Most banks' digital transformation journeys are well underway, and the need to now deliver on their strategy milestones means that time is of the essence.
A recent survey by The Economist Intelligence Unit (EIU) and Temenos found that just under two thirds of banks see new technologies as the greatest driver of change for the next four years, up from 42% from three years ago.
While the momentum toward digitalisation of financial services has grown significantly during the past 18 months, financial institutions are increasingly recognising the value of Software-as-a-Service (SaaS) solutions in delivering new products and meeting customer expectations.
Central banks are also increasingly showing their appetite for and recognition of the fundamental role of cloud-driven SaaS solutions in financial services. In mid-2020 the Bank of England announced its search for a technology partner to help build out its public cloud platform, while the Bundesbank recently began encouraging German banks to focus and adopt SaaS solutions enabled by cloud computing.
Banks have refined their SaaS strategy beyond non-core offerings such as payroll or HR-related tools into more comprehensive, cloud-centric strategies. Covid-19 has served to accelerate adoption in core banking technology.
SaaS is attractive to financial institutions looking for fast, agile solutions, because they are able to consume the required service instead of having to buy, install and maintain a suite of software independently.
Rather than building in-house, financial organisations are looking specifically for resources that will speed up their attempts to innovate and scale at pace, and engender independence where suitable, all the while bolstering compliance regimes from the heart of operations throughout its entire API network.
In order to have confidence that the correct SaaS provider is being selected, it is vital for banks to drill down and assess the factors which make SaaS attractive from a business perspective in the long and short term. Banks must consider whether its core offering will enable business continuity, optimise business outcomes and help the bank reach its regulatory obligations. Above all else, SaaS providers must provide certainty that their solution will not hinder or threaten business functionality in any way.
This Finextra impact study, in association with Temenos, will outline four fundamental factors for banks when considering a SaaS solution, in order to position a financial institution’s business offering for success.
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