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Innovation in BankseNewsletter Spring 2018

Latest research and reports concerning technology trends in the banking sector indicate that the market challenges and the customer patterns require Banks to innovate, so as to remain competitive. This could range from restructuring their core banking platform to supporting blockchain technology, as it was recently announced by Santander. New opportunities to automate banks’ processes and deploy the right digital strategies are becoming apparent, so that they can focus in delivering best-in-class services.

Key considerations of financial institutions are to assess the efficacy of their IT investment versus the cost saving returns. Core banking platform redesign is the most important aspect from a bank’s perspective, as this will redefine its approach in the modern era with the automation to be supported in the back office as well as the infrastructure of it. In this re-design, depending on the type of the bank (small, large, specialised) and the delivery approach, other parameters of modern technology need to be taken into consideration, such as cloud, AI, RPA and blockchain, each bearing its own merit to the time and benefits gained.

Moving to the digital era the primary concern is to have a system that supports such a shift or a diversification and evaluate whether it is crucial to the business objectives. Then as robotics and AI are gaining ground in delivering a more personalised customer service while increasing overall productivity, their capabilities applicable to the bank would need to be addressed. AI is also a technology that can be applied in Risk Management and Metrics to identify patterns through machine learning and implement forecasting models.

It is likely that the majority of large banks might already be in the process of reevaluating their IT infrastructure. However, selecting one that provides readily available functionality and support could lead to the end result of achieving lower total cost vs benefit.

Furthermore, given the fact that they need to comply with regulations (i.e. GDPR) and deploy the Open banking approach - whereas one might challenge the other; the benefit of cloud technology for the bank and its customers needs to be evaluated. The majority of banks might prefer a private cloud however a hybrid model might prove more cost effective and efficient to operational performance. This may also apply to AI implementations, as long as the functionality that would be deployed would deliver transparency with regulators and cyber security. Moving to blockchain, as this is becoming the next big trend to watch out for, one should consider the efficacy of its implementation and trust created, in order for it to be implemented, since it relies on networking power, with the recent example being the consortium of 61 Japanese banks to deploy instant payment transactions.

Such concerns can easily be discussed with an IT partner whose experience and focus is on delivering to the needs of the industry. Profile Software with more than 27 years of experience has developed digital applications and platforms for both banks and investment firms to help them meet the market challenges with the solutions required. Latest technology and methodologies are utilised in its digital banking offering with a number of successful implementations around the world.

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