For years, as financial services became increasingly digital, #credit scoring remained stubbornly unchanged, but there are indications, #from the regulators on down to startups, that this is finally changing. From machine-learning-based underwriting to #blockchain-based identity solutions, new #technology is transforming the business of borrowing money. New companies in the credit-scoring space are using AI and […] Bank Innovation
#Millennial#women have the funds available to start #investing, but are #held#back by a fear of beginning the process, as well as the typical reason most millennials aren’t investing: #debt, a study released yesterday by loan provider #SoFi found. While 53% of millennial women have emergency money set aside — about three- to six-plus […] Bank Innovation
The #Reserve#Bank of #India (RBI) strikes #cryptocurrency again. This time India’s central bank issued a statement today banning all entities that fall under its regulation, #from dealing with any cryptocurrencies. Since RBI is India’s central bank that means all the country&8217;s #banks and FIs fall under RBI&8217;s authority. Today’s statement read: Technological innovations, including […] Bank Innovation
Joining clubs, conducting #financial presentations or offering free dinner seminars are time-consuming and expensive ways to find new clients. Now #SmartAsset, an online financial resource, is tapping its 37 unique monthly visitors to offer them a way to find a local financial advisor. Financial Technology
The Securities and Exchange Commission is telling investors to ask their #cryptocurrency platforms 13 #questions to weed out the “”potentially unlawful&8221; ones. In a statement released yesterday, the SEC released 13 questions for investors to ask as a means of identifying crypto trading platforms that could be illegal and thus dangerous to investors. See the …Read More Bank Innovation
Legendary magician Harry Houdini used to perform spectacular escapes #from handcuffs, straitjackets, ropes and chains, and often combinations of them. One of his most famous and difficult escapes was the 1904 London Daily Mirror Handcuff Challenge, where Houdini managed to escape from a pair of handcuffs that had taken a Birmingham blacksmith five years to perfect.
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Many bankers see the traditional application service provider (ASP) #model for managing their #core systems—renting the use of core #banking software centrally hosted and managed by a single vendor—as a set of handcuffs they cannot pick. The ASP model proved useful in the early 2000s in helping #banks lower costs. Yet over the years, the constant adding on of various components (think digital user interfaces or new payment types) atop 30-year-old #technology has created an increasingly complex maze of systems that is now hard to maintain, difficult to integrate, designed for “vanilla” service, slow to change and costly to service. Add to that the frustration of vendor-controlled product releases that can take the #future of banks’ IT innovation out of a CIO’s hands.
If banks are to have a chance of competing for customers’ attention and business against the likes of Amazon, Google, Alibaba, fintechs and others, they must devise a clever escape from the constraints of the ASP model. Digital rivals are built bottom up on IT systems that are open, scalable and flexible, enabling innovative services, high-speed responses and efficient operations. Banks need the same traits to be future #ready—to connect with broader digital ecosystems and deliver hyper-relevant services (financial and non-financial, human- and automation-supported) through multiple and rich channels in real time. Those banks unable to rise to the occasion risk becoming digitally irrelevant and targets for acquisition.
Luckily, the typical ASP model is not escape-proof. While Houdini was an illusionist who used tricks to perform his death-defying feats, banks can take a few well-staged steps to truly #free their core banking systems and become future ready.
It begins with designing the bank’s future-state IT architecture. For the future-ready bank, we envision the ASP model evolving to serve as the engine for Systems of Record, Messaging and Services activity. It will be open, modern, secure and agile enough to allow for seamless integration of applications, API management, Cloud hosting, and plug-and-play of best-of-breed technology. Rather than having the lion’s share of its IT served by a single ASP provider, the bank provider pool becomes more diverse, fluid and adaptable. Then, banks will need to rewire their IT delivery organisation to adopt a multi-speed approach, operating and simultaneously supporting multiple business objectives. They will also need to “hollow out the core” and diversify the providers of IT technology for greater flexibility and innovation. Houdini used keys and cutlery; banks can use processes and technology to free themselves from the handcuffs of the ASP model.
Read our recent report, Breaking Free of the ASP Model, for a closer look at how banks can break free of their ASP model—and how a few banks are already doing it.
An unknown hacker or #hackers#stole $ 6 million #from a #Russian#bank in 2017 #through the #SWIFT international payments #system, the Russian #central bank said according a report by Reuters today. The Central Bank of #Russia said that it had received information about “one successful attack on the work place of a SWIFT system operator” […] Bank Innovation
Indian #fintech#RazorPay has raised $ 20 million in a Series B for its #payments#gateway, the company announced yesterday. A round led by #Tiger#Global, as well as Silicon Valley’s Y #Combinator, the influx of capital brings the #startup’s total valuation to more than $ 100 million, TechCrunch reported yesterday. The funding should allow the startup […] Bank Innovation
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