What’s this all about?
Automated, real-time, straight-through processing… These are the non-negotiables of speedy banking. But, with banks far from where they need to be with their digital transformation, it’s clear that they need to get fast quickly. In this article, we’re discussing the LEVERIS approach to building banks that are (a) fast to build and deploy and (b) fast to operate and change.
Read on if you:
- Want your bank to be agile and flexible
- Want to understand the principles behind fast banking technology
- Are interested in learning more about banks that can be built and launched rapidly
Why is banking so slow? This question is posed and discussed in various forms everywhere from Quora and Reddit to business blogs and broadsheet newspapers. Of course, behind every card tap or contactless transaction is a bank struggling with a fragile medley of antiquated technology which makes straight-through processing just about impossible.
The necessity for transforming legacy technology so that financial institutions and their customers can have quicker, better experiences, is universally acknowledged and reports indicate that most are far from where they’d like to be in terms of digital transformation. While banks need speed, there’s also an unfortunate irony to grapple with: they don’t have time to waste getting there.
So how can a bank be fast to build and deploy, and fast to operate and change? We at LEVERIS believe that it all starts with the principles that inform its architectural development.
Speed to build and deploy
It can take years to build a bank. First, you’ve got to figure out where it will do business, who its customers will be, what the product set will look like, what technology you’re going to use. Then you might spend 18 to 24 months liaising with providers, getting them to put all their technology in one place, building all the contracts, organising staff, setting up physical buildings, building infrastructure and networks…
Then finally, once the difficult task of tying everything together is in place, we’re ready to deploy.
Modern design principles (open source technology, commonly deployed languages, frameworks and interfaces) can allow a bank to be built and deployed a lot faster. Indeed, concepts such as defining infrastructure in code, deploying applications in code and operating an environment through automation are increasingly commonplace. We go into more detail on that in our whitepaper on software-defined banking.
The platform components can be built automatically in the cloud as a ‘blank canvas’ so to speak. Then it can be deployed with generic product offerings and configurations. This can happen in just ten weeks.
Time is also saved if banks can avoid the hassle of coordinating multiple vendors while building a system that doesn’t have the standard capabilities (GL accounting, payments, loans, white-label mobile app, etc.) and compliance features built-in from the beginning and designed to work together.
Speed to operate and change
The platform principles highlighted above (software-defined, cloud-native, end-to-end, modern programming methods, etc.) go some way in laying the foundation for a bank’s speed to operate and change. Here’s a glance at some others:
Modularity, a principle whereby all elements are developed to work together but be independent of one another, also lends itself to efficiency. Normal processes like updates and feature development are typically cumbersome for those using old technology. But modularity allows these processes to be conducted per element and without affecting the rest of the system.
Integration can also be achieved more easily if the platform utilises APIs that can connect to third parties agnostically. That way, partners can be added in or taken out as needed, enabling integration with best-of-breed.
Dynamism is essential in a platform – think of having the flexibility to configure products with many different parameter variations, test them in a sandbox environment before going live, and then change them all later without rebuilding or affecting the rest of the system. Financial institutions can get new products to market at speed, even those designed to meet the needs of niche customers and market conditions.
To operate with true agility, a bank and its technology must be data-centric – that means having a single source of truth for information about customers, products and operations as well as the capability to perform analytical queries in real-time so data can be acted on as it happens.
With the smartphone king of today’s consumers, real-time transfer and round-the-clock availability of funds are not just a nice-to-have, but an expectation. Technology that can facilitate instant customer payments, capture real-time, log-based change data and utilise automation to reconcile payments gives banks an advantage in both providing that experience for their customers and in accelerating decision-making.
No time to waste
With a modern platform in place, built on these principles, there’s no real need for banking to be considered slow anymore. As we’ve discussed in other articles on the future of banking, technology like the smartphone is only going to become more embedded, more intuitive and more instantaneous.
That’s why we at LEVERIS believe in these principles and the power of technology to reinvent banking in the here and now so that it’s ready to adapt deftly to whatever comes next – be it another COVID-19 level pandemic, black swan-type event, or the next wave of fintech disruption.