Building the Framework for the Future of Banking

Technology innovation seems to be moving at warp speed – but in the eyes of banking customers, it’s simply the speed of life.

Real-time alerts, mobile everything and a consistent experience across every channel are now expected. Financial institutions are challenged to keep up while balancing spending and even reducing operating costs. It’s a daunting task, but exciting developments in back-end banking technology are creating new possibilities for innovation, integration and a better customer experience.

A new approach to banking technology uses an enterprise services framework to overhaul the way individual solutions are connected, supporting comprehensive, real-time information sharing. This advanced integration environment brings together cloud, mobile, social and fast data to create a digital enterprise. And it signals a major transformation.

Organizations using this infrastructure gain unmatched market agility. They can achieve sustainable cost advantages, deliver new capabilities more quickly and efficiently, and create a truly unified cross-channel customer experience. They’re also well positioned to take advantage of future innovations yet to be imagined.

The Challenge of Today

Over the years, banking technology has largely evolved with an add-on mentality. As new technology is developed, point-to-point integration is used to connect a new solution to each existing application. This method is effective, but it adds complexity. For example, the integration of 20 applications using a point-to-point approach could involve the creation and maintenance of as many as 380 interfaces.

If the integration bramble becomes overgrown – taking too much time and energy to maintain – some financial institutions make the strategic decision to abandon their existing setup and replace everything with the latest solutions. This move provides temporary relief from inefficiencies that slow the introduction of new innovations, but it’s a major undertaking. And many organizations don’t have the budget and resources to replace every application.

The Framework of the Future

Enter the long-term strategic solution: an enterprise services framework. This standards-based architecture uses industry-leading technology and universal services to connect every banking solution to a comprehensive integration platform, which disperses information across all systems and channels. New solutions can be plugged into the framework, and their capabilities are shared with all other components. The result is a greatly simplified integration environment that can reduce the number of interfaces by more than 80 percent. The 380 point-to-point interfaces in our example could be shrunk to around 40.

This type of connectivity is unprecedented, and it opens the door to gratifying new realities. Organizations can weave together multiple solutions of different programming languages into a single cohesive solution – putting technology assets to work like never before. The framework orchestrates the flow of activity, simultaneously communicating with all systems in each system’s language.

Organizations can also automate essential business processes that reach across disparate business areas and systems. Imagine an account opening process where data is entered just once and automatically disseminated to all relevant platforms: teller, account processing, content management, online banking, bill pay, mobile, alerts and more. Or imagine completely reinventing the online car buying experience to put the customer in control of the process rather than the lender or the seller.

An enterprise services framework can also provide the basis for a real-time omni-channel customer experience. Let’s say a customer sets up an automated payment in online banking. When this month’s payment is made, his account balance drops below $1,000. A real-time push alert is sent to the customer, who immediately transfers money into his account via mobile banking. In this scenario, bill pay, online banking, mobile banking and the account processing platform are operating as one – providing added value for the customer.

Considering the vast potential of sharing services, information and workflows across channels, the possibilities are endless.

Pushing the Experience Envelope

An enterprise services framework operates invisibly behind the scenes, and yet it can make all the difference in delivering a mobile-driven, highly advanced customer experience. And for a bank’s IT staff, it could mean being saved from a “rip and replace” event by instead transforming current banking technology into an efficiency-driving machine with the flexibility to continue meeting their evolving needs.

Perhaps most important, as new capabilities on the horizon begin to come into focus – such as solutions that tap into the full power of big data – organizations that leverage an enterprise services framework are ready to respond. It’s part of a proactive strategy to benefit financial institutions and their customers – now and into the future.

Niranjan “Ram” Ramaswamy is a vice president of Product Management at Fiserv.