Top view of man using request to pay app in his office

In boardrooms around the UK banking industry, one topic raising its head is how to join the race for digital platforms.

The digital platform based business model

Digital platforms are one of the hottest business topics in 2021. Tech startups are including the phrase in investor decks, and mature corporates are booking COVID safe offsiters to decide on the implications for their business models.

The simplest way to describe this new digital paradigm is to pull out some examples—airbnb, Uber, JustEats… app platforms that bring access to services the provider doesn’t own. Yet this new layer in markets builds a new community-centric place to go for the offerings they focus on. As Deloitte puts it in a recent report,

“In the digital economy, you can become a driver without owning a taxi, a hotelier without owning a hotel, or a bookseller without owning a bookstore.”

What customers value is the interface providers offer that make for painless access to the unique experiences they’re hunting for. How it works is pure hygiene. Market watchers suggest, digital platforms signal the death of the vertically integrated business model—where the banking value chain stretches from production to sales, distribution and servicing.

digital money concept banking

Platform choices in the financial services industry

Banks and banking system providers must decide how to embrace the platform-based business model, either as an active participant on someone else’s platform, or by building their own.

Adopting a platform-based model can be difficult for mature organisations, particularly with so much technical capability internally. Financial services firms have become app innovation factories in their own right over the past decade. In 2016, the Chief Exec of Barclays, Jes Staley, famously described Barclays as a technology company with a balance sheet and regulators, arguing that, ‘having the right technology in place is a critical obligation for Barclays.’

Digital teams will instinctively look upon new digital trends with wide eyes, anticipating another opportunity to show their steel and bring value to their internal stakeholders. Tech leaders want to ‘go build’—it’s how their DNA works. But, sometimes this decision happens inside the IT cell without the organization fully considering the commercial implications of such a decision.

In a digital age, some IT choices aren’t just tech decisions—they form part of the customer value an organisation serves up.

As Finbarr Joy, a Technology Advisor to the Financial Services industry and Non Executive Director of Answer Pay puts it, ”I’m one of those techy people who hears about an innovation like Request to Pay and, having understood its value, starts looking into how to build it. On the face of it, technology solutions RtP become ‘just another API,’ but these sorts of developments can quickly become a distraction. The pressure is on for IT leaders to ace their core business outcomes, and APIs can burn time and resource beyond their commercial value.”

The need for speed

While in-house resources for digital transformation have grown considerably over the last few years, demand for digitisation and re-platforming has grown significantly faster in the financial services industry. One reason for this has been the long tail of legacy systems refreshes and upgrades to core banking systems that have plagued finance houses. This constant resource drain has led many organisations to install dedicated fast-track digital teams.

In the digital age, speed of innovation is everything. Organisations accustomed to adapting their business model once every five or ten years now face regular whiteboard sessions to revisit their underlining business strategy and how it levers technology to deliver more customer value and profitability. Andrew Lawrie is CTO for NDMC Consulting. He is a recognised pioneer of the low-code software development revolution, having authored the Encanvas enterprise low-code platform. As Lawrie explains, “Our clients are transitioning away from agile teams to low-code software platforms to increase their pace of development. Even so, there are always more demands from businesses for apps and platform enhancements than DevOps teams can reasonably cope with. Businesses want to see step-change compound changes in their digital ecosystem that have a profound impact on customer experience.”

man using rtp payment app on tablet

Why it makes commercial sense for banks and financial service providers to adopt a ready-made Request-to-Pay (RtP) platform

Request to Pay is a set of protocols for establishing a payments messaging platform for integration with the mobile apps of banks and service providers. It’s build around a set of approved operating, messaging and interoperability protocols that are being adopted by the UK’s financial services industry, and a European equivalent (SEPA Request to Pay) has been launched this year.

It’s interesting because increasingly, people want to run their lives from their mobile phones. Traditional ‘Pay by Link’ solutions expose bill payers to data security threats. Additionally, they contradict advice given by the financial services industry (for over a decade) telling consumers to not click on links that might not be secure!

Adopting Request to Pay for bill payments is a no brainer to UK companies and banks, because it’s convenient for bill payers, offers new ways to engage with customers through mobile apps. This adds value to apps as it gives bill payers empowerment to choose which bills to prioritise—key to supporting the financially vulnerable.

For the financial services industry, the conversation is not if but when to adopt RtP.

Why Request-to-Pay is one of those solutions you buy off the shelf

Given Pay.UK has worked to produce such a well documented set of guidelines to implement the RtP protocol, why shouldn’t financial services companies opt for the ‘Build’ option?

Peter Cornforth, Operations Director for Answer Pay thinks it’s a journey that presents developers with a series of potentially derailing bear-trap challenges. “Answer Pay was the first company in the UK to develop a working Request to Pay platform certified by Pay.UK, so we know a thing or two about the complexities. As RtP operates within a highly regulated industry, with complex back-office handshaking protocols for any communications approach, the development is unlike any I’ve personally encountered.”

Answer Pay now assists other banks and service providers to implement their own RtP solutions by installing SPX ™, its white-label SaaS solution. SPX™ acts as the keystone of the Request to Pay ecosystem. As Cornforth explains, “It manages the identities of participants and securely routes bill payment messages to the correct destinations, seamlessly connecting invoice management systems with bill payment applications.”

Joy believes IT teams will always consider the build option for new interoperability solutions, but his advice is to investigate off-the-shelf RtP options like SPX™ first before doing so. “With a traditional API, you’re chiefly only focused on the technical challenges, but with RtP it’s more of a market-place and ecosystem; a cog in the financial services plumbing that drives payments. Fail to get the regulators onboard, certify the connections, and satisfy the various stakeholders and it won’t matter how good your tech is, you won’t be able to use it,” he says.

Ian Tomlin

Ian Tomlin


Ian Tomlin is a marketer, entrepreneur, business leader and management consultant. His passion is to help make great ideas happen. Relentlessly optimistic about the potential of technology for good, Ian’s 30+ year career has focused around the intersect of strategy, technology and marketing. He writes on subjects including workforce management, future of work, talent acquisition technology and organizational design.
Ian has written books, articles and guides on brand, digital transformation, enterprise applications, data science, and organizational design. He can be reached via LinkedIn or Twitter.