According to a recent report on IT failures in the financial services sector, by the UK Treasury Committee, firms are not making effort to reduce operational risks by switching to modern systems. They continue to use aging legacy infrastructures that are expensive and difficult to maintain, which usually result in IT incidents. Like every other business, banks must constantly evolve or risk playing catch-up with counterparts. McKinsey estimates that by 2025, financial institutions who use legacy systems will see up to 60% decline in profits if they fail to evolve. Legacy systems are inflexible and incapable of supporting institutions through market changes.

Changing regulations, customer demands, maintenance costs and challengers have made it evident that this is not the time for indecision. The aim should be to invest in lean, flexible technology that will push innovation and help respond to customer demands quickly, by supporting the creation of highly customized products. For start-ups it may require taking a completely fresh approach to core banking infrastructure challenges by deploying in the cloud, configuring and continually expanding product offerings. As an existing financial institution, you can take a digital transformation approach by leveraging your experience, resources and competent Fintech partnership.

When considering core transformation, an in-depth analysis of current infrastructure, market dynamics, customer needs, and organizational capabilities are required. To increase your customer base, your services delivery will need to be more efficient and customer centric. Having a core banking system that is light and inclusive, allows for many use cases at affordable cost and short deployment time frame. It should be adaptable to client needs, support regulatory reporting and compliance.

Replacing an existing banking system with a modern solution will enable the acceleration of time to market of new products and provide competitive advantage to secure new markets. Embracing an inclusive core banking system with flexible deployment options – in the cloud and on-premise – will give your business agility, control and features that can be easily configurable to changing market dynamics, enabling you to have in-roads to emerging markets, offer new products, acquire new customers, and provide the opportunity to earn significant revenue.

You can launch a Greenfield tech-enabled digital bank to tap into market opportunities, byturning to a cloud-enabled core banking systemto support your core components. The cloud banking platform will provide flexibility, capability for dynamic change and scalability. You can release new products, services and features in weeks (instead of months or even years!). While many businesses talk about being agile, only those able to quickly respond to evolving customer expectations and opportunities will make real progress.

Some benefits of a cloud enabled banking platform include:

  • As an existing FI, you can launch an independent business that operates like a Fintech, so as to succeed in a constantly evolving banking environment.
  • Low cost, high business, self-service platform.
  • Customer facing value creation and enhanced customer experiences.
  • Time savings in the deployment of new products.
  • Work with a compatible partner’s ecosystem to plug into their platform and deliver needed services.
  • Support an ecosystem of modern components and third-party APIs.

Strategies for evolving in an uncertain market include:

  • Focus on optimizingcustomer experience and consider the business impact of changing regulations, and competitor offerings.
  • Whether you are a start-up or an incumbent institution depending on your business position, to evolve in an uncertain market may require the option of leveraging your resources and market knowledge to start afresh with a new digital bank.
  • Leverage omni-channel communication strategies for creating more personalized experiences, with the goal to deliver efficient services every time across channels. 
  • Utilize an agile cloud enabled core platform and APIs, so as to be proactive instead of reactive in an evolving market.

To conclude

Those that embrace change will experience more opportunities and competitive advantages. Being adaptable to changing market dynamics requires having a flexible cloud banking solution that enables you to combine specific features you need in new ways, to deliver new services, utilize lean, agile, processes and providing superb customer experiences, which will enable your enterprise to grow and scale rapidly. Take advantage of AHEAD inclusive cloud-enabled core banking with greater elasticity, flexibility and cost-effectiveness. Contact us Today!