Payments — the new
player domain
How EY can assist
Payment is defined as an exchange
of financial value between two parties
for goods or services.
Contents
• Current trend......................................................... 1
• Importance of an end-to-end view of payments........ 1
• Areas of client focus............................................... 2
• Cross-teaming to better serve clients....................... 3
• Qualifications......................................................... 4
• Contact us............................................................. 5
Current trend
Financial institutions have long recognized the importance of payments to their overall
business. Most banks generate 40% to 50% of total revenue from payment transactions, even
before counting interest income generated by payments businesses like credit cards. In the
last several years, however, it has become clear that the payments business is attractive to a
broad range of new players interested in linking payment solutions to new business models.
Diverse players, including top technology companies and retailers, have invested heavily in
payments innovations that improve customer experience; lower operating expenses; and,
most important, increase total sales. Payments are critical to these non-banks because
payment is the “moment of truth” in the overall commerce life cycle. Mobile technologies,
open platforms and cloud-based processing solutions have accelerated the diversification of
the payments industry. Venture capitalists, private equity firms, technology manufacturers,
retailers and data analytic companies are investing heavily in payments.
However, even as new entrants increase investments in payment infrastructure, most
traditional financial services players are faced with aging legacy infrastructure, increasing
commoditization of core payments processing activities and greater competition for endcustomer engagement. In this environment, financial services companies are beginning
to understand that investing in their core payments businesses is critical to cutting costs,
reducing risk and remaining competitive.
Importance of an end-to-end view of payments
By their very nature, payments require a perspective that goes beyond organizational
or product silos because their execution invariably crosses traditional operating and
organizational boundaries:
• Lines of business
• Customer segments
• Product categories
• Geographic regions
• Technology platforms
As such, even the most basic understanding of how a payment moves between customers
requires an end-to-end focus. Moreover, in an environment of heightened regulatory scrutiny,
banks and their regulators have realized that an end-to-end view is critical to identify and
remediate risk and mitigate it in the future. At the same time, an end-to-end view of payments
also provides attractive opportunities to streamline and enhance the customer experience
while driving down the overall cost to serve the customer.
Payments — the new player domain |
1
Areas of client focus
Because an end-to-end view of payments is critical, EY has a range of opportunities to assist
our clients with important payments issues. Once most banks begin to investigate their
legacy payment infrastructure, operations and processes, several issues typically surface
immediately:
• Complex, aging, redundant and costly payments infrastructure
• Product innovation challenges
• Channel diversification challenges
• Uncertainty around new markets landscape
• Margin compression in traditional payments businesses
• Regulatory unevenness
In light of these challenges, EY can help banks and other traditional payments players assess
their ability to compete in an increasingly competitive and global marketplace. Specific areas
of focus include the following:
• Strategy and innovation:
• Product strategy
• Strategic technology design
• Globalization
• Competition
• Speed to market
• Data optimization
• Customer experience
• Operational efficiency
• Optimization of legacy infrastructure:
• Process standardization
• Outsourcing and vendor strategies
• Risk, regulation and compliance
2
| Payments — the new player domain
Cross-teaming
to better serve
clients
EY approaches client challenges using an “account-centric” approach to intimately understand specific business issues.
We deliver services through one or more of our four global service lines: Advisory, Assurance, Tax and Transaction
Advisory Services. Additionally, a dedicated financial services organization brings together geographic, sector, service
line and regulatory strengths specifically to serve financial services clients.
Advisory
Working with midsize to large financial and
government institutions, our Advisory service
line helps protect their businesses, improve
performance and enable change. Advisory
professionals have deep competencies in risk,
finance, supply chain, customer, and information
technology and are divided into three subservice lines to best serve clients: Performance
Improvement, Risk, and IT Risk and Assurance.
