Technology needs of a multichannel financial services business

The banking and financial services industry of late has been juggling between the buzzwords like “cloud”, “mobile” and “big data”. The reason why the industry seems to be struggling...

Snehal Fulzele 10th January 2014

cloud and mobile bankingThe banking and financial services industry of late has been juggling between the buzzwords like “cloud”, “mobile” and “big data”. The reason why the industry seems to be struggling with these words is perhaps because of their previous myopic view of business and business processes, which were vertically built as silos around their products. The long term vision with the customer at the center of the stage was talk of the town, but without any action to substantiate. But now with the rise of the technology savvy customers, the financial services industry is limited by its legacy systems such as core banking and is looking to break away.

A new age financial services business should now focus on incorporating agile enterprise solution; solutions that can operate seamless across different channels and empower the business to leverage on benefits of emerging trends and market needs.

Following are some of the features of an enterprise lending solution for financial services firms with a loan portfolio management arm:

  • Integrate data and business logic across multiple channels so seamlessly as to create an “omni-channel” perception in the customer’s mind.
  • Provide insights into customer profile such as potential and associated risks for effective use of customer data.
  • The enterprise solution must help the company to stay compliant by responding quickly to changing regulatory needs and stay competent by responding quickly to changing market needs. Offer business flexibility to add new products, business units, business processes in the shortest possible time.
  • Empower the lending enterprise with business analytics module to perform trend analysis, predictive analysis of customer needs in order to offer the right products to the right customers at the right time.
  • Streamline and automate business processes, and standardize reporting in order to redefine their customer experience.

So, why are banks and financial services still digging deep into their problems by continuing with legacy systems such as Core Banking? Celent Research, a renowned research and consulting firm focused on the application of information technology in the global financial services industry, reports that new core banking projects will grow only at a CAGR of 2.4% in the next 4 years [source: Celent]. The same firm in 2003 reported that it was already time for core replacement to storm the banking industry. why hasn't core replacement kicked off?

Of course reasons such as time and cost implications of the projects will always be considered. But the shrinking margins, continuing regulatory and societal pressure on banking and financial services industry could be real culprits for this “unspectacular” growth [in Celent’s own words]. Industry observers, however remain hopeful that by 2020, most companies in the banking and financial services industry would have adopted to today’s emerging technologies such as cloud and mobile.

Although, it may not yet be “game-over” for legacy systems, the enterprise solutions are certainly on the rise and will soon become a requirement to stay competent in the industry and grow.



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