The benefits of versatility for financial services

Agile enterprises in the finance sector are re-imagining how they deliver services in a competitive market.

Enterprises in the traditionally conservative financial services sector have spent the last few years re-imagining how they deliver services to differentiate themselves in a competitive market. Powerful mobile devices and fast cellular networks have made convenience the consumer preference, and newer online-only banks and fintech start-ups have created alternatives to mainstream institutions with an ability to develop and launch new services very quickly.

Subsequently, frontline banking executives, who wear the blame for poor experiences, are often left frustrated with the speed of innovation in the core banking systems they rely on to perform their roles.

In many cases, these solutions have been in place for more than a decade. They resemble rigid, on-premises and largely closed environments, with some of the assets stretched beyond end-of-life.

On the other hand, more agile fintech start-ups — unencumbered by technical debt — are pushing out entire new services in a fraction of the time. Less restrained by ‘business as usual’ IT, they are introducing architectures and approaches that provide continued innovation to customers.

In a report published last year, McKinsey&Company advised that business as usual IT strategies are unsurprisingly unsuitable for capitalising on the evolving consumer landscape — they inhibit organisations’ ability to adapt at the rate of the market and, more importantly, consumer demand. Enterprises should instead build services quickly and improve them while they are ‘live’.

Several Australian organisations have undergone major transformations to operate more dynamically and empower their employees with up-to-date applications to create better experiences for their consumers.

Teachers Mutual Bank (TMB), for example, conducted a significant overhaul of its backend to further improve the services it provides to its customers. Having anticipated the mobile surge, the bank began looking at best-of-breed applications from third-party developers that it could embed into its environment to create an effective omnichannel experience.

Through a strategic and systematic approach, TMB implemented a cloud strategy that would incorporate various new resources and technologies into a streamlined environment, making employees more productive and delivering innovative solutions to customers faster.

Central to the cloud strategy was the adoption of integration platform-as-a-service (iPaaS) technology to rapidly connect cloud-based and on-premises apps and data.

Not only has this enabled a concise, unified environment where staff have visibility into the information they need, but it has also provided the capacity to quickly absorb and connect new fintech offerings, such as Spriggy and MoneyBrilliant.

For a lot of financial institutions, the transition to more flexible IT ecosystems does have challenges. In a highly regulated business environment, institutions are trying to balance the advantages of various approaches such as private cloud, public cloud or hybrid cloud, while maintaining the highest levels of service availability, and the strictest of security and privacy considerations.

It will be interesting to see which organisations opt to be versatile, managing their risks while not shying away from change, to challenge the existing balance in such a contested market.

Image credit: ©Nmedia/Dollar Photo Club

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