Michael Haney Describes itself as a “reformed banker”. As responsible for product strategy at Composable Banking Architecture Provider Galileo Financial TechnologiesIt has a unique perspective on the modernization of payments and paints a living image of the expectations of modern consumers that some banking leaders ignore at their own risk.
“We live more and more in this world where we expect things to happen instantly, right?” We press a button and there is a film on my television screen, where my goods are delivered within an hour, “said Haney, detailing this wait for Netflix in immediacy which represents a fundamental challenge for traditional banking architecture – which cannot be resolved by technology alone, but must offer a measurable commercial value to survive.
Financial institutions recognize that the technological strategy and the commercial strategy can no longer be separated. In a recent round table with Pymnts, Haney discussed the question with Dan Williamsvice-president director of banks integrated into Key.
“When you realize how popular technology is in the choice of consumers and how they make payments, how they select things, you realize that the technological strategy and your commercial strategy are extremely linked,” said Williams during a large discussion on banking modernization. Haney echoes this point of view, stressing that banks are faced with the expectations of evolving customers. Adding to his comments on the world “right now”, Haney noted that native generations have not grown up with physical money, checks or waiting days for payments to be treated. They expect financial transactions to occur with the same immediacy as their entertainment services.
This integration of technology and commercial strategy obliges banks to think differently about their infrastructure. “When I think of the ease with which it is easy to do with Keybank, fundamentally, I am talking about our payment services and our applications where our customers want to consume them,” said Williams. “And are they fundamentally interoperable with these points of consumption when they want to do it.”
External pressures of driving transformation
The acceleration of technological changes has created significant external pressure on financial institutions. Williams underlined the evolution of the distribution of financial services as a key engine. “Often, when we think of our delivery of payment products, deposit products, you continue to see them intertwined with the technology that our customers use,” he said.
Haney has identified three expectations of critical customers reviving banking services: real -time processing, ideas based on mixed data and financial services. “We came out of this world where financial services exist in these silos,” he said. “They want to mix the best of all this.” He noted that features such as access to early wages and the purchase now, subsequent capacities are now expected by commercial customers as well as by consumers.
The two leaders have stressed that consumers and companies expect financial services to be integrated into their workflows and daily applications rather than requiring separate interactions with banking channels. For inherited institutions that meet these challenges, certain architectural changes have become essential. Haney has described three key components: modern middleware (including API management and event streaming architecture), cloud infrastructure and data focused on data – critical construction blocks to offer real -time experiences focused on customer.
“Many inherited architectures had no data spirit, which makes the fact that the data come in and out the data,” said Haney. “This is why we see chief data directors – in particular in major banks – as well as data governance, data standards and global data on data.”
Williams highlighted the importance of interoperability in business workflows: “In the end, everything we do in financial services is fundamentally part of a broader commercial workflow,” he said. “There is something that has happened before the payment that the company has decided to make it. There is something that happens after payment in their business to reconcile it, “he said, noting that the coupling of financial systems with workflow metadata creates cleaner processes that benefit customers.
The rise in composable modernization
The round table has also noted a significant change in traditional “RIP and replace” approaches to modernization. Haney has described several approaches, including the “Greenfield” method where banks launch new product ranges or digital sidecars to experiment before tackling the inherited infrastructure.
For banks that are not interested in Greenfield’s approaches, Haney has recommended “an iterative and progressive approach” where institutions “slowly gnaw at the inherited infrastructure”. He stressed the importance of showing the commercial value within each budgeting cycle: “The days who have long been missing when we have five-year transformation programs and you do not see the commercial value until the end,” he said.
Williams has strengthened the importance of continuous improvement: “When you think of being able to offer discreet advantages in these functions or experiences … The ultimate impact on customer experience is that you improve and adapt constantly.”
Asked about the concept of banking infrastructure to the test of the future, Williams was direct: “I think that even the term” future events “is a bit silly. For example, what is only one thing that we do now that somehow means that we don’t have to change in the future? It is a fashionable word that has made its way, but it is an unfit term, “he said. “The most important principle of the future test is to put your business in a position where you can improve and adapt over time. Everything will change; Everything will continue. It’s just whether or not I direct these questions or not. »»
Composable banking becomes table issues
The conversation ended with prospects on the question of whether the composable bank has gone from the strategic advantage to the table challenges.
“The concept of agitation, the concept of composibility, these things we have talked about are definitely table issues,” said Haney, although he asked whether the fintechs represent the real existential threats given the regulatory advantages that traditional banks maintain.
Williams added that industry often simplifies bank accounts against Fintech, at a time when fintechs redefine their identity and business model. Whatever these relationships, the two executives brought the conversation to execution.
“We have a ton of incredible relationships with fintechs,” said Williams. “They can be customers we food, they can be distribution channels, or they can have a technology with which we increase our basic services. This is not a strategic problem; This is an execution problem. Everyone reads the same cheat sheet on how the world changes. It’s just whether you can execute or not. “”