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CASE STUDY

Nationwide select Form3 to partner on implementing a cloud-native payments system

Nationwide Building Society

Nationwide begin their payment transformation

In 2018, Nationwide, the world's largest building society, began the process of mapping out an ambitious transformation of its payment’s infrastructure. This transition would end up being a multi-year process, involving multiple providers and improving the resiliency of Nationwide’s payment infrastructure. 
 
The society, whose group assets total over £230bn, began the transformation with an internal analysis of the project scope and requirements, launched in 2018. This endeavour would result in a migration of the infrastructure underpinning all payments to and from Nationwide accounts for the foreseeable future. The results of the procurement exercise gained wider public visibility in 2021, when Nationwide announced a partnership with infrastructure provider, Form3. 

“The business case was made that there was a need for a new payment infrastructure to improve availability to customers and facilitate long-term growth”. 

Otto Benz · Payments Director at Nationwide Building Society

This prediction is backed by statistics from the UK’s retail payments operator and standards body, Pay.UK. In 2021, According to the organisation, the Faster Payments System enjoyed a record-breaking 12 months, processing 3.4 billion transactions with a value of £2.6 trillion.

This represented a year-on-year volume increase of 568 million payments, or 20%, and a 24% jump in values (up from £2.1 trillion in 2020). The rise in uptake during the previous year was similarly rapid, likely due to the pandemic, with Faster Payment transactions increasing by 383m during the 12 months.

Metrics of success

Outside of being cloud-native and extending the shelf life of Nationwide’s payment infrastructure, Benz cites the resiliency of the Form3 platform as a key criterion for selection. To this end, the key performance indicators that Benz and his team report at Board level, and which are regularly communicated to Nationwide members, include uptime and payments response time across the society’s three digital payments channels. 

The first step of this modernisation was delivered in October 2020 with reduction to near zero for unplanned outages and reductions in downtime for planned maintenance. 

“For us, the way forward for this project is to further improve resiliency and decrease downtime.”

Otto Benz · Payments Director at Nationwide Building Society

Payment Orchestration

The next stage in the process was to continue to migrate into the cloud and so enable Nationwide to modernise more of their legacy payments system. That system was heavily integrated with each of Nationwide's payment channels and payment processing systems, such as accounting, ledger, fraud, and AML services. The partnership utilised Form3’s Payment Orchestration capability to shift this vital engine of payment processing into the cloud. This system utilises an event-driven SaaS-based architecture to integrate between Form3 and nationwide systems, permitting the new platform to communicate with those vital downstream processing systems without a complex locally hosted payment engine. This enables the payment modernisation program to proceed iteratively, as each payment processing service can now be migrated in isolation. 

This second migration started in October 2023 and is currently processing Nationwide inbound single immediate payments (SIPs), equating to c.21 million payments a month from c.12 million customers. This will be extended in the next few months to include all Nationwide inbound faster payments, with the first outbound channel on track to migrate in March 2025.

Since deployment, Nationwide has seen an increase in performance, resiliency, and a reduction in payment outages. The results were so impressive that initial migration of the SIP transactions volume was completed at an accelerated rate.

Nationwide customers benefit from the improved performance/availability and Nationwide with much improved speed to market for changes, lower operating costs, and a highly available and highly resilient payment system. 

“We are very excited to be working with Nationwide on this ground-breaking integration. This allows them to take advantage of scalability, resilience, security, agility and cost.”

Michael Mueller · Executive Chair

Scale and further development

Over the course of the next year, Nationwide will complete migration of all Faster Payments to the new Form3 powered solution and will also deploy their own systems across multiple cloud providers enabling the decommissioning of the legacy payment engine.  

Once these changes are made, Nationwide will re-assess their position and plan the next phases of work, which are likely to include BACS and other payment systems, according to Benz. 

Nationwide's Timeline

  • Internal analysis of project requirement and scope in 2018/2019. 

    September 2018

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