analysis: application architecture
IBS Journal September 2015
Key trends in banking technology: keeping pace with the winds of change
What are the priorities for CIOs and CTOs these days? What are the technologies to invest in today and what are the ones to keep an eye on for the future? V Ramkumar, Partner at Cedar Management Consulting, summarises the findings in four key components.
The changing trends in the banking technology space are best reflected in discussion topics raised by CIOs and CTOs of pretty much any bank. Ten years ago, a typical conversation would be largely focused on the core banking and back of- fice systems that needed to be overhauled. Today, there has been a considerable shift towards service oriented architecture (SOA) and leveraging outsourcing models to drive cost structures down. Talk to any technology head in the
banking industry today, and it would be impossible to have missed the buzzwords of digital, cloud, analytics, mobility and big data. Obviously, all of these do have an impact on the focus areas and influence both the shape and spend on the applica- tion architecture of the bank. When looking at the trends of change,
a quick look at what is the typical appli- cation architecture of a bank is relevant. Cedar’s approach to architecture design includes eight layers:
■ ■ ■ ■ ■
Channels/interfacing with the customer; Services/front-office;
Risk management/middle-office; Core systems/back office;
Analytics, reporting and business intelligence (BI);
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Support layer that helps with the back- end functions;
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External layer (including interbank and payments);
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Middleware layer that stitches them all together.
38 © IBS Intelligence 2015
www.ibsintelligence.com So what do these new buzzwords
mean to the new banking technolo- gy architecture, and where is the impact mostly felt? What does it mean to a bank which has revelled in adopting state- of-the-art technology as these winds of change have hit the shore, and what does it mean to the new age digital banks who are looking to change the way banking is done? And more importantly, how do banks respond to these and effectively embrace the change, with the twin objec- tives of minimising disruption and maxim- ising adoption? The landscape of change, driven by
the advent of digital and its implications for the technology architecture, could per- haps be summarised across four broad trends that are observed, in some shape or form, across global, regional and local banks. Even for those who have not adopt- ed these as yet, the currents are felt to be quite strong that will indeed propel the investments and management focus in the direction of these trends.
Channel touch-point: the new age customer experience
Customer experience is the centre-stage of any services business. With the advent of mobility and the ‘internet of things’, banks have woken up to the changes around, and the threat posed by fellow players in other verticals – including telecom and retail – to the way in which banking will be done in the days to come.
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