The technological transformations in the world are the new normal. Most public and private organizations are in the process of adapting cutting-edge technologies to drive innovation with one common denominator – automate scalability, improve end-user experience, and deploy the applications faster with zero delays and downtime. The challenge for banks to integrate modern technology stack still persists when it comes to the banking industry. The snail’s walk is out-of-sight to meet the public and private needs of partners and customers. Fintech integration to provide faster, simpler, and more effective financial services is the game changer now.
The aim of fintech is to automate the delivery of financial services. For becoming the fintech, the core values drive the expected outcomes for any organization. The core values of fintech include:
- Cutting-edge technology
- Scaling operations
- Cloud-native development
- AI/ML-based automation
- Business intelligence
Implementing these core values can fetch great value to the organizations. A lot of thought processes and strategies are involved in fintech integration. A well-defined foundational architecture and a strategy to run through the entire organization transform the way the financial industry operates.
To achieve massive scaling, the typical fintech integration strategy must consider – the age of systems, mainframes, data centers, and use of existing infrastructure. Since most fintechs operate on the cloud, it’s very essential to measure these components as part of digital transformation.
All these transformations sophisticate core operations and simplifies end-user computing. As technical debt is a key to achieving synergy, integration of fintech speeds up the go-to-market process and products can have cloud-computing power in addition to a powerful technology stack to support the high-end functionality for the end-user.
On a considerable scale, opting for fintech doesn’t comply with the accelerating tech stack. It means building an exquisite infrastructure to preset the financial functions. Without expertise or planning, going for fintech integration may not give the projected value.
Designing the right fintech integration strategy
A measurable outcome is possible when strategy goes in the right direction, meaning it must stick to the company’s objectives and core values. Fintech integration involves two key factors that make it successful in the long run.
1.Upgrading core systems at the right time
The modernization of banking ecosystems begins at the core. The core platforms must equip the flexibility and feasibility to adapt to next-gen technologies. Before optimizing the core platforms, every organization must evaluate:
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Tools & systems:
Based on the existing tools and systems, the probability of upgrading can be evaluated. Otherwise, it may disrupt the entire operational structure thus bringing a massive challenge to the door.
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Nature & scope:
The scope defines the range at which a new technology stack can be integrated to see a new transformation in banking and nature defines the character of existing systems and to what extent they could support.
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Complexity of existing systems:
Most systems in banks become outdated and they remain unfit for new-age banking. If not, the complete core systems need to be replaced as it’s a crucial change.
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Governance:
The mechanism and the way banks deal with upcoming challenges will have a direct impact on fintech. As an evolving pioneer, the control over systems and the people who operate them place a vital role to ensure a smooth transition from traditional to automated systems.
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Architecture:
To enhance security and constantly innovate, architecture has to be developed as it keeps the banks to be highly responsive toward market changes. Modernized IT architecture accelerates product launches, simplifies payment gateways, and maximizes ability.
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Delivery practices:
Financial services are carried out by billions of individuals in the world. And banking products help every individual to maintain their accounts. Delivering the right products with trustworthiness, security, and transparency, customer requirements, and innovation keeps the fintech organizations in pace with the evolving needs. For this to happen, banks need to adopt a set of well-defined delivery models designed by experts.
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Product enhancements:
Advancements in products without simplicity leave no gains. The higher the technology in banking products or services, the simpler they must become. Simplicity along with great end-user experience always allows the fintechs to operate more efficiently.
2.Using the cloud as an innovation
A decade ago, the cloud was used only for one purpose: computing, storage, and networking. But now, it’s the launchpad for innovation. The cloud completely supports changing business needs and there’s one reason why most organizations face issues with the cloud – migration challenges. These challenges include:
- Complexity of legacy systems
- Inconsistent business and operating models
- Newly evolving architectures and applications
- Changes in data architectures
- Lack of people scale or expertise
- Compliance with regulatory requirements
So, to integrate fintech technology, a decisive strategy must be followed and our research suggests that it can bring the success rate to more than 95%. There are two integration threads that must run in parallel.
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Traditional way to optimize existing infrastructure
Always it’s not the technology that blocks the integration of tech stack. Banks can lead with change management and it works successfully for email, collaboration, and storage as these are non-differentiating components. The functional components that remain unaffected are HR, finance, and legal. The transformation in these two functional areas is possible through management. There’s no involvement of technology as it’s all about upgrading peoples’ skills and tuning them for a new environment.
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Integrate the fintech platform:
Organizations must analyze deeply the growth potential and market as fintech integration is a revenue-centered deal. The expert people consisting of product engineers who can design a roadmap help organizations to scale the technology. The connecting bridge between fintech integration and the upcoming technology stack is highly experienced, industry professionals. The collaboration of teams redesigns the growth roadmaps for fintech integration that aligns with the vision.
These two factors help the banking industry to drive its innovation in the direction of digital transformation thus achieving scalability, automation within core systems, and high-security layers for data protection.
