By January 2018 all European Union (EU) member states will have implemented the revised Payment Services Directive (PSD2). This directive has a primary goal of establishing a uniform, transparent and open EU payment market that promotes innovation and competition, whilst adhering to strict cyber security requirements.
For the most part, the banking and financial services sector globally has a solid reputation for delivering secure information systems, and gradually over the last decade the banking sector has started to develop a wide range of end-user banking and finance applications on both traditional and mobile platforms.
At the same time, Fintech has become a big thing, an emerging powerhouse of innovation and agility in the financial services sector. However, in truth, this emergent Fintech industry and advanced applications are being stifled by not always having ready access to financial services data.
PSD2 has been built to correct this imbalance and support the build of a European payments ecosystem that enables new innovative thinking, investment and building a more competitive environment, which ultimately bodes well for the customer.
PSD2 obligation or opportunity?
There has been significant consternation in many of the more traditional banking enterprises that PSD2 could have a significant impact on their business by causing them to spend significant money on new solutions infrastructure to be compliant with PSD2, but at the same time being required to open-up to encourage a more competitive landscape (see PSD2: Who Wins? By Conor Ogle).
However, we have been working with several established European financial institutions that have been coming at PSD2 from a different angle. Yes, ultimately there is an emerging compliance requirement that needs to be addressed, but more importantly, some of our customers see this as a significant opportunity to modernise their payment systems.
In truth, many of the new wave banking applications and solutions are interfacing with legacy systems that were never intended to provide open, transparent, or for that matter, high performance transactional systems. For the most part, these legacy data platforms were built to be secure, accurate and to service internal access requests only.
The environment and customer expectations have changed so dramatically, in this hyper-connected world, not only customers, but also corporations (both sides of the equation) expect everything to be “instant and always on”.
To be competitive now traditional banking systems need to engage effectively with customers and provide a personalized user experience with the reliability and scale that is required of these types of applications.
Modernising payment systems
So what does it mean to have a modernised payment system? While we understand that complex and large corporations such as financial institutions do not rely on technology alone to deliver business processes, there are some obvious needs that must be addressed by the underlying technologies.
Several of our more traditional financial services customers are using Apache Cassandra as a payment transaction store and caching layer between the front-end applications and the traditional mainframe systems. These companies understand the challenge that many of their legacy systems are not capable of handling all the potential requests that could come from an external source, let alone for their own applications. Not only is security a consideration, but continuous availability, scale and performance are all key performance indicators.
Apache Cassandra has been built to be highly performant, resilient and capable of scaling rapidly. Now don’t get me wrong, I am not saying that the Apache Cassandra technology is the panacea that will solve all European banking modernization objectives, but it will go a long way to providing the lightning fast, highly available and highly scalable platform on which a modernized payment ecosystem can be built.
Apache Cassandra has been architected for real-time enterprise databases that require vast scalability, high-velocity performance, flexible schema design and continuous availability – all the missing requirements for a modern payment ecosystem.
Cassandra’s elastic scalability allows you to easily add capacity online to accommodate more customers, more usage and more data whenever required. In addition, the “always on” architecture contains no single point of failure and ensures that systems can be architected for continuous availability for business-critical applications that can’t afford to go down, ever.
Fast linear-scale performance enables sub-second response times with linear scalability. Google has demonstrated that they could achieve one million writes per second on Google Compute Engine with open source Apache Cassandra.
At the Cassandra Summit in San Francisco in September 2016, Apple presented to the community that the company is running 100,000 nodes. It is obvious that Apple is running some of their core business applications on Cassandra, dealing with transaction volumes that possibly outstrip some of Europe’s largest banks. And they put this all into place over the last 3 years. Whilst maintaining close to 100% availability for these services.
There are additional advantages however in using this technology, not only do you get the transaction response time that you need to engage effectively with your customer, the Cassandra technology also provides you with the ability to perform deep analytics on large datasets, which then in turn helps you to get better value out of your data and more effectively engage with your customers.
Apache Cassandra delivers a key building block to meet the requirements of a modern payments system, performance, resilience and scalability. Many financial institutions are now aware that having the technology base of Cassandra will provide a competitive advantage in this race to provide modern and amazingly efficient banking and payment interfaces.
Not only does this technology provide the necessary key performance indicators for performance, scale and availability, it also enables effective engagement with the end-user providing a more personalized user experience.