Global investment firm sets up digital pressure valve for wire payments resilience

Wire payments still need on-premises processing centers, but now a cloud-based contingency platform has been established to buffer volatilities and disruptions.

Wire payments are the backbone of the global payments network, enabling institutions to move trillions of dollars around the world each day.

As the infrastructure supporting these high-value payments is rooted in on-premises processing centers, sharply elevated payments activity, such as during the pandemic-related trading volatility, can impact the critical market infrastructure.

This month, a global investment firm worth over US$45tn has migrated its wire payments infrastructure and also developed a treasury cash management relationship in the Cloud.

While cloud-based payments are not designed to replace on-premises wires, they represent an important channel for capacity expansion during episodes of market volatility, and could act as a pressure valve in the case of a risk event or some other disruption impacting processing centers.

Furthermore, cloud-based wires increase industry bandwidth almost immediately, versus the six-month time horizon it would take to build a comparable physical payment processing center. 

According to Saket Sharma, Chief Information and Digital Officer, BNY Mellon Treasury Services, the events of 2020 demonstrated the need to accelerate digitization and helping clients in their digital journey. “Working closely with Microsoft Azure and our collaborators in Microsoft Treasury, this is further testament to our ambitions to digitalize the entire payments industry, making it faster, more transparent, and more resilient for all market participants.”

Sharma said that the migration to the cloud is driving forward the resilience of the bank’s payments platform and the broader financial market infrastructure that it serves. This digitalization is the most efficient way to expand capacity while simultaneously increasing industry resilience by introducing an alternative workflow outside of physically hosted servers in processing centers.

According to Bill Borden, Corporate Vice President of Worldwide Financial Services, Microsoft Corp., BNY Mellon’s successful migration of Microsoft Treasury’s wire payments into the cloud “is an exciting milestone in the modernization of payments.”