Transaction Advisory Services
EY’s Transaction Advisory Services works with a wide
range of clients across the globe, preparing them to
make educated decisions regarding strategic capital
management and transactions. Three sub-service
lines — Transaction Support, Capital Transformation
and Transaction Tax — all work toward helping clients
manage their capital agenda. Strategic planning on
how to raise, invest, preserve and optimize capital
helps clients gain a competitive advantage.
Assurance
Globally, EY has more than 66,000 Assurance
professionals providing audit and accounting services
to clients. Our services provide a clear perspective to
audit committees and stakeholders that our clients’
accounts comply with required audit standards.
Assurance services are divided into five sub-service
lines: External Audit, Financial Accounting Advisory
Services (FAAS), Climate Change and Sustainability
Services (CCaSS), Accounting Compliance and
Reporting (ACR), and Fraud Investigation & Dispute
Services (FIDS).
Financial Services Office
EY has a unique alignment specifically dedicated
to financial services clients. The Financial Services
Office includes 18,000 professionals globally who
are primarily aligned to key industry groups, including
asset management, banking and capital markets,
and insurance. They integrate with Advisory,
Assurance, Tax and Transaction Advisory Services
professionals to bring comprehensive coverage
across four global areas.
Tax
In Tax, EY associates assist clients with assessing,
improving and monitoring their tax-related
processes, controls and risk management. Our Tax
professionals focus on understanding and managing
tax compliance and reporting requirements and help
clients to maintain effective relationships with tax
authorities. Five sub-service lines cover a range of
potential challenges: Business Tax Services, Human
Capital, Indirect Tax, International Tax Services and
Transaction Tax.
Payments — the new player domain |
3
Qualifications
We have specific experience and a proven ability in the payments domain, conducting
technology assessment and rationalization exercises, as well as a leading customer experience
practice. These factors, combined with our deep professional experience in banking
operations, are key differentiators to help address the highest-priority matters and prepare
institutions for a new operating environment.
• Differentiating approach and knowledge of payment applications and core banking
platforms:
• We understand that payments technology integration requires folding in business
process changes and documentation and asking the right questions within the context
of the changing regulatory environment (e.g., OCC, CFPB, recent settlements).
• Proven track record of successful large-scale implementation at financial institutions:
• Our successful track record at top-tier financial institutions around large-scale
implementations in claims management, core banking, risk management, finance,
underwriting, and many other business and functional areas gives our practitioners
a unique blend of experience to call upon when leading transformations within
complex engagements.
• Dedicated payments and integration team with the required skills for a successful
relationship:
• Our dedicated team of people has a comprehensive understanding of the payments
business and technology integration challenges, as well as of the risk and regulatory
environment within the financial services industry, to help you proactively clear
integration and regulatory hurdles.
• Experience with payment platform transformation projects:
• We have a solid, current track record in payment consolidation and operational
efficiency programs.
• Proven methodologies to balance risk and opportunity:
• Our disciplined approach addresses risk and control issues, as well as technology
and business challenges.
• Clear understanding of the risk and regulatory environment at financial institutions:
• Our team members have diverse skill sets and knowledge to successfully implement
payments initiatives at financial institutions both globally and in the US, and they
understand the complexity of the risk and regulatory environment.
• Our successful track record of implementing risk and regulatory programs as a
component of a larger initiative and a standalone perspective at various banks
globally will provide the team with the ability to successfully account for risk and
regulatory requirements as part of this initiative.
4
| Payments — the new player domain
Contact us
Our Payments team is part
of EY’s Banking network and
supports clients from core
locations across the country.
Please contact one of our
regional leaders if you would
like more information about
our services or would like to
schedule time with our team.
Key contacts
Clayton Baker
Principal
Ernst & Young LLP
Charlotte/Raleigh
[email protected]
+1 214 969 0665
Margaret M. Weichert
Principal
Ernst & Young LLP
Atlanta
[email protected]
+1 404 817 4854
Krishna Ramakrishna
Senior Manager
Ernst & Young LLP
Chicago
[email protected]
+1 312-810-4382
5
EY | Assurance | Tax | Transactions | Advisory
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