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The digital era brought a great impact on the banking business where the need for the digital offering of financial services is higher than ever before.
In order to answer to new market needs, banks (and other financial institutions) are in the position that they need to use advanced software solutions in order to efficiently and securely manage everything from online customer onboarding to the internal processes and customer (private) data storage.
This leads us to witness a skyrocketing number when we speak about new software implementation and market size predictions of 15% YoY growth in sales of banking software solutions.
However, choosing the right banking software for your needs can be a challenging task, since every one of them has different modules, functionalities, and commercial packages and before you opt-out for a specific one, we suggest that you consider the following factors that can help you properly evaluate the software solution.
Prioritize your future software functionalities
A lot of companies sometimes exaggerate in assessing their own needs, which can lead to not paying enough attention to each task. That is why it is important to have a list of new banking software requirements so you can focus on the right strategic business points you would like software to solve, from the start.
Having “an eye” on the essential things you expect software to do for you will enhance the ROI you get and reduce the risk of making a wrong decision while trying to select an ideal banking software solution for the given case you have.
Bearing this in mind, in the following paragraphs we will talk about the basic priorities, which will help banks cover as many as possible necessary points that can help them make the right decision in the decision-making process of buying a banking software of any kind.
Advancement of personalized experience
Today, it isn’t enough to offer generic solutions to customers. There’s a need to take a step forward from the traditional way of client management and talk to each client as an individual while building a strong relationship with them.
All interactions with the buyers should be personalized and there should be consistency in the client’s engagement through different communication channels at any time and from anywhere.
And this is why it is very important to bear in mind that while choosing software for your bank you must be able to properly support all the processes and communication channels you have or you might have in the near future so you can go for the win in the game for the long run.
Improvements in digital safety (without disturbing the buyer’s experience)
In the last few years, the level of information theft had risen, as a risk of a hacker attack. It’s not a matter of if, but when there will be an attempt to breach into the system and acquire classified client info.
The potential of data losses in banks means that they should step up their safety game.
In order to manage digital risks successfully, banks should apply software buying strategies where unified authentication over all channels becomes one of the top priorities for future software omnichannel solutions.
Besides, that security should be on top of the list of purchase managers in charge of any kind of banking software from BPM to the solutions for digital customer onboarding.
But, one thing must not be neglected through the whole process: user experience.
The user experience should be on a maximum level while we strive to enhance security levels and we should not forget that at the end of the day humans should use our solutions.
Adapting to the new technology trends
To attract new clients, banks would have to amaze their potential clients with the most advanced technology, which would spark their loyalty.
It takes time because acquiring outstanding banking mechanization, can’t pay off instantly but in a long run it is out of the most important strategies bank can make.
Here we talk about implementing new technologies and tools such as AI and ML banking solutions that you can also see in our products for online customers onboarding like Digital Origination.
Banking Software Architecture
To improve the banking business, while giving clients more personalized services, banks constantly need technological improvements.
This is why adequate software architecture is one of the strategic buying decisions banks could make in order to innovate services.
One of the perfect banking software architectures for that is microservice architecture.
This type of architecture allows banks to continually develop smart software applications of big proportions.
Splitting the application into several (micro) services would increase speed and quality of IT implementation and business as well as reduce new features development.
In practice, banks are enabled to simultaneously administer a lot of projects, while all the components of one application are functioning as a whole.
On the other hand, traditional applications require an endless cycle of testing, which is considered to be unacceptable in the world of fast-developing digital banking.
So when analyzing these criteria in a banking software buying process we could say that it’s easier to work with the architecture of microservices, because companies don’t need to start all over again when they want to add a new component or a service. In other words, banks can integrate new services or applications in a cheap and efficient way.
Banking Software Support
Due to the growing need of clients for digital services – especially during the Corona time – banks had to significantly improve their business, in order to provide efficient services via the Internet. Some of them had the ability to be flexible and tailor their services to people’s needs, making services more personalized but many banks actually did not prepare for such a scenario (as well as other businesses).
That is why paying special attention to your future software support level (SLAs) is one of the crucial parts of your successful IT investment as an average software with great support will outclass great software with non-effective support at any time.
Viewed from the angle of TCO (Total Cost Ownership), it turns out that the price of the software itself, even though it is an important parameter, it is not the one that should make or break a decision as the price of average banking software has very little impact on the overall result of the IT investment.
For example, if you buy software which licenses cost 1.000 euros, and you need to spend about 100 hours on technical support to adjust and adapt the software to your needs where an hour of support is about 50 euros it means that your software did not actually cost you 1.000 euros, but it cost you 1.000 + 5.000 = 6.000 euros.
And this is a correct TCO to measure.
Although this is just an example and all the figures are made up, it is not difficult to calculate that, in most cases, the price of the software could be significantly less than the total cost of owning and using the banking software. Costs increase drastically when you consider the number of people engaged in training, maintenance, support, administration, and similar tasks.
The technology used in software products can also have a significant impact. The cost in this case directly depends on the capabilities of the technology. Possibility of online updates, ease of installation of new versions, changes in legal regulations, changes in the program itself. These are all parameters that affect the overall calculation of software costs.
Price is just one of the parameters when deciding. Implementation costs, IT sector engagement, maintenance, and support are parameters you must consider when choosing your business software.
Software localization involves adapting software to the law, culture, and language of the end-user demographics. If you have ever tried to configure a particular electronic device in another language, then you know that localized software is very important. If it is not, it will be unusable for your business.
However, it does not only mean translation but also changes in design and UX, so that the software has a positive impact on user experiences.
For all companies that want to distribute their software globally, it is necessary to localize it, so that it is in line with the policy and law of a specific country. In other words, without software localization, your product may not have the same impact on international users as those in your country. Then your global sales would be damaged, as well as the reputation of your brand.
Software localization allows you to avoid some of the mentioned traps and ensure that your products are well marketed to audiences in other countries.
Due to the development of technology, many banks are focused on providing better services and investing efficiently in technology. Banks have been improving old systems for decades, making it impossible for them to complete the digitization process. However, now there are new possibilities on the table. They have reached a turning point in which they are considering accessing digital transformation and getting the maximum return on their IT investments.
According to a report by the British Financial Conduct Agency (FCA), as many as 50% of banks do not upgrade old IT systems when they should, while 43% of US banks still use COBOL, a 1959 programming language, and additional layers built into it cause downtime.
This means that banks should continuously integrate the latest technology, in order for their future business to be sustainable.
We hope those general suggestions helped you summarize in which directions you should go when choosing your new banking software but this is not the end.
Being in a position to choose a software solution for your bank many times puts you in the position to evaluate multiple different options from multiple different vendors.
And this can be frustrating so bear in mind that no matter if you are in the process of selecting a new core banking solution or you are considering implementing a redesigned banking mobile app, you should always map your bank’s strategy (digital bank strategy as well) with your future IT purchase as this is the only way to ensure that your investment in new software solution would be the one that creates an ROI.