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Payment Outsourcing: An Effective Alternative
JPMorgan Solution Drives Revenue Growth, Deepens Client
Relationships, and Supports Sustained Profitability.
istorically, payment outsourcing has been process services model (BSP). For example,
viewed as a cost-savings measure.Today,
JPMorgan’s Global Payments Infrastructure solufinancial institutions are searching for
tion offers both.With the ASP model, a vendor
alternatives to maintaining their own infrastru chosts a funds transfer technology solution on
tures for delivering transaction services. I n s t i t ubehalf of the institutional client, while the client
tions are realizing that a payment outsourcing
continues to provide the resources for presolution has a broader value proposition than
processing and post-transaction service activities.
cost-savings alone.The right solution must be a
With the BSP model, a vendor provides transacstrategic decision that drives revenue growth,
tion processing and service activity—including
deepens client relationships, and supports susinvestigations, repairs, and other day-to-day
tained profitability.
operations that supKey to this broadened
port the client’s pay“The right outsourcing
value proposition is
ment clearing activity.
provider can help its
finding the right outThe key to a BSP
clients increase their
sourcing provider—one
approach is that the
existing capabilities so
with the scale to drive
solution never limits
efficiency alongside
the client’s ability to
as to differentiate their
robust product capabilicontrol its payment
services for competitive
ties and best practices
flows. Rather, it gives
advantage.”
that improve quality
the client choices for
while providing supehow to manage funds
rior controls. Further, a
—Thomas Halpin, US Dollar Clearing Business transfer activity.
provider should demonExecutive, JPMorgan Trea s u ry Services. Potential buyers of
strate a long-term comoutsourcing services
mitment to maintaining
should consider
a best-of-breed capability, which helps the soluwhether a vendor offers both models or provides
tion’s buye rs gain a competitive edge in delivering
a technology platform only and outsources the
payments services to their own customer base.
BSP component.
H
Tipping the Scale Towards Profitable Growth
Institutions without the scale of business to
compete efficiently must find viable alternatives
to their own payments infrastructure. Many are
looking for ways to leverage the scale of other
providers in order to stay in the payments space.
An outsourcing model is emerging as a strategic
solution that enables institutions to continue serving their markets with payment services.And the
right outsourcing provider can help its clients
increase their existing capabilities so as to differentiate their services for competitive advantage.
Choosing an Outsourcing Model
A number of outsourcing vendors are currently serving as application service providers
(ASP). A select few are also offering a business
Core Competency or Competitive Advantage?
Distinguishing between core competency and
competitive advantage is central to the decision
of whether to purchase an outsourcing solution.
The new reality for the financial services industry includes consolidation, new regulatory
requirements, increasing business resiliency measures, evolving client needs, and changing technology.Today financial institutions must honestly
assess their business strategy to ensure they direct
resources in a manner optimal for generating
sustainable profitability.They must distinguish
between core capability and competitive advantage and consider the outsourcing option from a
broadened perspective. 
By Thomas Halpin, US Dollar Clearing
Business Executive, JPMorgan Treasury Services.
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