The fight for ROI and the Win-For-All through Digital Transformation

It is not all plain sailing being a high-ranking manager in a financial institution. The primary objective in this position is to join at least the top 3 financial institutions in the country, or even become a market leader. You have to find new quality clients, significantly increase profit margins across product portfolio, decrease overall costs, cut NPLs, and deliver best Digital Transformation on the market, all while keeping everyone happy.

The odds that the CEO would grant you unlimited (or at least very generous) fundings are rather slim, so you would have no other choice but to perform all tasks while carefully managing very limited resources, always being on tight schedules and having insufficient manpower. It’s kind of a quicksand situation that doesn’t allow for maneuvering without getting you more stuck with every sudden move. You decide to pursue an open platform concept that would allow you to achieve superior ROI numbers. So how to get out of the quicksand onto the more compacted ground?

Future-proofing

Foremostly, you have to make sure that the approach is future-proof, would allow you to scale up in a quick way, and add or swap components easily when the need for upgrade emerge. For this, you would require a modular/microservices architecture with functional Integration component and well-defined APIs. 

Tools

The platform should come with pre-build tools, out-of-the-box (OOTB) configurable components, frames, configurators, Software Development Kits, APIs, etc. Generally, you aim for using proper, reusable components. Deployment of coherent and configurable Dictionaries module would allow new modules that you will add in the future, to link up with the same engine. Same goes with Parameters – why keep a separate Parameters system for Cash Management, Trade Finance and an FX portal? Keep them uniformed, cut maintenance and avoid the systems or data duplications.

Time To Market

Fast time to market is the key to keep the morale high and projects flowing smoothly. This can be achieved by selecting some basic OOTB components from the vendor, and deploying them “AS IS”, doing most of CRs later. Get OOTB configurators. Deploying modules is one thing, but delivering new versions of products and services to the clients is another. Using special configurators would allow you to create and publish new or updated versions of the products on the platform, and offer them to the clients within days, or sometimes even hours.

MVP deployment

As much as all project elements and functionalities have their own importance, and ultimately all are high-priority, it is better to roll out a Minimum Viable Product and start a pilot phase sooner, rather than wait for that highly awaited “Big Bang”. Even the most fresh system you’ve planned will most probably require major updates before you finish building it. Let “Friends & Family” do some testing while your teams deploy more modules.

Parallel Deployment

Running a project is not an easy task, we can all agree, but there are some tactics that can bring multiple benefits. If you start investing in an open platform and procure some modules from a vendor, you could speed up the pace a lot by bringing onboard your internal IT team, fintechs, or even external partners using Parallel Deployment capabilities. While the vendor is be busy deploying out-of-the-box modules, you can shop around. Maybe there is a fintech that has a great FX platform, or your IT team really wants to build the new TF portal by themselves, so you can incorporate these modules or products onto the platform. Surely the UX/UI flows and visualizations need to be aligned with current Corporate Identity of your FI. How? There are design systems (CDS) that can make it happen, no matter if one part of the system was developed by a vendor, and another by the bank. Since the application allows for plug-and-play modules, why not use company’s own as well as externally available resources? This way, separate, independent teams can deploy their own respective parts in a unified and uniformed UX layer that matches perfectly with the whole system. And in case something gets delayed – it is going to be a single module, not the whole project.

Reuse the existing pieces

Easier said than done, but there are still some components that could be reused, at least for some time, i.e. a fee engine. The wise decision is to plug in modern, configurable fee engine with the CRM system in order to have a 360-degree view of the clients’ products and fee accumulation. If this fee engine + CRM project is not happening right now, then maybe at this stage it’s better to keep the old engine for some more time, and funnel your finite resources back to the core project.

Keep your options open and the cash flowing

You won’t achieve good ROI if you get stuck with an unresponsive or inflexible vendor. Using OOTB development tools, you will be able to take ownership of the platform and make quick adjustments in code by yourself. You can procure satellite functionalities from external independent providers to enrich the offering. You can easily do it, because of the open nature of the platform. While keeping focus on core business, in parallel, you can open new revenue streams by providing additional services to your clients. How? Simply build partnerships with third parties, and present their offers inside your Open Banking Platform. It is a win-for-all situation: your clients receive a wide array of good offers, even outside of your standard offering; third parties get more business, as they can use your channels to get to a wider poll of clients; and you not only automated the processes and cut the processing costs of your core business, but can now cash in the commission on your partner products and services. 

If you start from OOTB components, then delivering them to the market most certainly is going to be more efficient, thus good ROI will be easier to achieve. Onboarding new fintechs and partners, as well as deploying your own services using configurable tools will also help tremendously. Since there is no vendor lock and your open platform can be indefinitely scaled up, it is really up to you how you want to shape this app. Maybe we shall call it a super-app, one day.

Take this step and, together, we will get there.

Author: Dariusz Trocyszyn, Consulting Manager South-East Asia