Most banks are technologically biased to achieve flexibility and speed. But, technological gaps still exist, and to operate in the extremely complex and fast-pacing world, sustainability is still chaos. So, the banks need to adopt a method to continue next-generation banking in six possible ways.
Legacy systems of banks have been trustworthy, stable, and robust. Most banks have chosen a more flexible technological front-end to modernize banking instead of a core system. This has worked well temporarily. Websites, mobile apps, and channel experiences that are fluid and quick have made customer experience a lot better than before.
The legacy back-ends form some sort of a technological monolith, hardwired to handle the entirety of business needs and speedy transactions. There have been a few tactics like extracting small apps and services to extend the life of the existing core banking system. There are a few banks that have truly moved to a flexible backend. This prioritization demands a change in the present day.
A core banking system of today’s era must be a hallmark of speed and agility, with next-generation operations to handle the needs of a complex world. The core banking system acts like the heart of a bank. Making fundamental changes in such a system is difficult and expensive.
Furthermore, the next-gen features of a core platform are constantly evolving and maturing, so committing to any change might pose a risk. Navigating all such challenges requires a comprehensive plan. A strategy that requires concurrent actions is the best one moving forward.
The motivation for next-generation banking:
The technological shifts by the banking systems has shown a great possibility of optimizing customer experience and improving profitability.
A shift towards building ecosystems:
An open architecture is established in the ecosystem approach. This allows third-party services to include components of the core banking platform as a part of their offerings. To do so, the need for a flexible and modular core is required of the bank.
The movement towards the top of the funnel:
Banks were playing an active role at the end of a customer journey when financing was requested. However, leading banks are now taking an upstream approach to make sure a customer has a personalized journey experience.
Real-time data:
Most decision-making is done through real-time data as observations based on batch processing are redundant to the fast-changing choices of today’s customers. Real-time data ingestion and auto-updating of modular components are said to elevate the customer experience.
Advance analytics at play:
Proprietary data is a valuable asset of the bank. It can be used to discover requirements, select products, analyze portfolios and deliver services in an intelligent and personalized way. Data-driven customer engagement can, for instance, suggest customers based on their past transactions.
The rise of zero-trust security:
The zero-trust security model requires verification at every stage of the process, instead of traditional entry/exit point guarding through firewalls and proxy services.
The zero-trust model encrypts data, required multi-factor authentication, and tokenizes data. All such features are only achievable with a flexible core banking platform.
Customer satisfaction through the power of customization:
The traditional model of banking required customers to choose from a basic catalog of products. With the increase in competition and similarity of services across multiple banking platforms, the importance has shifted to the ability of banks to personalize choices or offer new and unique products. Such services require some flexible tinkering at the backend, which creates the need for a change in the core banking practices.
Thus, next-generation banking is the future of a successful bank. To truly achieve this, a flexible core banking platform has become the need of the hour. This much-neglected and utterly necessary task can be achieved by remodeling the technological backend to tackle fast-paced changes as and when required.
With competition rising every day and banking platforms providing similar services across the globe, a leading bank will be distinguished by its ability to adapt to changes as quickly as possible and also provide a personalized experience to the customer, offering many customizations along the way. The next-gen core banking platform makes all this possible, and more.
