{"id":4779,"date":"2024-01-12T10:27:50","date_gmt":"2024-01-12T10:27:50","guid":{"rendered":"https:\/\/zv3d.wpengine.com\/us\/?p=4779"},"modified":"2025-01-29T15:31:54","modified_gmt":"2025-01-29T10:01:54","slug":"5-ways-modern-card-tech-drives-business-value-for-issuers","status":"publish","type":"post","link":"https:\/\/www.zeta.tech\/us\/resources\/blog\/5-ways-modern-card-tech-drives-business-value-for-issuers\/","title":{"rendered":"5 Ways Modern Card Technology Drives Business Value for Issuers"},"content":{"rendered":"

The landscape of card technology is shifting rapidly, fueled by advancements in digital payments, evolving consumer expectations, and a growing competitive landscape. Banks face a critical decision: modernize their card processing systems or risk falling behind.<\/p>\n

With outdated systems threatening revenue and agility, banks may see a significant impact on revenue if they do not adapt and invest. The Datos Insights (formerly Aite-Novarica) Group1<\/sup><\/a> estimates that revenue at risk for retail banks that do not focus on modernization could be 10% to 15% of retail bank payments revenue annually, or $100 billion to $150 billion globally.<\/p>\n

However, conversations about moving to modern card processing systems must go beyond leveraging the cloud or using new technology. The next generation of card processing is about enabling new business models for issuers and launching products that meet innovative use cases.<\/p>\n

Most boards wrestle with prioritizing such a significant shift over other operational considerations. Apart from the challenge of proving the urgency of such a move, the risk of disrupting traditional processing workflows must be evaluated against possible benefits. This blog presents a value creation framework to demonstrate how the 10 dimensions of next-gen issuer processing overcome the shortcomings of legacy systems to help banks achieve 5 value outcomes.<\/p>\n

5 ways next-gen processing adds value<\/b><\/h2>\n

The premise of next-generation issuer processing is straightforward. It allows banks to transform into genuinely digital-native organizations that build stronger customer relationships and enhance revenue while significantly reducing IT and operational costs.<\/p>\n

Compared to legacy processing systems, which were deployed when cloud, mobiles, or even the internet did not exist, next-generation technology is inherently connected, scalable, and composable. For example, while legacy processing platforms have a monolithic architecture with hard-coded objects and poor API coverage, next-gen issuer processing systems are powered by a Microservices, API-First, Cloud-Native, Headless (MACH2<\/sup><\/a>) core that allows near-infinite scalability and extreme integrability – in turn enabling rapid innovation of products with seamless connectivity with the larger financial services ecosystem.<\/p>\n

You can read our white paper on modernizing card technology platforms<\/a> for a fuller drill-down into the 10 capabilities that differentiate next-gen issuer processing from legacy processing.<\/p>\n

Image 1<\/p>\n

\"How<\/p>\n

Let\u2019s evaluate how specific differentiators of next-gen issuer processing can help banks drive cost savings, accelerate time to market, drive stronger compliance, enhance customer delight, and boost revenues (image 1).<\/p>\n

1. Drive cost savings<\/span><\/h3>\n

A McKinsey report found that operating costs of fintech banks powered by next-gen core platforms are around <\/span>10 percent<\/b> of the operating costs of traditional banks3<\/sup><\/a><\/span>. Specifically, next-gen processing platforms enable cost savings through:<\/span><\/p>\n