Digital banking software sits on top of a bank’s legacy environment, connects the different elements underneath and integrates third party technologies and fintechs. Such a layer allows banks to offer a seamless digital experience swiftly and at the right cost, writes Patrick Rood.
Banking is experiencing a wave of disruption and just like other industries before, the “app” is essential. When you look at transport, media, retail and hospitality – mobile applications have driven disruption by digital technology. Fundamental to this shift is the underlying platform of these apps. They are the driving force behind the speed to market as well as their agile ability to continuously improve.
Primarily, apps allow start-ups to provide services that customers love and advocate – often by circumventing legacy infrastructure. Start-ups are able to offer the same service, at lower cost and more conveniently – fintech start-ups; Monzo and Revolut are two great examples of this.
Secondly, new technology infrastructure allows frequent updates and improvements to apps without having to touch the core banking platform. This means that new features, customer journeys or new user interfaces can be rolled out easily and continuously improved with client feedback and usage data.
Thirdly, we see apps representing new business models whereby the likes of Revolut own the distribution channel and customer experience. Such apps come pre-loaded with functionality geared towards modern living. From a simple debit card product to also generating fees from their lending, mortgage, etc. Hence, the movement away from specially targeted “single-need” apps for individual client needs. These single need apps are often placed at the point-of-need e.g. a card app in conjunction with e-commerce providers so that users can get an instant card to use for purchases. Being able to reuse functionality is key for this to be applied across many combinations.
However, in order for banks to be capable and digitally-ready, they need the speed, the low-cost development environment, the ability to reuse functionality and the adaptability that a digital platform brings. It is no longer enough to be digital on the side, running add-on mobile apps or a website in parallel.
There are different routes to achieve this. A bank can rip out its legacy system and install a new core with its dedicated digital platform from a vendor. It can build its own software. Alternatively, it can install a new platform and integrate with existing legacy infrastructure. It is the latter which is gaining momentum across the industry.
A simple route to going digital-first
This is the solution that Backbase offers. It draws on the app phenomenon and offers the platform banks need for a swift and efficient route to becoming digital-first. It provides a digital layer that can be quickly installed on top of a bank’s existing legacy system and make connected experiences with third party fintechs and even other banks. Thus, opening up the full benefits of being a digital bank, without the risks and costs associated with other options.
Being digital-first is more than installing digital technology. Digital is only successful if a bank also has the right mindset when it comes to processes, methodologies and services. This means ensuring that the service design and customer journey mapping, as well as the bank’s structure and culture, are all optimised for a digital environment. It means that local market knowledge and a good grasp of leading use cases are key to success. This needs to be complemented with implementation experience and discipline as well as coaching so that a bank can become self-sufficient after implementation instead of relying on system integrators after go-live.
Backbase has been working with Orbium on digital banking projects for over two years. Backbase brings the software and Orbium brings the management consultancy skills, along with implementation expertise. Together, we cover the business, technology and the organisational know-how and change required to become a thoroughly digital-first bank.
Changing systems and mindsets
With the Backbase Customer Experience Services at its core, Backbase plugs into a bank’s legacy spaghetti architecture via APIs. Enriched with a portfolio of underlying banking capabilities (Backbase Digital Banking Service) and process digitisation, the company provides one platform from which the different channels can be run.
Orbium’s role is to ensure that the platform and the necessary widget-based applications and digital banking services are installed and used in such a way that the bank will realise its digital ambitions. Orbium knows our technology and the banking sector inside out, so they can match client needs with the right solution, implementation and processes – and even ensure the licence agreement covers all the right elements.
Today, a large number of banks still have the old mindset, believing that digital is an add-on for them. Backbase and Orbium are on a joint mission to change that; to help them go digital-first swiftly, effectively and efficiently, delivering the kind of products and services their customers of today and tomorrow demand. It’s the only way banks will stay relevant in a platform-driven world.