Jul 2017 | Credit Decisions |
By Posted by Vanessa Bailey

In the last 12 months, banks have made a significant shift to upgrade and improve their internal infrastructure, with the purpose of streamlining costs and to move away from maintaining expensive legacy systems. The questions we often hear today are ‘what does a re-platforming project look like?’ How can we do this as efficiently and as cost-effectively as possible?’ ‘How can it enable the business to refine our decision making on both new and existing customers?’

So, to help, my next few blogs will explore the barriers, restraints and opportunities as we navigate through the process of implementing a new infrastructure that will enable you to enhance your decision making. The aim is to provide a level of future-proofing in your design methodology, giving you a flexible foundation to grow from.

To explain, a ‘modernisation’ strategy is a process that ensures your infrastructure is fit for purpose today. It is modern and designed around current circumstances. More importantly, it is flexible to change – as and when needed.

Modernisation in today’s world and why it’s important

Modernisation needs to be aligned to the structure of your bank. In today’s world modernisation isn’t just about platforms and technology, it’s also about people and processes. More and more customers are accessing banking facilities via smart technology, such as their smart phone. In response, banks are focussing on the provision of better services via multiple channels including digital.

With an ever-growing need to find new innovative ways of delivering the digital customer experience, being able to join up departments and work cross functionally is now seen as a major area of competitiveness. Having the right resources in the right places at the right time, will enable banks to deliver better decisions.

By factoring in every department’s needs you create better digital journeys for your customers, delighting them by serving them instantaneously day or night, with a fast response to their needs.

Moving forwards requires fresh thinking

To move forward, sometimes you need to take a few steps back. This doesn’t necessarily mean starting from scratch. When planning your modernisation strategy, data is a logical place to start. Data is crucial to inform your decisions. Banks hold a wealth of data, but the challenge is to understand which and what data will help you move forward. What would help your business grow and more importantly what could you leave behind?

A good first step is to assess what data is adding value to your decision making and what you need for your monitoring and reporting.

Don’t be tempted to migrate all of your data from your legacy system, when it’s just not needed.

This is an opportunity to refresh your thinking to build the right platform to support your growth initiatives. Building the right base platform that allows you to easily integrate newer and more valuable data sources. This will enable you to make better decisions.

In addition, simplifying your architectural design will make it easier and cheaper to build. By only migrating what you need reduces the overall maintenance costs as collecting and hosting data is a costly exercise.

Take only what you need

Re-platforming can sound very technical and serious. Not to mention costly and disruptive. But, re-platforming is a little like moving house, you’ve collected and stored many ‘data assets’ over the years and now is the time to ‘clean the cobwebs’ and take with you only what you need and only what is valuable to you and your customers.

We have seen and supported many legacy systems over the years – and continue to do so. We’ve seen banks change and add bolt-ons to their current infrastructure in response to new requirements such as regulations and to accommodate more data. As a result, the now complex web of IT has become much stickier and much harder to clear.

With GDPR on the horizon, simplifying, cleansing and knowing what you have in your data assets is crucial for compliance with the new guidelines coming into force in 2018.

Making your systems flexible

This last 6 months, if not longer, change has been a topic that is hot off the banking press. Driven mainly by regulations including Open Banking, PSD2, updates to KYC and GDPR, it’s reported that banks are going through the largest transformational change in the history of banking. And this is just the beginning.

Banks now more than ever need to modernise and re-platform their legacy systems and IT infrastructure to stay competitive and keep up with the pace of customer-led changes. The industry is now turning its head towards an Application Programme Interface (APIs) methodology. A market that is expected to grow 300% by 2020, according to Forrester.

As APIs continue to come into the mainstream it is certainly one path that may be a solution. Transforming legacy systems into more flexible and responsive platforms that can accommodate change quickly and efficiently. As customers find new ways of engaging with banks both on and offline, what was suitable as a service 10 years, may not be today.

Make your infrastructure 21st century ready

To continue competing and protecting your customers in a 21st century environment, now is the time for fresh thinking. Are your methods and policies more 20th century than the 21st?   Will they stand up to 21st century disruptions – such as complex cybercrime, the impact of social media and evolving regulation?

We live in a cyber connected world which is constantly under pressure of threats from cyber-attacks and sophisticated fraudsters. Your IT systems require the latest security and fraud prevention methods to protect your customers and your business. Especially as trends evolve and we are seeing new methods to attack – response is critical. Responding quickly becomes more difficult when systems are sitting on old legacy infrastructures that can’t be updated or aren’t quick to update, to reflect the needs of today.

Whilst it may be perceived as expensive and complex to update an entire platform, it is more efficient to do so. You can then respond to change rather than patching and responding post-attack. Filling holes and fixing problems reactively with such patches is inefficient and costly. More importantly a risk to your business and customers.

Fraud, customer management, on-boarding, they all require modernising to enable growth. We aren’t just looking at a single area of change. We are looking at a complete platform overhaul. Having more agile and flexible systems can help you react through the ability to make fast updates. As well as apply more proactive controls and steps as your business strategies change too. You need the right people to inform what this looks like, but anything that puts the customer first and makes any process easier will be a benefit overall.

So, whilst there are many angles you should consider and many options available to you, what’s most important is you consider what you need now, and in the near the future. But, equally you are mindful of further changes and factor these into any system architecture so to prevent any restrictions for future updates. This way you are able to meet your customers’ needs as more evolution occurs. There is a lot to consider but these are my top three tips in the early planning stages:

  • Take a step back and look at the customer experience and your ideal customer journey. What data do you need in place to do that?
  • What data assets are you using in your decision making, and what data assets do you want to use? What data will add value to help you make more accurate decisions?
  • Pick a flexible tool that allows you to add and evolve your data and decision making
  • Let technology support your decisions. It can predict, inform and score customers accurately using data that is based on your lending rules.

Want to know more? Get in touch.



1 Forrester.com. (2016). Forrester Research API Management Solutions Forecast, 2015 To 2020 (US).