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Banking Software: Challenges Vs Opportunities

Banking Software: Challenges Vs Opportunities

By Nicolas Mesaritis, CTO, ECOMMBX


Banks as we know them today have a diverse portfolio of products and services that are continually adapted to the needs of individuals and corporate clients. Apart from interest-related fees, most of a bank’s revenue is generated from service fees, loan origination fees, charges for safety deposit boxes, brokering, securities, arranging mergers and acquisitions for firms, etc. 


While the variety of products and services grows, deep and far-reaching regulations are complicating most processes and leading to delays. To increase competitiveness, forward-thinking banks are on a quest to minimize – if not eliminate – bureaucracy, to reduce delays and improve their customer experience.


The way forward


The fact is, there is only one way to achieve that effectively and securely: Banks must find a way to simplify and automate their business processes wherever possible – and then some. It is precisely in this direction that the financial industry is witnessing unprecedented growth: it is also known as the fintech revolution. The demand for technology that will speed up transactions, while meeting all compliance requirements, has led to a virtual explosion of new companies and software houses that offer a plethora of fintech-oriented niche solutions.


Indeed, it is hard to keep up with the number of fintech startups with a multitude of offerings and software products that promise to simplify, automate and digitize banking processes, ultimately to improve the overall customer experience. In most cases, we see relatively small financial services providers – compared to the actual banks – which focus on a very specific area of the industry. Every software solution is conceived and designed to address a very specific problem that the financial industry is facing, or to automate one part of a complex existing process. Well-known examples are Revolut, a popular option for individual saving accounts, and Hellas Direct, with its signature Insurance Services. 


Accepting the challenge


It is worth noting that some fintech solutions are offered as a service, while others can be licensed and run in-house. Having so many options to choose from is not all positive: different solutions usually demand different infrastructures and different operating systems, and they are often developed using different technologies.


Banks often face a multifaceted challenge: not only must they decide which processes and products to digitize and modernize, but they must also ‘pick and mix’ software components, making sure that these can be smoothly and successfully integrated. After all, the object is to make life easier and simpler, not more complicated, for both the service providers and their customers. Quite often, the challenges of the pick-and-mix principle are not immediately discernible; this is a case where foresight, vision and a comprehensive approach – combined with subject expertise – will prove to be invaluable.


And there’s a hidden catch: Due to its sensitive nature, the banking industry and its technologies and services are not open to anyone on the outside. Professionals in the field, who deal with payment systems and are familiar with their specifications, are bound by non-disclosure and confidentiality agreements to protect such information. Therefore, in the pursuit of digitization and automation by using modern software technologies, banks and financial sector companies are in a constant race to hire the best talent from a limited pool of professionals. But while the challenges are considerable, the benefits certainly outweigh them.


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