The hub connects at one end to a bank’s customers, regardless of channel or line of business, and at the other to any clearing and settlement network, handling the interface with each side, negotiating the rules, handling exceptions and providing end-to-end processing of the payment.

Additionally, a next-generation payment platform includes features such as being highly customizable. Banks can adapt and configure their hub based on their needs as well as provide visibility, data and reporting on payments in real-time to multiple stakeholders through advanced analytics. One good example of how new payment platforms can support new products: the availability of analytics as a core component of next generation payment delivery. Besides reporting and monitoring, analytics are responsible for a number of services running in the background of payment hubs such as risk mitigation and automatic payment routing. By harnessing analytics banks have the potential to build break-through products across multiple lines of business.

Traditionally, most financial institutions have based their payment technology, systems and resources on particular types of payments or lines of business such as commercial payments, credit cards or electronic funds transfers. Individual solutions handle distinct LOBs. This has been a piecemeal, but workable, approach dedicated to the individual needs of those LOBs. Unfortunately, this has also been an approach fraught with duplication, overlap and inefficiency, and a solution ill-suited for an environment where banks are under pressure to update those legacy systems.