Dear Customer,

For my column today it is hard not to start with observations on some of the macro changes and uncertainty that is flowing through the global financial markets and UK payments regulation – and how these could affect your business.

Firstly, you will no doubt have seen the impact tariffs are having on financial markets and globalisation.

These tariffs, and I think as importantly their uncertainty and inconsistency, will lead to challenges in both global supply chains and economic growth. It is hard to see a situation where this does not ultimately impact on some investment decisions made by banks.

I get this observation talking with clients. While talking with them though, what becomes more clear is that amidst that uncertainty there remains no uncertainty over the need for banks to continue their uplift in technology to support their customers’ needs – and particularly their demanding needs in payments.

There is a resounding recognition that putting off replacing 30/40-year-old mainframe technology will not improve resiliency in payments infrastructure, or manage the still-increasing demands for performance, scaling and features that these technologies support. Investment in the right foundational technology is always a sound decision.

To put it another way, technology is an enabler. The need to have scalable, resilient technology doesn't go away. In an economic downturn, consumers’ expectations are still increasing. Migration to real time payment transactions is still going to increase.

For this reason, Form3 has developed a platform that saves banks valuable time and money associated with them building and operating their own infrastructure. A platform approach will also future-proof our customers against regulatory changes and associated costs.

In summary, changes in the tone and interactions across the globe are happening. This will affect banks’ spending - but the need for technology to manage macro, generational and consumer behavior trends doesn’t diminish in this environment. Be smart and invest in the right technology for you and your customers.

The second major change was news that the Payment Systems Regulator (PSR) will be abolished, with its functions transferred to the Financial Conduct Authority (FCA).

The PSR was established to meet a need in the UK – with sound intent. Over time though the regulatory landscape became too crowded and complex. This prevented technology providers and regulated businesses from growing as fast as they could do. That growth remains a central competitive edge for the UK, and an essential engine for growth in the economy.

Streamlining the regulatory landscape will help the UK to generate that economic growth –supported by and driven by the new National Payments Vision (NPV).

NPV’s focus is to ensure that across all stakeholders there is a recognition of the criticality of payments, not just for the organisations involved in their delivery, but their broader empowering impact on the wider UK economy. The Vision is about collaboration with financial services customers, including banks, on the design and delivery of next generation infrastructure, including establishing an industry delivery body.

A really positive outcome from the NPV, and that simplified, aligned regulatory environment, will be a focus on investment, in a market that is simpler to operate in. Banks can provide valuable insights here.

Until next time, I hope these industry changes don’t cause you too many headaches. If Form3 can help in any way, please get in touch for a chat.