As banks increasingly focus on customer experience, they are seeking to work around legacy back-office systems that often impede digitized customer journeys. These legacy systems are core systems and thus not easily replaced—a total replacement can be likened to a human heart transplant. Rather than take this radical step, financial institutions are replacing existing services incrementally, over time, thanks to newer technologies like open APIs and microservices.
Financial institutions once viewed fintechs as a threat to their business, but banks are increasingly recognizing the value of partnering with them. Because they are smaller and nimbler, fintechs can typically innovate much faster than banks can. In a fast-moving marketplace, this dexterity can lend banks a competitive advantage. The key to success lies in identifying the right fintech partner. What to look for To lay the groundwork for selecting a fintech, banks should first evaluate their own products and services to
In today’s marketplace, technology develops at lightning speed, and the payments technology market is evolving especially fast. Financial institutions’ payment solutions need to keep up with this pace, yet many FIs cannot move nimbly to new capabilities because they are locked in with vendors through long-term contracts. A five- to seven-year contract with a slow-to-innovate vendor is not usually worth the discount that comes with it. Why the lock-in? Banks get locked into these long contracts for several reasons. First, they usually