Core banking systems & suppliers | Evolution of Banking Architecture From the traditional branch banking where new innovations
were driven by format and offerings, the investments in channels have significantly moved into the digital world & SOA. This can be observed by the new age innovations in video- bankingwhere the customer could speak to his branch or relationship manager over a video call, or driving active presence in the social media. For instance, while Barclays has rolled out the video banking services in the UK for its customers to have a video conversation with their advisors, ICICI Bank in India has launched a service for the Non-resident Indian customers to reach their customer care representatives from anywhere in the world over their smart-phone.
The arrival of cloud and big-data have only made the
volumes of data that a bank now has access to, multiply manifold. This has seen horizontal layers put across the silos at the data and sub-ledgerlevels. The efforts are towards the much-touted‘golden copy’ or ‘one source of the truth’, replacing the different sources of data with a single layer. There is more focus on reference data generally, including BICs and IBANs in the wake of SEPA, and on much better data management as a whole in light of recent events. The ‘thick’ sub-ledgeris similar, with banks looking to build a single repository to feed all of their regulatory and management reporting needs. The knack is not merely to populate the data repository but to link the data in the sub-ledgerback to the underlying transactions. Suppliers benefitting from the thick sub-ledgerdemand have been the likes of Fernbach (now owned by Moody’s) and Financial Architects (now part of Wolters Kluwer).
A flurry of global activity in the area of payments has created
another architectural shift. This trend is not only observed in the space of retail payments, but in the B2B and cross-border payments industry as well, which have seen significant advancement. The push for real-time processing, especially for payments, puts pressure on the batch back office systems, so too the demands of more sophisticated and joined up channel solutions. There is more focus on the front- end in selections, especially channels, which is one reason why we have seen acquisitions by Misys and Temenos of supposed best-of-breed channel solutions. There are no easy answers for banks. As well as all of the business and competitive pressures, the regulators will also clearly have a major say in the shape of things to come. As always, this report seeks to highlight some of the dynamics and trends in these troubled times, drawing on our annual analysis and augmented with other pertinent facts, research and commentary.
A best-in-class architecture design looks at 8 layers of the
bank: the channel layer that interfaces with the customer, the services/front-office, risk/middle-office and core/back-office layers of the core systems, the analytics & reporting layer dealing with the business intelligence, the support layer that helps with the back-end functions, the external layer that includes inter-bank and payments and the inevitable middleware layer that stitches them all together. While the traditional and conventional layers of Core banking, Lending and risk do continue to remain important, a much higher share of incremental investment has clearly been observed in the areas of digital banking – primarily driven by internet and mobile technology, payments – an area that has been most spoken about both in the technology and banking circles.
14
Market Dynamics Report 2017 |
www.ibsintelligence.com
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