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Three Imperatives for Banks and Financial Services Companies

Cognizant BANK ATM CREDIT CARD Diaital Engineering: 1234go00 s7 o00e Top Three Imperatives for Banks and Financial Services Companies The pivot to digital is driving banks and financial services companies to embrace a lean start-up mindset. The leaders are forming Agile product teams and adopting modern work patterns and digital technologies to recast the way they conceive, build and deploy their software products and portfolios. We call this digital engineering. In our work with banks and financial services organizations around the world, we analyzed the top three challenges for digital engineering and aligned them with successful strategies to achieve these goals. IMPERATIVE 1: Retain and attract customers by rapidly introducing innovative features, services and experiences. Incumbent financial institutions (Fls) face a growing threat from fintech start-ups with fresh ideas and the luxury of starting software development from scratch. Established Fls must compete with new market entrants offering: · Automated lending · Zero-commission trading New products need to appeal to millennials and Gen Z users, who have a mobile-first mindset. BANK Robo-advising Artificial intelligence (Al)- informed personal loans Payment processing for Internet businesses and more. PAY STRATEGY: Greenfield product engineering GOAL: Become a digital leader with cloud-native development To quickly introduce advanced digital services, banking and financial services organization need a new technology stack and way of working. Building new applications without the constraints of a legacy system – greenfield development - enables fresh thinking and accelerates innovation. A greenfield approach to product development provides the benefits of a modern, cloud-native application architecture and platform with microservices, containerization, cloud enablement and API-driven development. Through training, organizations can adopt modern software engineering practices, such as: • Minimum viable product (MVP) increments • Agile pods • Lean start-up • Hypothesis-driven and • DevOps test-driven development Extreme programming IMPERATIVE 2: Reduce or eliminate legacy technical debt. Most legacy financial services applications include problematic code, often the result of poor engineering practices or repeated patching to add new features. Technical debt: Erodes performance Escalates cybersecurity risk Impedes scalability Increases maintenance overhead GOAL: Reduce legacy technical debt STRATEGY: Application modernization To shift the technology budget from "running the business" to "changing the business," organizations need to reduce their legacy technical debt. Cloud-native applications are built from self-contained components (microservices or containers) – often one per feature – that communicate via APIS. As needs evolve, developers can add components and APIS without changing what's already there. Application transformation or application modernization, typically involves incrementally refactoring and reengineering monolithic code to a cloud-native form. To realize these benefits quickly and at scale, Fls need to Took beyond technology modernization, and adopt: Product aligned Agile teams with full-stack engineers. Modern processes such as scaled Agile, Lean Agile and DevOps. IMPERATIVE 3: Reduce data center costs. ... Boards that have traditionally been skeptical of public and hybrid cloud security and benefits are now asking CIOs why migration is not already further underway. GOAL: Reduce data center costs STRATEGY: Lift & shift legacy applications to the cloud Leaders in the banking and financial services industry are looking to their data centers to realize significant cost reductions. When applications are moved from standalone servers to an on-premises or public cloud, their capabilities are not diminished. When executed correctly, lifting and shifting produces immediate ROI by eliminating the cost of overprovisioning to accommodate peak loads. We often recommend a hybrid cloud strategy – that is, hosting applications in both private and public clouds. Looking ahead The rapid pace of innovation in the banking To maintain and increase market share, organizations will need the ability to very quickly add new services, features and experiences. and financial services sector won't slow down any time soon. This requires a combination of people, modern processes and technology. In the digital era, the advantage goes to organizations whose application portfolio is predominantly cloud-native. Moving legacy applications to A two-pronged approach is the best way for banks and financial services companies to make this a cloud-native architecture. 2 The technology platform, people and processes for cloud-native development of new greenfield applications that impart a competitive edge. journey. To learn more, read our white paper "Digital Engineering: Top Three Imperatives for Banks and Financial Services Companies" at Visit the Banking & Financial Services section of our website at Contact us at © Copyright 2019, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners. Codex 4318

Three Imperatives for Banks and Financial Services Companies

shared by cognizant on Jan 22
Threats to market share posed by fintech innovations are pressuring banks and financial services firms to morph into technology companies. Based on our work with industry incumbents, we present the to...






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