During the past seven to ten years, the word 'FinTech' went from being used by a small number of experts to being mainstream and trending among the general population. New market needs emerged and paved the way for the advent of increased digitisation. But if the current FinTech technologies allow banks and financial services providers to fully cover their needs, the question of data and functional centralisation is now emerging.

As stated in a report from Deloitte, before 2014-2015, the word 'FinTech' was anecdotal in the online search engines, although the industry had existed for more than 20 years, especially covering marketplace lending and payments. The rise of awareness observed in 2014-2015 correlates to a massive increase in FinTech creations: there were four times more FinTech companies founded in 2014 compared to 2008.

When this trend emerged, the FinTech industry was mainly focusing on payments and services to end-users. The idea here was to provide new services or ease access to existing ones. Nowadays, FinTech seems to be focusing on niche and disruptive features which is made possible by the use of modern technologies such as APIs, AI, NLP, ML etc. Being a bank or a financial services provider, it is now possible to implement a software application that will provide a state-of-the-art solution for any step of your internal and external processes, and maybe even fulfil needs you did not even know you had!

In front of all those brand-new technologies and features, it becomes even more important to have a way to centralise the information. It is essential to make the most out of the bank’s data, whether it is coming from FinTech or from its internal production, and make it available through dedicated cockpits used by the relevant persons. The more software technologies and systems you have, the more complex it is to use their output efficiently.

Before starting to discuss the FinTech galaxy, we first need to address the backbone it will revolve around. The backbone here represents the core application subset addressing the critical business functions: Relationship Managers (CRM), Portfolio Managers (PMS), Back Office (Core Banking System) and the Electronic Document Management System (EDMS). It is what the bank needs to perform its daily business from a system point of view.

As stated in the Cap Gemini report, Banks and Wealth Management companies are focusing on the possibility to digitise every step of their journey, whether it is from an internal or a client point of view. But to be able to do this, they must have solid foundations first. Zooming in on a private bank organization, we see that the priority in terms of systems is to cover the business functions mentioned above.

Before looking at any fancy new technologies, it is essential to cover those functions and make sure that the Core Banking system, Portfolio Management System, CRM, workflow engine, reporting and digital banking are robust and perfectly integrated. Those systems will be the foundation of the fintech integration, since most data will originate from them, and most outputs produced by the FinTech "satellites" will need to re-integrate them. This core platform then needs to be secured.

Having those elements in mind, two key topics arise here: integration and connectivity. The core platform addressing the essential functions of the bank must display and use the same figures and elements
throughout the whole application set. This is made possible by having a full and robust integration between the different technical components. On top of that, those different applications must be open to the outside world to receive the added value provided by FinTech and RegTech companies through, for example, public APIs.

The challenge for the banks is then two-fold: integrating and securing the backbone application while keeping it open and flexible. Once this is achieved, those different applications must work together to provide information to the different teams in a centralized cockpit.

The term ‘Digital Centralisation’ encompasses different aspects of the technological ecosystem. The first one is Data Management. As a bank is equipped with a core platform application coupled with a FinTech, the main challenge after integration would be to make all the data available where it should be required. That central requirement is achievable with the 'backbone' we discussed previously. It is important to have this possibility to broadcast data from a central access point, making sure the information displayed in the Core system is the same as the one seen by the front or the client. Integration is the key element here as banks have a huge amount of data, and FinTech companies are going to bring even more. Therefore, broadcast and synchronisation are the cornerstones to using this data efficiently.

Once all data is technically broadcasted to all relevant parts of the system architecture, a centralised cockpit must be set up. It is the ultimate step to centralise the data, bring it to the end-users and allow them to efficiently use it.

This encompasses two main functionalities: live reporting/KPIs and the features' transversal usage. Let’s take Accounting Analytics as an example. In a bank, this kind of information is usually calculated by the back office systems (Core Banking, ABOR). It is relevant for various businesses across the organisation: top management, back office, operations and even relationship manager. Indeed, the front office users need to have accounting based information like their clients’ profitability, a view of their budgets, the discounts, etc. They also require interpretation and scoring to get, for example, a portfolio and client health check, the next best action to proceed, a scoring, etc. the kind of algorithm most of the time provided by an external system (FinTech/RegTech).

In this particular example, we have demonstrated the need for different components mentioned above: integration between the system, data accessibility through the application set, and of course, the need to be open.

New Access Core-to-digital solution suite is built to support the two aspects described previously.

From a functional point of view, it provides private banks and wealth managers with a fully integrated backbone that will be leveraged when integrating FinTech and RegTech companies. It is also the right entry point for digitising the clients and bank’s journey with its modern CLM and workflow engine applications which, combined, can provide an intuitive cockpit where all information will be centralised. This cockpit would contain dynamic alerting, reporting and widget features that will make the most out of the bank’s core applications as well as all satellites revolving around it.

From a technical point of view, the set of applications available in the integrated Core-to-digital solution has been built to be modular and open. It means that, since all those modules can also work as stand-alone, they also can be integrated within any third-party system. Every part of the application has its own public API allowing the bank to connect to any other system (FinTech or RegTech) that will answer a specific need.

New Access is currently working with technological partners to address specific requirements such as portfolio optimization, document processing through NLP, etc. and is in this regard, the right partner to build solid foundations, start your digital transformation and be open to leveraging what the FinTech’s world has to offer.

If you wish to receive more information about New Access Core-to-digital solutions, please contact us: sales@newaccess.ch

Access the original Whitepaper here.