In the age of instant gratification, merchants and financial institutions are both under increased pressure to meet dynamic demand in real-time. Building an on-demand infrastructure for payment processing is the key.

Many financial institutions (FIs) and other payments organizations were reluctant to dive headfirst into digitization initiatives prior to COVID-19. Now that we are experiencing the full force of this pandemic and its impact on business and payments, many FIs are reconsidering their priorities. The analog hindrances that could be swept under the rug before are now on full display as remote work and digital payments become the new normal.

Any hesitation or resistance to public clouds as on-demand infrastructures for payment processing has weakened as the need for speed and the ability to meet the needs of the modern customer become crystal clear. With a 209% increase in online retail sales in April alone year-over-year, there is no denying that digital payments have become a mainstream preference for consumers. It doesn’t stop there; B2B payments operations are also being scrutinized as cash flow and supply chain issues come to the forefront. The result is a clear need to scale up quickly and the ability to process high volumes of transactions without the worry of capacity or control issues. Fortunately, the cloud can address all of those needs and more.

Matching Dynamic Demand

Today’s consumers are seeking a convenient, streamlined, and secure payment experience, whether they’re making an online purchase or transacting with their bank. Unfortunately, the dynamic variables associated with serving customers online can sometimes hinder the payment experience. On the retail side of things, busy shopping holidays (i.e. Black Friday) can be taxing on on-premise servers that are not easily scaled to address growing demands at peak times. Banks and other financial institutions face a similar quandary. Banks that serve customers online also face peak demand periods (think payday that occurs every other week), which require the ability to scale computing capacity to adequately handle that demand while providing an optimized customer experience.

In both cases, the reality is that those merchants and financial institutions that are not adequately prepared to handle dynamic demand and scale quickly will lose out to their more agile competitors. Customers have lost their patience for waiting in lines — even virtual ones.

The dynamic demand issue is one more easily solved with a cloud-based infrastructure, which can be scaled up or down as demand ebbs and flows. The ability to quickly scale means customers are not left standing in line. This on-demand nature of the cloud makes it easy and more cost-effective to adjust infrastructure as needed, as opposed to on-premise infrastructure, which is incredibly difficult to scale. It requires (accurate) predictions about how and when demand will spike and costly hardware investments that may only be relevant for a small window of time.

For truly customer-centric businesses, building on-demand cloud infrastructure is the only way that makes sense because it is the only way to truly meet customers’ needs without hiccups. It is an efficient, less expensive way of heading off the ongoing IT pain point of matching infrastructure to current needs. Moving to the cloud affords businesses and banks alike a greater capacity to meet demand.

Technology That Supports Scalability

Scalability is the answer to dynamic demand and requires an infrastructure that can respond in real-time to fluctuations in demand. In-memory processing and distributed cloud architectures make this possible, especially with processing speeds that are orders of magnitude faster than a database and that enable instant load balancing. Rather than being reactive and losing frustrated customers to competitors, organizations are able to eliminate delays in payment processing.

Leveraging a new computing stack, revenue-critical applications can quickly retrieve information from in-memory caches, rather than making the long, arduous journey across the network to a database. The result is RAM-speed transactions that are facilitated by both streaming and stored data as well as algorithms that can quickly detect fraudulent activity. Cloud enables these processes to run at sub-millisecond speed and can automatically adjust to any changes in demand.

The End Game

As new entrants flood the financial services and ecommerce space and come armed with bleeding-edge technology meant to disrupt the market, incumbents must embrace digital transformation and leverage agile cloud technology to remain competitive and grow.

Harnessing an on-demand infrastructure with cloud technology allows these organizations to scale, innovate, and go to market with enhanced, customer-centric products and services more quickly. This consumption model frees up IT resources to shift focus toward strategic initiatives that help grow the core business and differentiate from an increasing number of competitors.

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