Core banking architecture

In 2009, Paul Volcker described the ability of the banks to change as follows: “The banks’ last true innovation was the ATM”. And even today, banks often struggle to actively drive innovation and make their business models more efficient. However, the challenges facing financial institutions these days really demand decisive and targeted action.

The foundation for a successful implementation of the digitalisation strategies defined by almost all banks is a core banking architecture that places the focus on data and processes. Existing processes need to be reshaped to be more efficient, and new solutions need to be developed for changing customer needs. The following areas for action within the core banking architectures should be reviewed in detail:

• Data digitalisation and structure
  With the use of modern machine-learning algorithms, there are established systems on the market today that can be used to digitalise the analogue data that is still all too common. The challenge lies in its targeted integration into the processes and overall architecture.
• Preparation of data with analysis and evaluation functions
  A central operational data repository can provide relevant data and store it in a traceable manner. This enables banks to keep customers informed automatically and proactively. It is important here that no competing data repositories develop within the IT architecture!
• Support for workflow and automation of business and system processes
  In order to realize potential efficiencies, comprehensive workflow management solutions in conjunction with data repositories are a basic requirement.
• Modularisation and expansion of value chains
  Nowadays, banks are increasingly incorporating fintech innovations, building on their own innovation labs and “digital factories” to accelerate the innovation process, and pursuing open banking strategies. With increased openness, modularity and flexibility in the IT architecture, you also need to ensure that the solutions’ security and stability requirements meet the bank’s requirements in the core banking areas.
  
• Comprehensive multi-channel support
  The demands from customers relating to the user experience when using services have increased significantly, especially thanks to the use of digital platforms. When defining your target, architectures must be flexible enough that any new regulatory or market requirements can be implemented quickly and across all channels.
• Transition to 24/7 operation with real-time processing
  While the electronic customer channels are now available 24/7 at almost all banks, the differences show up in what data is supplied to these channels. A wide range of variations can currently be seen in the market – ranging from some showing transactions only with an update once per day, to some showing every account transaction in real time. Real-time is the goal: That’s why banks should now define an approach that suits them and that can also cover real-time requirements.

Our experts will help you develop solutions that are tailored to your specific needs. We analyse your core banking architecture, come up with potential areas for adjustment and development, and guide you throughout your journey to your target architecture.

Typical consulting services include:

• Digital readiness assessment:is your application architecture able to handle the short innovation cycles and rapidly changing needs arising from digitalisation projects?
• Developing a target destination for integrated process and data management:how is multi-channel support going to be achieved, including the digitalisation of the process steps mapped out for each channel, so that you can exploit synergies and provide your customers with a consistent customer journey?
• Developing an API strategy and API governance: Application Programming Interfaces (APIs) can generate innovation and partner involvement and loyalty. These complement, modularise or replace existing value chains, as required by PSD2 since September 2019. We understand the challenges of offering open APIs. We help you address this through appropriate API management solutions, an API strategy that fits with current architectural paradigms such as micro-services, and by establishing end-to-end, regulatory-compliant API governance.
• Developing an architectural road map for operational information and data management:information is the basis for every transaction and process. How do you ensure that analogue and digital data can be offered to all parties in a standard manner across all media without disconnects? What steps do you need to take to achieve your target position, and what components of the architecture are affected?