detecting and stopping fraud, while reducing false positives

  • Optimize the ingestion of data and enable sophisticated AI/ML and even neural net/deep learning solutions.

No matter where a business may be on the digital payments journey, Aerospike is a platform that works to help meet data demands, use AI effectively, provide a better customer experience, and avoid the expense of re-platforming. It’s the right technology to keep costs down and help a company position its digital payments to meet demands now and in the future.

To learn more about how Aerospike’s Real-time Data Platform is used as well as to read customer success stories, visit the Aerospike Payments web page.