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The architecture challenges you must overcome to win at digital banking

by five°degrees | 22 July, 2019

As an architect it’s your goal to provide a future-proof architecture to support the business. However, in the current era of digital transformation that poses several challenges for many architects. Why? Because banks must increase their investments in modern core banking systems to overcome constraints in their existing environments, upgrade products and services, meet evolving customer demands, and respond more quickly to constantly changing conditions. In this blog, we discuss two of the main challenges you must overcome to win at digital banking and get ahead of the competition.

Unlocking the fintech world

APIs are the gateways to the fintech ecosystem to expand into new markets and leverage innovations. They have emerged as a key element of modernization. With their ability to link systems and data, APIs play an essential role in making core banking systems more responsive and adaptable. The third-party solutions enable you to easily add and launch additional functionality and new services to your bank to enrich customer experience. However, most legacy systems and core banking platforms aren’t compatible with open APIs. Therefore, you need to provide a future-proof digital banking architecture that is adaptable with these digital gateways.

As said, APIs can modernize legacy infrastructure and the benefits are clear but they also bring challenges. The main challenge is managing risks related to security. Companies need to be clear on how they will safeguard their data against fraudulent activity, as the lack of homogenous technical standard makes operating processes susceptible to corruption. Both banks and fintechs must ensure that their software and systems are able to identify, predict and react to risks.

Solving legacy issues

Many banks run on legacy core banking systems that have been patched over and over again. Every patch or modification makes the whole system more complicated and harder to manage. It also makes it difficult, if impossible, to integrate these legacy core banking systems with the latest technology and innovations. This makes it impossible to simultaneously work on customer experience, operational excellence, and compliance.

Banks recognize these problems and believe they need core systems renewal to meet changing customer demand and respond more quickly to changing environments. However, you want to ensure you won’t end up with the same legacy problems within a few years, despite setting up something new. The key question is: how can you be future-proof and legacy-free at the same time?

To lend you a hand with this, we have written a guide that helps you define what is essential in building and implementing a future-proof core banking system so you can provide a flexible architecture that supports the business. We share the key features of a future-proof digital core banking system, how cloud-based core banking can help you, and why using standard building blocks and configuration editors ensure not only viability but also a smooth implementation.

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Architect’s Guide to Digital Core Banking in the Cloud

Learn about building and implementing your digital core banking platform in the cloud, configurable and with automated deployment

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