Why do non-banks want direct access to payment infrastructure? There are four key restrictions associated with the current model that act as barriers to alternative payments providers. 1. Legacy Problems: having to disclose 600,000 missing payments in the Faster Payments system. When banks developed their core operating systems over two decades ago in a pre-Internet Forced to run on the rails of the banks, alternative era, they were not anticipating the technological providers suffer the consequences when traditional revolution that would develop in the years that banks’ systems fail. Given the opportunity to access followed. Fast growth for banks in the 80s and 90s infrastructure such as Faster Payments directly, saw many making quick fixes to keep up, rather alternative payment providers could rely on their than overhauling the whole system. What’s left is own, flexible modern IT architectures to manage a convoluted mess of system upgrades on top of the payment flow. antiquated architecture, which struggles to keep pace with today’s digital financial demands. 2. Hindering Innovation: As a result, those that now control this payment Alternative providers currently offer streamlined ecosystem – the high street clearing banks – don’t solutions through their innovative front-end have the robust operating technology to maintain technology. But all the while these alternative and develop the core payment infrastructure they providers are chained to the back-end system built, which now controls services such as BACS of the banks, they cannot truly adapt their core One incident last year resulted in a high street technology and evolve at the speed that they, and their customers, desire. bank having to disclose 600,000 missing payments in the Faster Payments system. 3. Lack of Control: and Faster Payments. Over the past few years we Having suffered a slew of regulatory fines for lax have witnessed a number of IT outages and errors anti-money laundering controls, high street clearing in processing payments at major high street banks. banks took extreme measures to better manage One incident last year resulted in a high street bank and govern compliance risks These controls can 4 | Payment infrastructure: a call for fair and equal access for FinTech