For years, traditional banks’ technology systems have been a huge obstacle to progress in digital transformation. Many still run parts of their legacy technology on near-extinct programming languages and years of patching have created complex estates that consume huge portions of IT spend. Banking executives are aware that this situation isn’t sustainable, with regulators making ever more vocal threats of fines for outages and neobanks starting to eat away at market share.
These newcomers to the banking scene have the technological upper hand. Some, such as Revolut, have built their platforms from scratch in the past few years. Others are running on entirely cloud-based core banking platforms. These digital-first banks are ready for the next generation while the incumbents struggle to innovate. This has to change, but so far the route forward hasn’t been clear. With the rise of the digital investment platform, this is set to change.
How does a digital investment platform change the game?
All that’s required of a bank is to choose the right vendor. A good digital investment platform won’t turn into the next era of legacy technology in a bank’s IT landscape. Instead, the digital investment platform offers an easy way to future proof the bank’s technology infrastructure.
A digital investment platform with a cloud-native, microservices architecture offers agility, scalability, resilience and seamless integration with existing and future systems.
What benefits does a microservices architecture offer?
- Continuous delivery
- Innovation at speed on its technology stack
- Rapid scaling in line with increases in demand,
- Extensibility, so the bank can strategically extend the platform with modular building blocks
- Accelerated time to market for new products, services and features
How do digital investment platforms offer increased resilience?
When legacy technology fails, services go offline or fail to function properly and ultimately it’s the customers who suffer. As early as 2014, the FCA fined RBS, NatWest and Ulster Bank Ltd a total of £42 million for IT failures that took place in 2012 leaving customers unable to access essential services. Digital banking shutdowns happened daily in the last 9 months of 2018.
It’s no wonder that these incidents are becoming ever more common with 92 out of the top 100 world banks still relying on legacy mainframe infrastructure. The costs of maintaining such systems are astronomical and it’s been estimated that 80% of banks’ IT spend goes on maintaining this legacy infrastructure.
Cloud-native platforms are designed to stay online regardless of problems occurring anywhere in the IT environment. They offer greater resilience than legacy estates, safeguarding future performance.
Why choose API-enabled integration?
API-enabled digital investment platforms will seamlessly integrate with existing core banking systems, as well as other existing or future systems, modernising the bank’s overall infrastructure without the need to replace everything underneath all at once.
Delivering the ultimate digital customer experience is the most significant battleground for retaining and increasing market share in banking today. Incumbent banks are determined to remain dominant and are investing serious effort into addressing this. If you’re serious about your bank’s technological firepower and want to talk to us about how we can support your future capabilities, we’d love to talk.