Banks nowadays are launching their own modernization efforts to deliver better digital banking experiences to their customers. As new entrants and traditional institutions alike keep pushing the boundaries of technology, the time has come for financial institutions to adopt technology suites that fit the next era of banking. That said, despite this renewed interest and focus on modernization, some banks can get locked into rigid platforms which drive inflexibility across the enterprise, essentially hindering agility and innovation.
To effectively modernize while continuing to deliver value, banks would need an effective banking software that has the features necessary for seamless integration, customization, and higher levels of oversight. In this article, we’ll talk about what these features are and how they can help banks keep up with today’s Bank 4.X era.
Pre-Integrated and Componentized Architecture
One of the first things that banks should look for in a digital banking platform is the capacity to allow in-house development and customization without needing a system integrator. To that end, it would be good to have a banking architecture that utilizes componentization. To put it simply, componentization is a framework in which users can use and reuse components and functionalities stored in a library without affecting other elements across the IT enterprise.
Componentization allows IT teams to deploy, patch, and upgrade components in a more timely manner. Having this low-to-no-code, microservices-based banking architecture will help banks roll out updates quicker while speeding up product rollout and providing frictionless banking experiences.
Supports API-Driven, Opti-Channel Service Delivery
A digital banking solution for the modern age revolves around full-cycle service delivery through customers’ preferred channels or their optimal channels. And to provide an opti-channel experience, a banking platform must support open banking throughout new and contemporary channels.
Open API and other open-source technology concepts are the foundation on which banks can launch timely features and services such as channel-to-channel transactions. Moreover, such technologies allow third-party integration with entities such as fintechs.
But apart from greater interoperability, security is another important component that a banking architecture must possess. A digital banking software must be able to integrate safely with other entities by complying with rigorous internet and mobile security standards. Doing so will ensure the protection of customers’ data and funds despite the myriad of channels through which these customers access banking services.
Modular and Has an Innovative Software Design Approach
When doing in-house development, it’s best to go with modular and core-agnostic systems that tailor solutions around organizational needs. Concepts like domain-based design (DDD), for instance, focus on the configuration, context, and dependencies of a specific organization. This design technique utilizes elements such as design patterns to eventually arrive at a solution for organization-specific problems.
Through DDD, banks can implement solutions based on their identified problems, business concepts, and overall systems and operations.
Having a continuous innovation and continuous delivery (CICD) mindset is necessary to deliver banking services fit for the next era. To support the CICD approach, one must look toward cloud migration. A cloud-ready banking architecture opens the door to a lot of business benefits including a cost-efficient subscription model, a flexible platform, better online collaboration, and business continuity.
As such, it would be best to enlist a banking solution that supports “as a service” cloud frameworks to surpass the competition in a highly interconnected, digitally immersed world.
An Intelligence-Based Approach to Big Data
An intuitive digital banking system maximizes the wealth of data available to provide real-time insights that help inform crucial business and development decisions. That said, it would be beneficial to implement a banking platform that makes use of artificial intelligence, machine learning, and natural language processing (NLP) to make sense of data and deliver actionable, analytics-driven insights to support report generation and service improvements.
Further, a banking platform with embedded intelligence can support features designed to automate procedures and deliver a better customer experience. For example, AI is highly instrumental in the implementation of chatbots and digital assistants that handle customer queries. AI also plays a big role in threat intelligence, which is vital for sending security alerts in cases of data breaches or suspicious transactions.
On top of that, automation helps simplify workflow management, enact self-verification methods, and deliver personalized in-app services to customers.
Keys to a Future-Proof Banking Architecture
To stay competitive in the ever-changing landscape of digital banking, banks must stay aware of what else needs improvement and have the guts to overhaul as needed. The challenge for banks now is to innovate without being exposed to a slew of operational, business, and financial risks.
Thankfully, banks can implement solutions that allow innovation at scale while minimizing the risks to banking systems and consumers. These banking platforms give way to a higher level of personalization while ensuring security, reliability, and ease of use across various channels. Moreover, such platforms maximize the use of current and emerging technologies to significantly improve processes at the enterprise and consumer levels.
Truly, the world is yet to see how much further innovators can push the digital frontier. However, we can take advantage of what is already available to us to mold future-proof banking ecosystems that will last through this era and beyond.