Round pegs — square holes. New digital banking innovations — existing FI infrastructure. Just. Doesn’t. Fit. But it doesn’t have to be that way, says the new PYMNTS.com Insider Report on Agile Processing, done in collaboration with i2c. Have a few round digital banking pegs that could use Agile Processing to turn those square holes into circles?
From shopping on fingertips to banking on the go, changing consumer demands are pushing banking and retail industry to undergo a rapid digital transformation. Yet, the need for access to brick-and-mortar banks and retail store locations remains strong.
Consumers like to discover products on their digital devices but often go to physical stores to buy them. And when it comes to banking, they like the convenience of processing checks and paying bills through their mobile phones but take relief in access to brick-and-mortar locations should they ever need it.
Delivering on providing a seamless experience that transcends physical and digital platforms is a lot more complicated than it may seem. For many financial institutions, it means extending support for digital products with dynamic features on an infrastructure that was built for two-dimensional static products. They are, in turn, either forced to limit the scope of their product offerings or use clunky bolt-on solutions to accommodate the changing market needs.
For their product offerings to stay competitive, they need to be built on a platform that is not just backward-compatible but also future-enabling.
The Agile Processing model makes that a possibility. It lets FIs roll out products that are scalable, flexible and configurable yet offer bank-grade reliability and security — without replacing their existing processing technology.
The model has unique value for a range of payment use cases. Take the credit market, for example. In just North America and Europe, the credit card market is projected to grow by 7.3 percent and nearly twice that rate in developing markets, according to Celent, a research and consulting firm.
As lucrative as that growth may seem, seizing it is an entirely different ball game for financial institutions. According to a 2015 U.S. Fed Reserve study, consumers tend to pick product offerings that are well-differentiated and offer value beyond other alternatives.
To be well-differentiated, FIs need to offer products that cater to varied consumer personas. They need to be relevant to millennials, who spend an average of 14.5 hours on their smartphone and expect Alexa to recite their banking transactions, and be useful to the not-so-tech-savvy baby boomers. With much of the FIs using at least 25-year-old legacy processing technology, achieving that agility is a gargantuan task.
Agile Processing’s human-centered data architecture makes it easy for FIs to be relevant to consumers of all stripes. It lets them analyze consumer preferences, product relevance, buying history, location and a host of other key elements important for building and supporting meaningful products. Above all, it lets them do all that without losing their investment in existing technology.