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PA OPINION

How Nets is unlocking opportunities by developing a new payment platform

Legacy transfer and tech renewal are hot topics in financial services. With project UNI, Nets is building a modern payment platform from scratch, seeking to meet new customer expectations and make the firm fit for the future.

We invited Jørgen Stråtveit, Country Director Nets Norway, and Frederik Rønn, Director of Architecture at Nets Group, to talk about how the firm will unlock new commercial opportunities through UNI and what others in financial services can learn from the project.

In a nutshell, what is the platform, and what is its purpose?

UNI is our new platform for real-time processing, scheme clearing and settlement for both issuing and acquiring. We are building a new system from scratch, combining our accumulated know-how from decades of building and running the existing platforms with new technology. Our goal is to cover our customers’ needs in terms of flexibility and modularity while ensuring economies of scale.

What’s the background and rationale for building a new platform?

Some time ago, we had an all-staff meeting in which UNI was presented together with our ambition of becoming a ‘European champion’. One of our colleagues stated that “you don’t win European championships with 20-year-old code.”

And there is some truth to that – to win customers outside the Nordic market, we needed to differentiate ourselves and create something new. Generally, we see that our customers demand more features and functionality all at a lower cost.

Our old platforms have proven stable and efficient for many years, but they were not designed to meet today’s expectations regarding openness, flexibility and modularity.

Why did you decide to build the platform in-house, rather than buying a third-party solution?

Since the start, we wanted to develop our systems in-house. We had up-to-date and relevant experience, and wanted to own the IP rights and have full control over the tech stack. With that being said, the buy-or-build question was explored through a comprehensive evaluation process, and the final decision was based on a thorough evaluation of all available options.

In the end, the decision to develop the platform in-house was partly driven by a need and desire to differentiate, but also by the fact that we have a long tradition of building our own systems in Nets and could take advantage of extensive internal knowledge and experience.

Can you provide some insights regarding the platform’s underlying technology?

We have built the platform as a modular solution and have been thinking along the lines of a microservices structure. Not necessarily defining microservices by the size of the service itself, but in a broader sense where they perform different logical functions. Moreover, we use container technology and have placed our container on the application platform OpenShift. The programming language we use is Java, which was a natural choice as there are many skilled programmers with long experience developing Java solutions in Nets.

We have also chosen persistence and database technologies that comply with our overall selection criteria: stability, reliability and scalability. It’s essential to have robust systems in case of errors on networks or critical infrastructure.

Large projects like UNI are seldom finalized without facing challenges. How would you describe the development process?

For those of us involved in the project on a day-to-day basis, it has seemed like time re-planning and solving crises have dominated. However, if you were to ask someone with less hands-on responsibility, they would probably say the process went quite smoothly and everything went according to plan.

I think the way we chose to develop UNI has been essential for its success. We used the Scaled Agile Framework, with multiple independent teams working on separate features and components. This has allowed us to take different solutions to market early, rather than a big bang release.

What has been your winning formula?

Large development projects have failed before, both in other firms and within Nets. What has made a big difference in this project is that a need for improving commercial opportunities drove it. Success is easier when you do the project to achieve commercial growth goals, rather than if you were to run the project with the sole purpose of improving IT or the technology stack.

Technology and IT are, of course, important elements, and you get to simplify and clean up internal processes, but the main goal is commercial growth. Furthermore, it’s also important to mention that this is the first project in Nets where we worked agile at this scale, which has been a critical success factor. So, to answer your question, our winning formula is an IT-heavy project, run by business incentives with an agile mindset.

What has customer feedback been like?

As of today, the main UNI launch is our new clearing and settlement functions, which customers, in general, don’t notice. Customers will probably experience a greater degree of added value when we launch the entire sewn-together solution this autumn.

That said, we have launched several pilots and smaller market relevant products during the development. These have represented a new way of delivering products to customers and have been extremely well received. The fact that you can run a one-to-many deployment, rather than one-to-one, with larger technology implementations is probably the biggest positive change that customers will experience.

What advice would you give other financial services that are considering a major tech renewal?

The most important thing is that you can show results along the way and get partial solutions to the market continuously and early in the process. It’s all about building up gradually. You don’t reach the scale we have with UNI in three months, so it’s important to show progress and results.

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