The financial services industry is facing significant change. In today’s digital environment, financial organisations have realised without a comprehensive digital infrastructure; it’s impossible to bring services to market as quickly and efficiently as they would like – and need.The pandemic put a spotlight on the need for digital transformation within the financial services market. But how can banks overcome the obstacles surrounding interoperability that prevent financial services from collaborating and moving forward into the ‘digital era’?
During the pandemic, banks were forced to become digital entities virtually overnight, with consumers increasingly anxious about their financial well-being and ability to manage their finances online. However, it became evident to the industry that the extensive use of legacy technology within banks, and a lack of industry standards meant the speed at which these established institutions could bring new services to life was often too slow to satisfy the customers demand.
The lack of industry standards has meant that banks continue to be restricted by having to work with partners based on their proprietary language and the way they operate alongside their existing ecosystem. This is instead of their functionality and how they could potentially transform the bank and its services. This limits the industry’s ability to deliver new best-of-breed services aligned to today’s digital consumer.
The need for collaboration
To innovate and overcome these obstacles, banks must prioritise working outside of their four walls. But to do this, it must be possible for financial institutions to communicate with ease, and transfer information securely and freely, rather than face barriers to this cooperation.
This is why the not-for-profit Banking Industry Architecture Network (BIAN) was set up in 2008. The organisation, which consists of leading banks, technology providers, consultants and academics from all over the globe, continues to focus on lowering the cost of banking and boosting the speed of innovation in the industry.
Members combine their industry expertise to define a revolutionary banking technology framework that standardises and simplifies core banking architecture, typically convoluted, outdated, and inconsistent. Its service landscape consists of banking business areas comprising business domains, each subdivided into service domains. A BIAN service domain represents a generic business capability for which BIAN seeks to define the standard canonical semantic service for the banking industry and deliver a universal language. This has provided a future-proofed solution for its members while fostering industry collaboration.
The most recent initiative from BIAN is a key example of how organisations can collaborate to overcome this lack of industry standards. BIAN and its members have worked together to design the Coreless Banking platform, which supports banks in modernising the core banking infrastructure.
This initiative empowers banks to select the software vendors needed to obtain the best-of-breed for each application area without worrying about interoperability and being constrained to those service providers that operate within their language. By translating each proprietary message into one standard message model, communication between financial services is, therefore, significantly enhanced, ensuring that each solution can seamlessly connect and exchange data.
With the capacity to be reused and utilised from day one, and the ability to be used by other institutions, the Coreless Banking initiative provides these endless opportunities for financial services industries to connect, collaborate and upgrade.
Setting the standard
It’s clear that the world is facing a digital awakening, and banks are eager to jump on board. It has never been more critical for financial institutions to be able to work together and communicate in a universally recognised language. Technology should not stand in the way of this, but enable development and further encourage both digitisation and cooperation.
Additionally, ensuring that the rapidly evolving consumer has everything they need in one place has never been more essential, and the time to enhance the digital experience is now. By collaborating to a unified and common set of standards, banks can overcome interoperability, embrace best-of-breed solutions across the board and achieve more than ever before.