In a recent episode of Volante Elevate, Vinay Prabhakar, Chief Marketing Officer at Volante Technologies, spoke with Dan Pilling, Executive Advisor in Payments and former CIO of Barclays, about the challenges and opportunities in payments technology modernization. This blog post summarizes their conversation, providing insights into how banks can approach the build versus buy decision in payments technology. To get all of the insights from this conversation, listen to the full interview on the Volante Elevate podcast.

Q: Can you tell us about your background and experience in payments?

Dan Pilling: I’ve spent over 30 years in the payments industry, starting in payment operations where I learned the fundamentals of payment flows. After moving through various technology roles and management consultancy positions, I joined Barclays in 2007 and served as the payments CIO for seven years. In this role, I had global accountability for payments applications across the UK, Europe, Asia, and the US, managing approximately 1,200 people across multiple geographies and overseeing about 100 systems and 80 change programs annually.

Q: How do you approach budget allocation for payments technology?

Dan Pilling: Budget allocation is underpinned by a three to five-year bank and payments strategy. We categorize change into several buckets:

1. Keep The Lights On (KTLO): Essential maintenance and updates

2. Mandatory/Industry Change: Such as ISO 20022 or instant payment schemes

3. Business-Driven Change: New products, geographies, or features

4. Regulatory/Compliance Change

About 75-80% of the budget typically goes to must-do changes (KTLO, industry, regulatory), while only 20-25% is available for discretionary business changes.

Q: What are the key considerations in the build versus buy decision?

Dan Pilling: The decision varies based on several factors:

1. Payment volumes and importance to core business

2. Technology capabilities within the bank

3. Revenue generation potential

4. Competitive differentiation needs

Buying solutions makes more sense for banks where payments are not core business or volumes are low. However, if payments are central to the business and there’s strong technical capability, building might be preferred. Most banks end up with a hybrid approach, combining both strategies.

Q: What are the advantages of buying versus building payment solutions?

Dan Pilling:

Buying solutions, especially payment-as-a-service offerings, provide:

– Faster time to market

– Reduced compliance burden

– Better scalability through cloud infrastructure

– Regular updates handled by the provider

Years ago, what could have been a multi-year, tens-of-millions of pounds project is now something that can be available to a bank relatively quickly and cheaply, thanks to PaaS offerings.

Building solutions offers:

– Greater control over capabilities

– Ability to create competitive advantages

– Retention of intellectual property

– Direct control over change implementation

Q: What should a modern payments platform include?

Dan Pilling: If I were to limit it to 5, I’d go say:

1. Cloud-native and cloud-agnostic architecture

2. Full ISO 20022 compliance

3. Comprehensive API connectivity

4. Low-code/no-code capability for extensibility

5. Modern integration tools

These features enable banks to combine the benefits of bought and built components while maintaining efficiency and competitive advantage.

Q: What advice would you give to a new payments CIO?

Dan Pilling:

In your first 90 days focus on:

1. Evaluating your current landscape of people, systems, and vendors

2. Identifying key risk areas

3. Working with stakeholders to build a three to five-year plan

4. Looking for opportunities to modernize the estate quickly and safely

5. Being creative with budget allocation to maximize impact

Most importantly, remember that while speed is crucial, reliability is paramount – you’ll never be thanked for an outage.

Conclusion

The build versus buy decision in payments technology isn’t binary – most banks benefit from a hybrid approach that combines bought commoditized services with built competitive differentiators. With modern technology platforms offering greater flexibility and integration capabilities, banks can now choose the best of both worlds to create efficient, competitive payment solutions while managing costs and complexity effectively.

Listen to the full interview on the Volante Elevate podcast.