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Payments have always been fundamental to banking—but today, they’re mission-critical. Virtually every banking institution’s core transformation efforts now depend on being able to support modern, scalable, intelligent payment capabilities. Without them, broader digital, customer, compliance, and revenue strategies stall.
This isn’t simply a matter of preference; it’s structural. Core initiatives such as ISO 20022 compliance, 24/7 real-time settlement, open banking readiness (e.g., Section 1033), and treasury modernization all intersect at payments. Regardless of where a bank starts, payment capability sits at the critical path.
Over 70% of financial institutions’ IT transformation programs include at least one payments-related overhaul, according to Capgemini Research Institute’s 2023 World Payments Report. That’s because the ability to move money efficiently, securely, and contextually now represents the difference between a legacy operation and a competitive digital enterprise.
For regional and national banks, the risk is pronounced. Payments have long been a consistent source of fee income, customer retention, and operational leverage. But that advantage is eroding. As customer expectations shift and digital-native competitors expand, payments are becoming a battleground for relevance. Without decisive action, institutions risk falling behind in ways that will be difficult—and costly—to recover from.
For decades, payment systems evolved gradually. Now, they’re transforming rapidly. The shift to real-time networks, the rise of embedded finance, emerging security threats, and new regulatory mandates are combining to reshape what it means to be a payments provider.
Modern customers clients and customers no longer separate “banking” from “payments.” They expect instant, invisible, integrated experiences—whether disbursing payroll, reconciling treasury flows, or splitting a dinner bill. At the same time, regulators are demanding better transparency, richer data, and improved interoperability.
Banks that once upgraded their payments infrastructure every few years now face continuous pressure to evolve. Real-time rails are becoming baseline expectations. APIs are replacing file uploads. And the value is moving from transactions to insights. For many institutions, the question isn’t whether to change—it’s how fast and how comprehensively they can modernize. This requires not only investment but a shift in mindset from payment execution to payments as a platform.
Experts across this space recommend the following key strategies to successfully make that shift and stay ahead of the curve.
1. Modernize your core payments infrastructure. Many banks run on aging platforms built for a slower, batch-oriented world. These systems are expensive to maintain, slow to adapt, and difficult to scale. They’re also increasingly misaligned with regulatory expectations and client demands.
Modernizing the payments core involves a shift to cloud-native, API-enabled, modular architectures that support:
This modernization is not just technical—it’s strategic. A future-ready payments core allows you to launch new products faster, support regulatory agility, and embed capabilities directly into client workflows. It also reduces per-transaction costs and enables end-to-end process automation.
Use case—improving speed and customer experience: A regional institution transitioned from a fragmented, paper-intensive disbursement process to a digital-first, multi-rail payments platform. By replacing checks with faster payment options—such as real-time payments and same-day ACH—and introducing intelligent rail routing based on cost and settlement urgency, the institution significantly improved both speed and customer experience.
It further implemented a centralized payments hub that acts as the orchestration layer for all transaction flows. This hub now enables greater operational flexibility to integrate with future fintech providers, corporate platforms, and vendor ecosystems—without requiring major rewrites to the core. The platform also includes integrated verification and fraud detection tools to support compliance and transaction security in real time.
2. Embed payments into your clients’ ecosystems. Clients increasingly expect financial workflows to be seamlessly integrated with their operational systems. In today’s environment, “embedding” doesn’t always mean appearing in the user interface—it can refer to enabling payments as part of a broader process, platform, or ecosystem.
Banks may not embed payments within client-facing applications in the same ways that fintechs or consumer platforms do. But they play a critical role in ensuring embedding capabilities behind the scenes—whether within enterprise workflows, partner platforms, or vertical ecosystems. In banking with a healthcare vertical, for instance, this includes integrating deeply into the revenue cycle process. In commercial banking, it may mean powering embedded treasury services directly within a corporate’s ERP system.
To meet these expectations, you must offer:
Use case—embedding within a vertical ecosystem: A national bank partnered with a healthcare revenue cycle management provider to deeply integrate its payment services into the revenue cycle. Instead of embedding within an app interface, the bank enabled seamless financial orchestration across core billing workflows. Its capabilities included digitizing inbound paper payments and remittance documents, automating exception handling through AI and optical character recognition, and synchronizing transaction data directly with provider billing systems.
Although not embedded in the front-end application sense, the bank’s role was functionally embedded within the healthcare revenue ecosystem—powering the movement, matching, and reporting of funds in lockstep with claims and collections processes. This allowed healthcare organizations to reduce days sales outstanding, improve cash flow visibility, and simplify reconciliation across payers, patients, and systems.
By aligning with the operational cadence of the healthcare ecosystem, the bank positioned its services not as standalone products but as critical infrastructure for workflow automation and revenue enablement.
Use case—using B2B platform integration for classic embedded payments: A regional bank partnered with an enterprise software provider to offer white-labeled embedded payment functionality within its ERP platform. Through a set of secure APIs and client onboarding workflows, the bank enabled in-context payment initiation, approval, and reconciliation directly from the ERP’s interface—without users having to log into separate banking portals.
Clients could pay vendors, run payroll, and manage cash flow within the systems they already used. The bank powered the underlying rails and compliance, while the ERP owned the user experience. This extended the bank’s commercial reach, generated fee-based revenue, and deepened client integration – all without requiring a separate banking as a service infrastructure.
By implementing this arrangement, you can generate new fee-based revenue and expand your reach into previously untapped middle-market segments—all with the attraction of invisible infrastructure, visible value, and meaningful share-of-wallet growth through platform partnerships.
Use case—enabling corporate-led orchestration in a regulated sector: A corporate operating within the mortgage services sector sought to modernize how it manages disbursements, reconciliations, and trust account oversight while retaining full control over its customer experience and internal workflows. Rather than relying on an external ERP or vertical SaaS provider, the company built and maintained its own platform, integrating directly with internal finance systems and compliance processes.
To support this model, the company connected directly to a regional bank’s payment infrastructure via APIs to initiate transactions such as wires and ACH payments, manage trust and escrow accounts, and enable automated reconciliation workflows. The bank provided the underlying rails, settlement capabilities, and regulatory infrastructure, while the corporate retained ownership of user interfaces and business workflow orchestration.
In this setup, fraud and risk controls were shared across both organizations. The corporate layered in pre-transaction logic such as user access controls, payment approval routing, and recipient validation within its platform. The bank contributed downstream capabilities including regulatory screening, transaction-level monitoring, and account-based fraud detection—ensuring compliance across the entire payment lifecycle.
Unlike traditional embedded finance, where a third-party platform mediates between the bank and users, this model reflects corporate-led orchestration. The business acted as its own integration layer, embedding banking capabilities within its proprietary operating environment. The bank’s ability to offer integration-ready services, accommodate vertical-specific workflows, and align to shared risk models was essential to enabling a seamless experience.
This example illustrates how you can remain highly relevant by powering regulated, complex ecosystems – not by owning the interface, but by enabling infrastructure that supports client-owned journeys and distributed risk accountability.
3. Rethink fraud and financial crimes management with AI. With faster payments comes faster fraud. As settlement times shrink, so do the windows for identifying and responding to suspicious activity. Traditional fraud systems based on static rules and batch processing can’t keep pace with today’s velocity.
Taking an AI-driven approach to your fraud and financial crime management offers several advantages, including:
But implementing AI in this context requires more than just the right tools. It demands strong data governance, centralized observability across systems, and operational readiness for rapid response. Investing in intelligent controls not only helps reduce your losses—it improves customer trust and regulatory standing.
The opportunity isn’t just reducing fraud – it’s elevating fraud prevention into a competitive differentiator. Real-time assurance demonstrates resilience, builds trust, and reinforces industry leadership – as customers are increasingly sensitive to how their money is protected, this marks a defining new dimension of brand value.
4. Monetize data with intelligence-driven services. Every transaction creates a data signal. The challenge comes with optimizing your ability to turn data into insights and insights into monetizable services. Many institutions underutilize their payments data, missing opportunities to:
Monetizing data isn’t about selling it—it’s about using it to improve outcomes for clients and enhance your advisory capabilities. As competition rises, the banks that provide smarter services—not just faster ones—will win. By offering predictive cash flow forecasting or invoice cycle optimization, you move up the value chain from processing payments to powering smarter business decisions.
5. Use strategic partnerships to accelerate innovation. No single institution should build everything in-house. Payments innovation is increasingly ecosystem-driven, involving technology platforms, infrastructure providers, and digital channels that extend far beyond the four walls of a traditional bank.
Pursuing strategic partnerships allows you to:
Successful partnerships require a shift in mindset from control to collaboration. They also demand technology readiness, flexible contracting, and strong risk oversight. When done well, these partnerships can become growth multipliers and innovation catalysts. Experts recommend defining a dedicated payments ecosystem lead role to coordinate partners, ensure alignment with core architecture, and accelerate roadmap delivery.
As the payments landscape evolves, forward-thinking institutions are reimagining payments not as an operational burden but as a source of strategic advantage. Future-ready banks are expected to:
This evolution requires bold vision and precise execution. You need to think differently—not only about technology, but about operating models, go-to-market strategies, and client engagement across every segment.
It’s become clear that payments are no longer just a back-office utility. They’re a litmus test for a bank’s digital maturity, customer centricity, and operational agility. Leading with payments innovation will help you unlock growth, trust, and competitive resilience. If you treat payments as an afterthought, you may find your institution surpassed by more agile players.
As the market reshapes itself around real-time experiences, intelligent services, and embedded ecosystems, the payments imperative becomes clear. Act now or risk falling behind. This is a moment for bold investment, forward-thinking strategy, and a unified approach to modernization. The future of banking will be built on how well institutions move money—and everything that moves with it.
Hoan Wagner, Director
Guidehouse is a global AI-led professional services firm delivering advisory, technology, and managed services to the commercial and government sectors. With an integrated business technology approach, Guidehouse drives efficiency and resilience in the healthcare, financial services, energy, infrastructure, and national security markets.