Future-proof Banking Solutions
Industry requirements often outpace technology solutions and there is a continuing need to plug this gap. This is especially true of the banking sector. Software companies have to be somewhat intuitive in terms of product design and development, in order to cater to the emerging trends and to stay in line with market dynamics.
In the Core Banking context, software vendors develop products based on current demand or a foreseeable future need. This is either communicated by the banks or the vendor gleans background information as part of project implementation. Any development activity based on future requirements involves a great deal of expense. Vendors should therefore be prudent in judging market dynamics to ensure adequate returns and also have a contingency plan to fall back on in case of poor market response.
However, barring a few basic products and services, banking is largely a dynamic industry with new products and processes being added based on customer demand. Keeping pace with this rapid change is a challenge in itself for IT vendors. It would therefore help if these vendors maintained a portfolio of need-based products which can be customized on demand. These products need to be agile enough to swiftly accommodate newer features with minimal expense and effort.
A vendor can launch a slew of products including structured, insurance and insurance linked products with a savings account, or accessible through the Internet or handheld devices. Apart from market acceptance of these products, prevailing domestic and global economic conditions such as inflationary trends, currency fluctuation, foreign exchange reserves, stock market stability etc. go on to influence the decision-making process at the product conception stage. While most vendors have predetermined strategies, current market trends do play a crucial role during this phase. Vendors need to recruit people with banking industry knowledge and exposure in order to gain critical insights into the business and its future trends. These future-proof products should be as relevant ten years hence as they are today. This would result in a positive impact on the banking business by way of portfolio and profit enlargement and also ensure continued patronage for the vendor.
Technology is indispensible to banking success but overspending on technology can hurt the banks' profits. Newer technologies should be adaptive without being expensive and must help minimize maintenance costs. Banks, along with their technology partners, need to do a bit of crystal-ball gazing in order to predict what would work in the future. Getting this right would ensure long-term success for both - the bank and the vendor.