The challenge of the finance industry right now is that financial firms need to do two things at the same time. First, they need to keep up with a complex regulatory environment. At the same time as they are trying to do that, though, they also need to create new digital products and services. Without the new service lines, they cannot stay competitive and they cannot have strong relationships with their customers. It’s no surprise, then, that BFSI -- Banking, Financial Services, Insurance -- sector is the biggest consumer of IT services. And because of the need to both remain compliant and implement new offerings, typically what BFSI companies are demanding from their IT is (1) flexibility and (2) fast time to market.
11 million customers across 4,300 branches
We worked with one of the leading companies in the Euro Zone -- a market leader in retail banking, corporate clients, and asset management. As the header says, they dealt with 11 million customers across 4,300 branches in Europe, the Middle East, and North Africa. Even at their scale, they still had challenges. They wanted a comprehensive, best-in-class digital banking solution for citizens, as opposed to corporate clients. The project was technically complex and required Java and WEB knowledge. As the project unfolded, more technologies were involved: Oracle Database with business logic in procedures (PL/SQL), Java Spring Framework, IBM WAS as Application Server, Bootstrap, and KnockoutJS. The development scope spanned from the database up to the user interface. We were able to take it on, and after successfully planning, designing, developing and initiating the production, our team was then engaged in system maintenance, upgrading new functionalities, code optimization, and incident management.
That project we just mentioned underscores what is happening in the market overall, as some of the biggest banking/finance tech trends for 2020 and beyond include digital account opening, APIs, cloud computing, and person-to-person (P2P) payments. Operational fluency, incident reporting, and modernization of technology are also crucially important to this sector.
In the Euro Zone especially, PSD2 and open banking have become major factors going forward. PSD2 essentially obliges banks to offer public interfaces in their system, i.e. open APIs. This opening of APIs means that fintechs can connect to the extensive and reliable customer databases of banks. The information transmitted can help the fintechs to provide creative solutions in the area of customer identification and credit scoring, and can also help enterprise merchants, independent sales organizations (ISOs), and payment service providers (PSPs) to process transactions at significantly lower costs.
As a result, the market size and growth rate of PSD2 and open banking is growing tremendously.
Mercury Processing Services International (MPSI) is a globally-important processor of financial transactions, and regularly provides cutting-edge solutions for the overall banking industry. They wanted to further accelerate new offerings, which meant they needed expansion of their testing team and a growth plan reliant on core DevOps principles. Furthermore, MPSI decided to introduce microservice architecture because the scalability and maintenance of the current system started being an issue.
There is a large growth in IoT usage among financial services and banking companies, and that mirrors broader trends in companies using IoT to capture efficiency and new revenue streams. Internet of Things is the backbone technology for Industry 4.0, which is where most businesses are currently heading.
It’s all about time to market. You need to keep up with regulations and innovate, as well as implement new services. Those are the main reasons why there is an increasing trend in outsourcing software development in the finance industry.
If you’re considering outsourcing some -- or all -- of your software development, it’s helpful to start with a checklist of what you need in a software partner. Download our checklist How product vendors in Western Europe choose the right nearshoring partner?: