Agile methodology is perhaps the only path forward for payments companies that want to remain competitive in a fast-moving landscape.
Traditional payments service providers are under fire from FinTechs that have rocketed to the top of the line thanks to agile methodology and techniques. In some cases, traditional payments players are partnering with FinTechs to make real gains in the market. Vantiv’s merger with Worldpay is a prime example; Worldpay embraced agile processes to become a global leader in payments, managing $1.5 trillion in transactions per year. Mobile payment platforms are also making inroads on a bustling market, threatening traditional providers with their digital-first agendas. Customer expectations make mobile payments primed for growth as they offer convenience and speed.
In a highly disrupted market, the need to adopt agile approaches has become paramount to overcome the inhibitions of outdated and legacy organizational structures, systems, and processes. Yet even the task of becoming agile takes time. Deploying agile teams and scaling the methodology across the organization is challenging, but the payoff is undeniable. Where collaboration and communication between departments don’t currently exist, agile promises to deliver simpler, more wieldy processes to bring products to market faster.
How Agile Adds Value
Two of the biggest outright benefits of the agile methodology are speed and cost reductions. Agile payments organizations can bring new products and services to market much faster — and with an improved customer experience. Take the following real-life examples into account:
A leading U.S. mortgage banking services provider was able to roll out new product features in 6-8 weeks rather than 3-6 months, reducing the overall time by nearly 75%. Time savings wasn’t the only benefit; the percentage of customers using the new features increased from 50% to 87%, leading to a JD Power customer survey ratings increase.
Agile approaches paid off in a big way for a large global bank that wanted to deploy a digital channel for consumers looking for a mobile-first experience. The bank was able to cut the cost of customer research by 94% and reduce both the time it took to execute payments and the time it took customers to open a new brokerage account by 60% and 75%, respectively.
Another U.S.-based financial services company reduced the amount of time it took to roll out new features by 55% and the time to test them by 70% — all while reducing the cost of product development by 40%.
The Benefits of an Agile Framework for Payments
An agile approach to software and product development for payment service providers enables adaptiveness during product development that leverages collaboration of cross-functional teams to build innovative solutions, faster. For payments organizations, that means keeping up with quickly evolving customer behaviors and preferences by delivering customized products and services faster than the competition. The payments landscape is evolving at such a pace, that firms only have one choice: evolve at the same pace or fall behind. Here are several ways in which an agile approach can improve the odds for payments organizations and aid the digital transformation process.
Agile methodology allows traditional players to mimic startup culture by implementing an “all-hands” mentality via scrum teams that work together on product development. Cross-functional teams bolster creativity and allow different groups to learn from one another. Rather than developing new products and services in a myopic way, collaboration fosters new insights and new ways of doing things.
Collaboration between teams that normally wouldn’t mix can lead to more holistic, novel solutions that better serve the end customer. Some organizations create dedicated teams for this purpose alone, tasking them with building innovative solutions and researching new ways to do things. The end result is more cohesive solutions with a shorter time-to-market.
Agile development is critical in the rapidly changing payments landscape. The ability to anticipate evolving needs and priorities that are moving targets is the only way to thrive in an ecosystem undergoing so much digital disruption. In addition to meeting customer needs, the fast-paced regulatory environment makes it imperative that payments companies can quickly and easily tweak products and services as needed. Agile frameworks can drastically reduce the time it takes to make these tweaks and release new features or solutions.
While the financial sector as a whole has been hesitant to jump headfirst into the digital revolution, new entrants are quickly forcing the hands of traditional players as they offer easier, faster ways to pay, receive money, and transfer funds. Agile development allows teams to meet the new speed of the market, quickly validating prototypes and making necessary changes to offerings in the market.
Perhaps the most important benefit of an agile payments infrastructure and methodology is the ability to innovate quickly. The ability to continuously and consistently improve products and services allows payments organizations to constantly improve and enhance solutions based on customer feedback and needs.
The ability to capitalize on new trends more quickly and bring innovative solutions to the market faster enables growth in a highly competitive market. It also supports customer acquisition as product and software teams work together to deliver helpful, innovative solutions that are in sync with current customer needs.
Traditional players in payments should strongly consider the benefits of adopting an agile development method to better fulfill changing customer needs with innovative new solutions. The ability to deliver products to market faster is a competitive advantage — and a necessary one given the industry continues to become more and more crowded.