As Finance embraces the ‘Digital First’ environment, traditional data systems powering finance are in dire need of remodeling. The BFSI industry is on its toes for digital acceleration. And, rightly so. Keeping up with changing times allows lenders to retain customers who are now accustomed to data-backed, intuitive digital services.
Banking application architecture forms the backbone of banking in the digital age. Consisting of cloud-based databases, internal data systems, and digital integrations with external lending partners, it enables advanced data analytics, inclusions of Artificial Intelligence (AI) and Machine Learning (ML), and transforms banking on multiple fronts.
What Constitutes Banking Application Architecture?
Banking application architecture is made up of various components and layers that work together to create a robust and scalable system.
Some of the key components of banking application architecture include the front-end user interface, the middleware that connects the front-end to the back-end systems, the databases that store the data, and the analytics and reporting tools that provide insights and business intelligence.
Banking Application architecture also includes security and compliance features to protect sensitive data and ensure regulatory compliance.
Many major banks are already investing in and implementing modern software architecture to improve their digital capabilities and stay competitive in the industry. According to Deloitte, By 2025, 80% of heritage banking services will be delivered through modern banking platforms , enabling banks to reduce the cost of delivery by 30%.
Here's what banks' goals are with banking application architecture today -
Banking Application Architecture supports banking services that are highly interconnected with Digital Banking. In modern use cases, it supports new-age banking functions such as Banking as a Service (BaaS) models using Application Programming Interfaces (APIs) for payments, credit, and investments.
In all, it supports -
Today, remodeling is important as cloud-based Banking Application Architecture helps increase the integration of banking solutions with partners, service providers, and regulatory institutions. In addition, modern banking application architecture also enables FIs to enhance customer experience, reduce operational costs, streamline business processes, and stay competitive in a rapidly changing industry.
With the use of advanced technologies such as big data analytics, artificial intelligence, machine learning, and robotic process automation, FIs can gain valuable insights from their data, automate repetitive tasks, and make data-driven decisions.
Here are three major improvements Banking Application Architecture brings to digital banking –
Molds Digital Customer Experience
Cutting Costs and Operating Expenses
Increase Security and Compliance-readiness
How Does Digital Banking Benefit from the Remodeling?
In the rapidly changing landscape of banking, data-driven automation and insights are critical for success. But how can financial institutions achieve these goals while ensuring maintaining privacy and security?
Your technology service partners should offer system integration and solution architecture services to help firstly remodel banking application architecture, including digital agility services, business process automation, and comprehensive analytical insights. These are three major areas that are driving success in digital lending.
See how these three layers help financial institutions thrive in today's digital age.
