Successful stakeholder management in payment processing:

Transformation projects in payment processing present a massive technological challenge and a crucial strategic decision with extensive implications. One of the biggest challenges is aligning varied expectations, technical requirements, and structures of all involved parties – while maintaining efficiency, compliance, and a long-term vision. We explore below the key challenges that banks face in managing multiple stakeholders during payment transformation projects and outline the best practices for effective, holistic stakeholder management.

Key challenges in stakeholder management

Several key challenges can be identified in stakeholder management, including:

1. Diverse stakeholder interests
Managing the interests of different stakeholders is a significant challenge. Banks, internal departments, external providers (such as BPO service providers), partner banks, and regulatory authorities all have different requirements and expectations. Clear coordination and prioritization of these interests are essential to engage all parties effectively and achieve the project’s objectives.

2. Complex coordination processes
A large number of stakeholders complicates coordination and decision-making. Differences in technical and procedural approaches across institutions add to the complexity. Effective management requires clear communication pathways, structured decision-making processes, and targeted moderation to ensure all interests are considered while keeping the project on track.

3. Change management and acceptance
Change management and acceptance are crucial, as not all stakeholders may embrace new processes readily. Resistance to change, a preference for existing structures, and hesitation towards new implementations can hinder project progress. Transparent communication, structured decision-making, and training programs are important to help build trust and ensuring the benefits of change effectively.

4. Resource limitations
Time and resource constraints significantly impact stakeholder management, limiting the ability to address the varying needs of all participants. Moreover, knowledge gaps among key personnel can pose bottlenecks, as specialized expertise is often concentrated among a few individuals. Effective prioritization, knowledge-sharing strategies, and resource allocation are essential for overcoming these limitations and ensuring successful project execution.

5. Expectation management
Unrealistic expectations from stakeholders can lead to dissatisfaction and conflicts. Clear communication, transparency regarding project goals and limitations, and regular alignment meetings are critical to managing expectations early and maintaining a shared vision for project success.

6. Communication challenges
Varying communication styles and channels among stakeholders can easily result in misunderstandings and inefficiencies. Establishing clear communication strategies, unified information channels, and regular update meetings ensures that all stakeholders remain informed and engaged throughout the project.

Special attention should be given to subsystems — IT applications that provide pre- or post-processing functions (e.g. liquidity management, anti-money laundering). Since these ‘satellite’ systems are often engaged only sporadically (e.g. for compliance reporting), increasing the risk that critical updates or project changes may not be communicated promptly.

Best practices for effective stakeholder management

The following five measures have proven successful in payment processing transformation projects:

1. Early stakeholder engagement
Identify and involve all internal and external stakeholders at an early stage. Actively engage with them in planning and decision-making processes and keep them regularly informed about the project status and developments.

2. Clearly defined governance structures
Establish clear roles and responsibilities to facilitate efficient decision-making. A proven best practice is the establishment of end-to-end (E2E) responsibilities, where both functional (business process owners) and technical (IT application owners) representatives ensure comprehensive process oversight. Migration managers can further coordinate across IT assets and ensure both functional and technical alignment in projects involving external stakeholders.

3. Transparent communication
Maintain regular, transparent updates about the project status, challenges, and milestones. Since changes in payment processing affect multiple departments—including operations, risk management, treasury, and IT — cross-departmental communication structures should be implemented. Regular steering committee meetings with external providers, such as BPO partners, have proven effective in maintaining alignment and fostering collaboration.

4. Regular coordination meetings
In large-scale projects, especially those involving subsystems that are not continuously in focus, proactive communication is critical. Monthly brief coordination check-ins (e.g. "Any updates?") help prevent important information gaps.

5. Prioritizing change management
Keep stakeholders engaged throughout the project to foster acceptance and mitigate resistance. Promote collaboration through team-building activities, feedback loops, and inclusive decision-making processes. These efforts significantly enhance project success.

Conclusion: transparency and collaboration as success factors

Comprehensive stakeholder management is a key success factor for complex projects, particularly in payment processing. The path to success lies in early engagement, clearly defined governance structures, transparent communication, and a strong focus on change management.
By effectively balancing diverse interests, facilitating structured coordination, and fostering acceptance, challenges such as resource constraints, communication breakdowns, and unrealistic expectations can be successfully addressed.
These best practices offer a practical framework to ensure that well-managed stakeholder relationships minimize conflict and contribute to the long-term success of payment transformation projects.

Capco brings extensive hands-on experience in stakeholder management for various payment processing initiatives, including the engagement and management of third parties such as IT service providers and software vendors.