Industry
Banking
Banking Services Transformation: Unlocking Exponential Value
Solution
TCS BaNCS™
TCS BaNCS™: Enabling Transformation in Banks and Financial Institutions
Highlights
- Over the last seven years, India has launched several new payment rails, leading to triple-digit hypergrowth in payment volumes. Banks have struggled to keep up, especially given the limitations of legacy core banking systems. In response, many banks are separating payment functionality from their core banking solution by investing in a payments hub.
- Enterprise payments hub (EPH) powered by TCS BaNCS delivers a standardized solution that handles all payment types, optimizes transaction processing costs, and minimizes disruption of core systems. It allows auto-scaling to handle the transaction peaks in the fast-growing Indian marketplace.
- Using microservices and containerization deployed on Amazon Web Services (AWS), the application precisely matches computing capacity with transaction volumes, ensuring high resilience and zero downtime for a 24/7 operation representing critical financial infrastructure.
- Furthermore, the EPH provides APIs to help the bank expand and integrate its business into a more extensive and extended ecosystem.
On this article
Payments hypergrowth
India launched several ambitious initiatives to promote digital identity, financial inclusion, and mobile access in the last decade. The country saw the launch of many new clearings, including unified payments interface (UPI), immediate payment service (IMPS), National Automated Clearing House (NACH), and Bharat Bill Payment System (BBPS), and these efforts earned India a global leadership position in digitalization, including triple-digit, year-over-year hypergrowth in digital payments.
One of the intended and beneficial effects of immediate payments is that they place significant competitive pressure on banks. Mobile apps allow customers to move money from one bank account to another easily, and in response, banks, whether acting on behalf of remitters or beneficiaries, must show speed, efficiency, and operational excellence while delivering easy-to-use, consistent customer experiences.
For example, when payments are routed through a bank’s legacy core banking system, the core itself can become a bottleneck, leading to service outages impacting the availability of payment services to customers.
The key insight here was that the hypergrowth occurred only with payment volumes rather than the number of customers or accounts. Moreover, these payment volumes were highly variable, with peak days requiring many times the capacity of non-peak days.
Accordingly, banks must achieve functional separation between payments and the core banking system. Payment solutions require flexibility to scale up and down on demand, easing pressure on core banking systems.
The EPH powered by TCS BaNCS helped achieve scalability in payment volumes, reliable connectivity to new payment rails and regulations and expanded flexibility to launch new products rapidly.
Enterprise payments hub
TCS BaNCS-powered EPH is built on microservices architecture. Each discrete microservice within EPH offers a set of specific functionalities like immediate payments with powerful APIs that allow mobile apps to enhance the customer experience by integrating easy-to-use, convenient payments. Moreover, microservices can be selected and composed to match any process flow, an approach that supports the highest levels of flexibility.
Microservices are available for connectivity to payments rails, including NEFT clearing house payments, RTGS wires, and IMPS real-time payments. Each payment channel can be scaled independently to ensure high resiliency with zero downtime, even with rolling maintenance updates and a 24/7 operational schedule.
Deployed on AWS, EPH services are scalable up and down to accommodate any payment volume. By acting as the hub for message traffic between the bank, mobile apps, and payments rails, TCS BaNCS EPH can handle the bulk of the payments workload. Core banking integration is only necessary for account validation, funds reservation, and booking completed transactions. This insulates the core banking system from the extensive demands of hypergrowth payments, ensuring that banks can compete on functionality, service, and efficiency in a hyper-competitive marketplace.
EPH for a next-gen bank
A leading next-generation universal bank in India recently deployed TCS BaNCS EPH, and this first-of-its-kind deployment of a microservices-based payments architecture has delivered widespread benefits.
For clients: TCS BaNCS offers a greatly improved client experience across all payment products, with single-point onboarding, consistent reporting, and single-window service. The fault-tolerant, cloud-native solution also improves customer experience by minimizing system outages.
For employees: The optimized workforce channel enables higher productivity and faster resolution of customer issues related to any aspect of payments.
For the bank’s IT developers: The API-driven solution offers integration between payments and the rest of the bank’s technology landscape, including legacy systems, as well as with a large and extended ecosystem of potential partners.
For business managers: Microservices significantly reduces time to market for new products, leading to enhanced market positioning relative to competitors. This trend will accelerate given the trend toward no-code development tools that enable business users to define and build new services.
For relationship managers: The bank can extend specific services to their customers based on standardized payment processing capabilities made accessible through microservices APIs.
For payment processing: The unified EPH solution connects to all payment gateways across all applications. This ensures operational efficiency and visibility, while also enabling the bank to perform cost-effective clearing and settlement of “on-us” transactions internal to the bank and its customers.
For risk management: Straight-through processing capabilities are backed by extensive controls including transaction warehousing, transaction replay, centralized limit management, and reconciliation controls. The configurable transaction workflow also enables faster adaptation to regulatory changes.
For the IT operations team: On-demand scaling of computing resources through AWS ensures optimum infrastructure utilization. Banks can reduce CapEx during slow periods while retaining the capacity to meet increased demand volumes. Also, the bank’s operations team has dashboards and tools to ensure 24/7 up time that aligns with customer expectations. The cloud-native solution maintains high resiliency with zero downtime, even when deploying a rolling update.
With TCS BaNCS, the bank can successfully separate payments from core banking, allowing it to meet scalability targets, performance requirements, and volume growth objectives at a reduced transaction cost.
First-of-its-kind deployment
The global payments industry has recognized the successful, first-of-its-kind deployment as a model for a targeted technology deployment that avoids the immediate need for a core banking upgrade. The approach also demonstrates the benefits of microservices as a foundation for next-generation banking.
With the deployment of TCS BaNCS, banks can not only position themselves to benefit from continued hypergrowth in payments but also establish a future-proof, cloud-native, microservices-based technology architecture capable of meeting the emerging needs of the fast-developing marketplace.
A leading next-generation universal bank in India recently deployed TCS BaNCS EPH, and this is first-of-its-kind deployment of a microservices-based payments architecture that has delivered widespread benefits.
