PART 8: Design, Build, and SaaS

In the modern banking landscape, the focus has shifted to configuring and parametrizing your new system rather than building new core features. Customizations that require design and development are typically found in integrations. If you find yourself dealing with numerous core developments, it's time to reassess whether the selected system is fit for purpose or if the requirements process is being manipulated to reverse engineer the new system back into the old one.

Fit for Purpose

If the new system is not fit for purpose, it may not be ready for the local market or support the local model bank. This could lead to significant development, testing, and certification efforts. ?If you decide to proceed with a system that is not fit for purpose, consider negotiating for royalties from the final localized product and for maintenance relief, as the journey ahead could be costly and challenging.

Avoid Recreating the Past

Recreating the old system with a new one is a common mistake and risks entrenching outdated methodologies into the future framework. This becomes especially problematic when the new system diverges from local banking standards, hindering seamless integration. However, replicating outdated structures inhibits progress and undermines the potential advantages of adopting a new system. To truly harness the power of technological evolution, embrace change rather than recreating the past. ?

The Role of the Vendor and Your Organization

The vendor should handle the core overnight and intraday processing, but your organization will also need to integrate, schedule, and instrument parts of the operating environment. You will need to develop data migration routines and reconciliation reports. While vendors typically provide data upload tools, they usually do not offer extraction, transformation, or reconciliation routines.

Integration and Ancillary Modifications: The Key Build Area

While the focus primarily revolves around configuration rather than customization, certain areas demand dedicated design and development attention. The primary area that requires a “hands on” approach to build is integrations and ancillary modifications. You also need to integrate operations, which likely involves some development or scripting.

Critical Design and Development Areas

Several areas often require significant design and development, often termed as “the long poles of the tent.” These include data extraction, business intelligence, and reporting, which feed numerous tertiary consumers within the banking ecosystem.

Navigating Complexities

Finance GL and reconciliation (match and kill) also require attention, especially if the chart of accounts is changing. Business intelligence and bridging transactions and data become focal points in ensuring a seamless transition without compromising operational efficiency. Customer correspondence, statements, and terms and conditions also sometimes take longer than expected, depending on the specifics of the situation.

Challenges in Integration: Payments, FinCrime, and Regulatory Compliance

Navigating the labyrinth of payments and FinCrime integration unveils a complex web involving multiple service providers and the need to consider clearing and settlement. Stringent regulatory frameworks add layers of complexity, necessitating meticulous adherence and consideration throughout the integration process.?

Phased Implementations: A Delicate Balancing Act

Phased implementations present a multifaceted challenge, entailing complex designs and rollout considerations. The confluence of technological intricacies, regulatory compliance, resource allocation, and operational complexities underscores the need for a comprehensive approach.

The Final Stages

The culmination of this transformative journey leads to running a business system that requires technology operations with instrumentation and monitoring. Automation of intraday and overnight operations, alongside the development of transitional systems like change portals, serves as the bridge between legacy and innovative systems.

Conclusion

In the banking sphere, transforming systems requires a careful balance between design, build, and the use of SaaS solutions. Navigating this landscape demands a strategic approach, prioritizing integration, meticulous development, and a relentless focus on aligning with local banking standards. By focusing on configuring and parametrizing the new system, avoiding the pitfalls of system transformation, and leveraging the benefits of SaaS, banks can successfully navigate the complex process of implementing a new system.

How do you envision the future of banking technology amidst the shift towards SaaS solutions and the challenges of system transformation? Share your insights and experiences in the comments below!

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