The importance of a core banking system that is flexible, real-time, and low-cost is undisputed within the industry, as are the challenges inherent in replacing legacy systems. SaaScada’s remit is to provide a system that has all the required qualities with none of the fuss – bringing real added value to its customers.

Nelson Wootton, CEO of SaaScada, explained: “When we set about building a core banking system to create the Change Account for the Big Issue Foundation, we could see that intrinsically and architecturally, the way core banking vendors have traditionally thought about core banking was no longer fit for purpose. Following that experience,      we decided to go on a journey to address some of the issues that we saw with core banking, providing banks with core banking technology  that was going to give them agility and flexibility at an incredibly advantageous cost point that, at the moment, they just don't get.”

What does good look like?
Wootton went on to describe his view that the ideal core banking system should only handle commoditised core functionality such as ledgers, real-time data and product configuration, rather than also featuring customer-facing functions. Indeed, Wootton said that of all the things that differentiate banks, customer service, CRM, user interface, user experience, and the like are what banks should be investing in, while core banking systems should be both commoditised and low cost. It was this belief that drove the creation of SaaScada, to provide the core on which banks could build their unique offerings leveraging SaaScada’s open APIs to build a best-of-breed eco-system.

This goes against the perception that tall banking systems with multiple integration layers and APIs sit outside of the core. “We think that real-time data, the way it is consumed, and how, should be within the remit of the bank. The job of a core banking system is to facilitate whatever the bank requires.” Wootton continued: “You should be able to have data as and when you want, whenever you want, as much as you want, and in any format, you want.”

To deliver this, Saascada uses Cloud-native architecture; event sourcing and Command Query Responsibility Segregation (CQRS). Event sourcing processes transactions in real-time as read-only unstructured data dramatically lowers costs by 40% to 50%. CQRS also mean that the bank has a real-time copy of the data to use in any way they wish to gain customer and business insights - without the risk of impacting transactional throughput. This way of processing data in an unstructured format will come into its own once Artificial Intelligence (AI) is leveraged widely. It will allow quality data to be fed into the AI, which, in turn, will make for better front-end tools and digital services, as well as the application of analytics to understand customer sentiment and behaviour and make strategic decisions accordingly.

Implementation
The technology is clearly there, but the challenge is to replace a legacy core banking system with a new one while maintaining business as usual. This is something that many firms struggle with, and thus, by fostering a culture of innovation and by thinking creatively about how to best embark on digital transformation.

“Our ability to morph and create any data set allows us to sit alongside an existing core platform to a larger degree. So, we can feed our data into existing reporting systems, and then the reporting team pulls it from different databases and sews it all together. If you tell us the format you need it in, we can deliver that and break down some of the resistance of having two systems running together,” says Wootton.

Managing change
“An organisation going through change isn't really just looking at technology, it's looking at the people, at the business processes… this is a leadership challenge with layers and layers of complexity – change does not just happen overnight,” Wootton points out.

He explains that an iterative approach will often start out in a narrowly focused manner, and then move over to integrate other elements into the new core banking system bit by bit. Due to this iterative approach, putting a time scale on implementation is sometimes difficult, but the idea is that moving to a new technology and adopting it should be less painful and time consuming than continuing to use something that is no longer fit for purpose.

“We try and move things over in chunks for people. Often there’ll be products that we run down or cycle through, such as annual bonds, loans, for example. They might have periods where you can run down a book on one side and run up a book on the other side of your platform,” he explains.

“Nothing makes me happier than looking at core banking in a really different way and trying to solve some of the challenges that we ourselves faced as bankers around reporting and data and some of tomorrow's challenges when we look at data and AI”, he concludes.

About the Swiss WealthTech Live 2024
Our Swiss WealthTech Live 2024 event took place in Zürich in February and hosted some 160 market participants from private banks, cantonal banks, external asset managers, family offices, technology vendors, consultants, and more to express their views, experiences, and visions for the future. We celebrated a full day of keynote presentations and panel discussions, with plenty of networking opportunities.

During the event, we also released our Swiss WealthTech Landscape Report 2024. This issue of the report includes 24 thought-provoking articles, 10 Solution Showcases, and 539 entries in our Solution Provider Directory.

Access the full report here.