Opus CEO on the Power of AI in Redefining Payments and the Industry Outlook for 2024

The evolution of the digital economy demands faster, richer and more secure payments and the role payment technology plays cannot be overstated. Opus Technologies, a payments technology provider with more than 26 years of industry experience, is well-positioned for the future. Opus has executed large-scale digital transformation projects for some of the biggest banks in the US. The company understands the complexities and risks associated with legacy applications and excels at developing an effective modernization strategy.

American Banker recently sat down with Praveen TM, the CEO of Opus Technologies, to understand his views on the changing landscape of the payments industry, the latest trends on the horizon and the potential of AI in the evolution of the digital economy. What follows is an excerpt of the conversation.

How would you characterize the current state of innovation in the payments industry?

Many financial experts believe that the payments industry is heading towards a saturation point in terms of technology intervention. We have witnessed the FinTech revolution explode in the last few years, and they have done a great job at simplifying customer experiences. However, there's still room for improvement at multiple levels.

I would like to look at innovation from the lens of market drivers. For example, the macroeconomic conditions in 2023 forced many companies to focus on operational efficiency rather than growth. They had to manage costs, risks, and service quality to maintain their market share. Also, consumer awareness was a critical factor in this shift. Modern consumers are more aware of the time value of money, checkout experiences, and safety concerns. These factors will shape the future of innovation in the industry.

How would you summarize 2023 for Opus Technologies?

2023 has been a transformative year for us. We have rebranded from Opus Consulting Solutions to Opus Technologies to accurately reflect our positioning as a strategic partner for banking and financial institutions. We are a trusted advisor, helping clients achieve their long-term goals through active planning, technology integration, and delivery excellence. We focus on enabling clients to adopt AI-first solutions to improve payment operations, lower costs, and increase customer satisfaction.

Opus has achieved some remarkable milestones this year. We have added new global clients to our portfolio and launched our next stacks of innovative payment and banking solutions, which leverage the latest technologies such as FedNow, blockchain, and omnichannel commerce. We have strengthened our partner ecosystem with the likes of Google Cloud, AWS, Microsoft, Databricks, Stripe, Salesforce and Checkmarx.

Going forward, we plan to grow our workforce by 50%, hiring talented people who share our vision. We are also looking to enter new markets and explore new opportunities.

We are proud of our journey so far, and we are excited for the future. We have a rich history of niche technology implementations and a culture of innovation and excellence. We are always ready to face new challenges and deliver value to our clients.

How is Opus playing a role in the evolving payments landscape?

We are at the center of the banking and payments revolution. As a leading payment technology solution provider, Opus Technologies works with both banking and non-banking financial institutions.

For banking institutions, our primary offering is the modernization of the legacy infrastructure. Many large banks rely on outdated systems, at least in part, that limits their capabilities and efficiency. Traditional rail infrastructure doesn't offer the scalability, agility, and performance required for modern applications. Opus Technologies helps them embark on a digital transformation journey that enables them to provide modern payment experiences to their customers. We facilitate integration with upcoming payment technologies, such as instant payments and buy-now-pay-later, that offer convenience and flexibility. We encourage them to use APIs, serverless architecture, microservices, cloud-native frameworks, and data services to enhance their performance and security.

Banks that have overcome initial modernization challenges are leveraging improved digital enablement capabilities to build their own solutions and deliver greater value to customers. Opus helps them better align with evolving customer expectations and thrive in today's competitive landscape by focusing on infrastructural upgrades and prioritizing operational efficiency and service excellence.

For non-banking institutions or FinTechs, we enable them to discover differentiated use cases and business models. We partner with them to create innovative solutions that address the needs and preferences of their customers. We use our niche industry experience, creative thinking, product engineering, and technology expertise to deliver value-added services that set them apart from the competition. This includes diversifying payment channels based on cutting-edge technologies, such as blockchain, AI, and deep analytics while ensuring regulatory compliance and superior security.

What are your thoughts on the launch of FedNow Service?

FedNow is poised to revolutionize the U.S. payments' landscape by enabling customer-centric use cases, such as instant peer-to-peer payments, bill pay, and e-commerce transactions. Along with that, the FedNow framework will ensure fraud prevention, liquidity management, and message standardization, which is all crucial toward the modernization the U.S. payments system.

Opus Technologies is an early participant in the FedNow Pilot Program and provides expert end-to-end FedNow integration services, including gap analysis, use case identification, and developing an implementation roadmap that accelerates development time, lowers costs, and mitigates risks.

Looking ahead, which technologies have the most potential for the payments space?

Buy now pay later is having its moment right now as a large share of consumers opt for digital payments. We are also very bullish on instant payments. However, AI is going to be the game changer in the financial industry. It has many benefits. For example, AI can improve the way money moves and customers interact with financial services companies. AI can also automate processes, reduce costs and optimize transaction routing.

AI also has many potential use cases for the BFSI industry, such as automating customer onboarding, virtual assistance, and code generation. Additionally, AI can help with data-based decisioning, such as creating synthetic datasets to train AI/ML models for credit risk assessment or anti-money laundering. These solutions can lower operational costs and enhance customer experience.

However, AI is an evolving technology and financial institutions have to be mindful of data security concerns and regulatory norms.

Given you believe AI is the future of payments, how is Opus Technologies gearing up for this shift?

Opus Technologies is a leader in AI-first, Cloud-first solutions for the financial sector. We help financial institutions accelerate their AI adoption and leverage the power of data to drive critical business decisions. Many companies are experiencing early adoption issues with AI, such as a lack of adequate tools and expertise, data complexity and quality, and scalability and reliability issues. We assist our clients in overcoming these challenges by identifying gaps and providing an actionable implementation roadmap that encompasses data preparation, model development, and model deployment.

We build a resilient, flexible, and modern data ecosystem that offers a unified data marketplace and data-as-a-service capabilities. We also support them in setting up integrated data governance policies to ensure security and compliance with industry regulations.

Where do you think banking and FinTech are headed in 2024? What's next in payments?

ISO 20022, a global standard for payment messages, remains a top priority for financial institutions in 2024. It enables contextual data flow in payments and reduces friction points, streamlining cross-border transactions. The key opportunity lies in how financial institutions can use ISO 20022 data to offer better payment experiences to retail and business customers. We also see blockchain and distributed-ledger technologies coming into play to ease cross-border payments in the near future.

While AI is poised to play a larger role in 2024 but its implementation raises genuine concerns. The government will scrutinize AI-related implementations and their impact on consumers, monitoring for potential unfair or harmful implications. Existing federal laws apply to AI activities, and regulations are likely to emerge soon.

In this evolving landscape, it is critical to understand how we use AI, collect and use data, and mitigate risks for businesses and consumers. Data privacy is a key concern. Apart from regulatory compliance, financial institutions must implement necessary controls and test models regularly. Organizations with robust checks and balances while innovating with AI will be well-positioned to adapt to regulatory requirements as they arrive.