This legacy technology is complex and cumbersome, both to implement and change, with limited ability to test before implementation which introduces significant risk. Once delivered, markets and requirements would have probably moved on and financial institutions would be left trying to catch up again.
Now is the time for cloud-based services and an API-enabled composable architecture which offers a quick and cost effective route to building a versatile core solution. Rather than having to buy, build and maintain a collection of poorly-connected systems, an API-enabled composable architecture lets institutions leverage solutions built on a flexible cloud infrastructure, completely managed and provided as a service by a trusted provider.
Open banking and the growth of the use of APIs attests to its utility. It lets information flow between applications, whether internally developed or third party, giving different business areas the ability to easily access customer data, draw insights and create innovative products tailored to market and regulatory needs. New products or iterations of existing offerings can be rolled out, integrated and modified at a fraction of the cost and time it would take with a legacy system.
With these tools, specialised IT or technical teams can shift focus from legacy maintenance and ‘keeping the lights on’ to continuous customer and market-driven innovations in products and services. They can concentrate on helping the business to move forward, prioritising and developing differentiated products and services and create better value for customers rapidly, assuring its place as a champion in a digital-first world. Initial costs are low and subscription-based with providers managing all upgrades, taking the strain off internal resources.
Financial technology has evolved to provide a vehicle that quickly responds to changing customer demands and market pressures, helping institutions navigate an ever evolving market. Those stuck in the past will quickly find themselves left behind by competitors and customers.