MAMBU
rivals that configure and deploy services in the cloud is too big to ignore .
Incumbents , then , were implementing large-scale transformation programmes long before the pandemic . But these projects moved at the speed of banking . In a tightly-controlled industry , risk is high and progress slow .
This is compounded by a trade off between short-term profit motives , which appease shareholder expectations , and long-term organisational objectives which are key to ensuring their future survival .
The COVID effect Banks could trudge ahead with this status quo back in 2019 , but not today .
With the pandemic forcing physical branch closures , consumers have increasingly moved online to manage their finances . Digital banking options are now a necessity and expectation , with banks under pressure to deliver financial services whenever and wherever customers need them .
Likewise , long-term economic uncertainty saw consumer confidence plummet . With COVID-19 restricting short-term buying power , demand for personal lending and flexible payment options surged dramatically . As customers come to expect point of sale ( POS ) lending options , such as Buy Now Pay Later ( BNPL ), as standard , it ’ s vital banks can bring products to market quickly to keep pace with changing consumer demands .
Rethinking rip and replace But current transformation efforts revolve around the rip-and-replace model . That is , transitioning from one large-scale monolithic system to another , replacing old technology through a long , expensive and risky implementation .
digital transformation projects fail . This is because it is difficult to know what the best tech stack looks like – and what ’ s best now might change in six months .
For a notoriously risk-averse industry , the conventional route is ironically the most perilous . It ’ s new technology that enables financial institutions to mitigate risks , test models and strategies , and implement them in a controlled environment .
The future , then , is about in-built agility and adaptability – made possible through the
composable banking approach . Rather than outright replacing systems in one big bang , a composable approach involves building the new to integrate with the old
76 October 2021