Another important contributor to system complexity stems from the traditional approach of deploying end-to-end processes for every Line of Business (LoB) module. Over time, this has resulted in the unnecessary replication of even basic functionalities and horizontal processes that could structurally be shared between modules.
Banks have to start by identifying components and processes that are common to different LoBs so that they can be reconfigured as a horizontal layer of services that is shared across business stacks. Apart from the obvious payoffs in terms of reduced costs and enhanced efficiencies, the shared services model also has a positive impact on customer experience. Deploying customer onboarding functionality on each channel, for example, will only lead to fragmented customer experience across channels. On the other hand, centralizing common functionalities such as onboarding ensures that customers need only go through the process once, and then proceed to conveniently transact on all channels or even switch between them during a single transaction without losing context.
Spaghetti interfaces are yet another legacy of the product-centric days of banking. In many cases, the proliferation of applications, processes and interfaces was addressed by ad hoc interventions that created stopgap solutions. Most banking systems today contain complex patchworks of spaghetti interfaces that only amplify systemic complexity and create a drag on productivity, efficiency and performance.
Banking has always been a complex business and it does not promise to be any less so any time soon. But in order to be responsive to the inexorable demands of 21st century banking, banks have to start by simplifying their existing technology systems.