Behind the Idea Europe

Behind the Idea: Form3

The recent publication of the Financial Stability Board’s (FSB) progress report on the first year of the G20’s push to enhance cross-border payments shows that there is still a lot more work to do.

Making these types of transactions cheaper, faster and safer is rightly a priority in order to boost economic growth, international trade, global development and financial inclusion. The progress that has been made so far is largely thanks to the fintech industry.

While cross-border payments are inherently more complicated transactions – and also subject to a lot more regulatory scrutiny – in our view the underlying technology has become much more efficient. Processing cycles are much shorter – while we haven’t reached real-time processing yet, waiting times are much lower than they used to be. 

There’s also a lot more competition in this area now, which is driving improvements in services and lowering fees. Prices might not yet be as low as for domestic transactions, but there is a clear trend in favour of the end customer. 

Michael Mueller is the Chief Executive Officer of Form3
Michael Mueller is the Chief Executive Officer of Form3

Michael Mueller is the Chief Executive Officer of Form3, a provider of enterprise-grade cloud payment technology. Michael has almost 30 years’ experience in the payments industry and is a passionate evangelist for digital change and innovation in global payments and banking.

What has been the traditional company response to financial technology innovations nationally?

Financial institutions have been late adopters of technologies like platform-based architecture, cloud-native technology, API-based processing and microservices. They’ve realised that implementing proprietary technology isn’t a good solution as it is expensive and inflexible. Now their focus is on building the components that differentiate them from competitors such as their front end, while at the same time using platform-based solutions for backend processing and other non-customer facing components.

How has this changed over the past few years?

There are still systems being used in the financial services industry today that were built in the late 1990s. Change in financial services used to be very expensive and often very risky so there has been a reluctance to modernise. But in the past five years there has been a wholesale shift from rolling out highly customised software in their own data centres with a lot of professional services attached, to a model where the institution focuses on creating a proprietary customer journey and buying in all the other necessary components.

Is there anything that has created a culture of change inside the company?

Like any startup or scale-up, our business depends on change in order to create market opportunities. When our company was founded in 2016, cloud-native technology reached a level of maturity that made it applicable to heavily-regulated financial services and mission-critical technology within the sector. We saw an opportunity to deliver financial services in a different way, providing and designing services completely unlike what customers had been doing previously. 

What fintech ideas have been implemented?

All of our customers are on the same code base. There’s only one platform and that means we find synergies across different customer groups and across different customers. When we make an upgrade to the platform all of our customers get the benefit straightaway at the same time. All of the changes that we make are neutral as they become available to everyone at the same time – and all customers contribute to those developments. It’s a cooperative approach to developing technology. 

What benefits have these brought?

It gives our customers agility when they roll out new initiatives. When a customer signs up, they get access to a staging environment that allows them to build front end portals on top of our backend proposition on APIs with sandboxes and simulators, which is a very efficient way of developing. They have a firm foundation on which their front end can actually be built and they can rely on the fact that anything they do in their front end will actually work at the backend as well, because they can test it on day one.

Do you see any other industry challenges on the horizon?

One of the most important changes we will see in the industry is the move to real-time in payments. I think customers will no longer accept the fact that you can actually send a WhatsApp to someone in milliseconds but not money. Card networks work on a near real-time basis, so bank-based transactions will have to follow this trend for domestic and also for cross-border payments. This means banks will have to upgrade their systems so they can not only process payments in real-time, but also so they are always on. 

Can these challenges be aided by fintech?

In the corporate banking space, more corporations will use API interfaces for their banks to initiate payment processing. Increasingly, payment initiation is something that will disappear as a customer experience, through biometrics and face recognition. Smart technology will initiate the payments, then real-time processing will effectively make the customer experience immediate. Central banks and clearing bodies globally are already upgrading their technology to respond to the significant demand for more real-time settlement.

Final thoughts…

There’s been exponential growth in payments; in developed economies we see a compound annual growth rate (CAGR) of more than 7%. You can see when you look at your bank account today as opposed to five or 10 years ago your statements have become longer because you’re making many more, much smaller, payments. In today’s economy with cash being phased out, the need to move to real-time payment processing cannot be underestimated. 


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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