The bank was able to differentiate itself by deploying a payments solution that transformed its payments estate and enabled it to process high volumes of transactions, helping to evolve its cash management business while supporting future business needs in a crowded and changing industry landscape.
– IBS Intelligence

Overview

The functionality and capabilities offered by payment platforms differ, but a few factors are constant: flexibility and scalability are essential. This is especially true in the aftermath of the COVID-19 pandemic, which has accelerated the demand for digital payments.

Payments to employees, contractors, sales reps, and other stakeholders are now made through digital channels. This has resulted in a need for a scalable payment system with capabilities to adjust and tailor payment programmes to customer needs. Once they have a payments platform in place and can concentrate on using payments strategically, organisations no longer have to rely on developing payment solutions from the bottom up.

BNP Paribas, a leading bank in Europe with a presence in over 70 countries, wished to transform its payments infrastructure to improve its cash management capabilities and process a high number of transactions. Faced with challenging timelines, they committed to deliver on a transformation strategy for their architecture and technology, starting with implementing instant payments.

For this endeavour, the bank selected Icon Solutions. Icon is a leading specialist provider of services and technology solutions that are simplifying banking transformation. With a proven record delivering mission-critical solutions for global institutions, it combines industry-leading domain experts, services, and accelerator assets with technology that empowers customers to solve problems, fight complexity and embrace change.

Project and Solution Overview

There were several key expectations that the bank had from the IT solution provider.

• Develop a refined business and IT strategy which identified the key business drivers needed to maximise the value of cash management and its impact on payments architecture
• Design an architecture for the execution of payments that supported future business needs
• Deliver an assessment of the current data hub roadmap in relation to the target architecture
• Build a modern, cloud-native payments platform consisting of a payments engine, a data hub, and API-based connectivity
• Develop scenarios to migrate existing payment types, such as SEPA CT, SEPA DD, High Value Payments, from the current legacy systems to the new platform, with clear benefits and rationale

Icon deployed a team of experts to work in collaboration with the bank to meet these requirements, delivering a:

• Market study on current trends and recommendations for the target architecture
• Updated future state architecture aligned with the bank’s vision
• Roadmap for transformation which identified requirements for successful delivery
• Transformative architecture based on IPF to deliver at speed but with reduced risk

The project was underpinned by the Instant Payments Framework solution (IPF) – Icon’s low-code, cloud-native, open-source technology platform that accelerates payments transformation. IPF simplifies the complexities of payments and focuses on the fundamental requirements necessary for a successful payments modernisation strategy

It is a highly cost-effective, collaborative payments platform that combines open-source technology with lightweight integration and processes payments at a fraction of existing costs. It offers banks an alternative transformation approach that addresses both critical nonfunctional and functional requirements.

Unlike traditional payment hubs, IPF enables a safe, low-risk approach to transformation. It also allows for the deployment of new products and value-added services quickly, cost-effectively, and reliably. This helps deliver more value and unlock new revenues while lowering costs and risk.

Implementation Process
The collaborative delivery model was supported by hybrid teams, bringing together the bank’s and Icon’s resources. Early phases saw Icon taking the leading role in the development and delivery, but as the programme progressed, Icon transitioned to a supporting role as BNP Paribas became more self-sufficient.

In the first phase, Icon took primary responsibility for deploying the IPF product, creating the specific integrations and payment flows. The Icon core delivery team in this phase comprised of four engineers, a business analyst, an architect, a project manager, and a scrum master, working in a
mixed team with bank resources.

Fast, simplified, and repeatable rollouts with a strong, continued partnership for the future were key to the success of the programme. Empowering the bank to self-deliver and reducing their reliance on Icon illustrated this.

BNP Paribas and Icon adopted a collaborative delivery model working as partners to achieve this target. Specific considerations made were:

• Route to live planning – Managing scheme dependencies, testing cycles, and appropriate go-live phasing with the business were key. Ensuring this was a repeatable process drove efficiency across regional rollouts.
• Planning for the non-functionals – The clear definition of nonfunctional requirements, particularly around interfaces, security, and exception paths, was crucial up-front.
• Meeting the global scale – Close engagement between the central project team and local business was key, ensuing their full buy into both the operational model and project approach.

Benefits Achieved

As a result of the project, BNP Paribas made fundamental progress towards their goal of significantly reducing the cost of payment transaction processing whilst positioning themselves for success in the increasingly competitive payments market. Icon enabled the bank to meet its transformation challenge through the fast-track deployment of IPF for its new payments engine. This included two major milestones: full system certification and the successful processing of transactions for the first European SEPA Inst scheme, which were both delivered within six months.

IPF’s open-source technology stack is being used as a common platform across countries, resulting in significant ongoing operational cost savings compared with their previous legacy platforms. IPF is now being leveraged for additional instant payment rollouts.

BNP Paribas is also migrating legacy payment capabilities, such as traditional SEPA payments. By reducing vendor dependency through a collaborative delivery model, implementation and change could be accelerated, and costs lowered, positioning the bank to better serve its clients.

Other benefits observed as a result of this implementation include:

• Reduced total cost of ownership (TCO)
• Connection and execution of payments on new schemes in months
• Scalability to support high volumes
• Customised payment flows without code
• Seamless integration

Key highlights of the project include:

• Deployments across four markets (Belgium, France, Italy, and Hungary).
• Deployment across three instant payment schemes (STET, RT1 and GIRO).
• STET country-wide implementation in Belgium and France in record time
• RT1 country-wide implementation in Italy followed shortly after Belgium and France, then Hungary.
• Full target state covers multiple payment types and increased volumes from the pre-project state.

Conclusion

This project enabled BNP Paribas to respond to future needs such as growth, volatile transaction volumes, and the deployment of value-added services with greater speed and at a significantly reduced cost.

Key Facts:

• Supplier: Icon Solutions
• Headquarters: United Kingdom
• Founded: 2009
• Client: BNP Paribas
• Solution:  IPF (Instant Payments Framework)
• Timeline: Three-year phased rollout