Banks and financial institutions constantly face the dual challenges of modernisation and adaptation. The industry is facing a seismic shift, and organisations need to assess whether their existing core infrastructure is up to the task.
Banks require a platform that provides autonomy and flexibility so they can launch innovative products quickly, meet new regulatory requirements and, at the same time, reduce their operating costs. They want to rely on something other than old legacy systems, provided by third-party vendors or developed in-house, that take time to maintain and evolve.
To stay ahead of the curve, they must adopt a modular and flexible architecture that enables rapid deployment of new features while retaining control of their destiny. Composable banking offers a transformative solution. Banks can de-risk their existing systems and unlock many benefits by leveraging the power of cloud-native technology and embracing a composable core banking model.
Composable core banking: Innovation and agility
Composable banking is a technology-enabled approach that allows banks and FIs to deliver financial products and services effectively. By embracing flexible architecture, banks can swiftly innovate and maintain control over their product roadmap.
The MACH principles of composable banking emphasise the importance of Microservices, API First, Cloud Native, and Headless design. These principles enable seamless integration, flexibility, and scalability, allowing organisations to efficiently onboard new partners, design and deploy new products, and enhance customer experiences.
Equally important is a composable banking system’s role in modernising existing systems. Organisations can transition accounts and functions to their new platform section-by-section instead of throwing everything away and starting from scratch – a costly and risky endeavour – at their own pace.
Pismo provides a 100% cloud-native SaaS processing platform for banking and cards. Unlike many systems available on the market today, transposed into the cloud from older on-premises versions, Pismo was born on the cloud.
Embrace cloud nativity and unleash potential
One of the key components of composability is a foundation built on the cloud. Cloud-native applications unlock a range of benefits for financial institutions:
- Openness and integration: Open and easy-to-integrate modules are the backbone of composability. By embracing cloud-native technology, banks can develop and expose open, public APIs, allowing smooth integration with external systems and services. This flexibility enables banks to seamlessly connect risk assessment applications with AML or KYC modules, streamlining their operations and reducing complexities.
- Easy configuration and testing: Cloud-native applications offer developers access to open APIs and existing developer forums, simplifying configuration and testing processes. Developers can easily trial and test each component and experience fast turnaround times for error reporting and support. This streamlined development cycle enhances efficiency and reduces time-to-market for new features and services.
- Enhanced collaboration: With cloud-native technology, banks can tap into a vast ecosystem of specialised vendors, including fintech companies, to leverage their expertise and enhance their offerings. Whether cross-border payments, AML compliance, or KYC services, banks can choose the best solutions and seamlessly integrate them into their systems.
What makes a technology company truly cloud-native? Read here to find out
De-risking existing systems with new technology
One of the primary advantages of adopting a composable core banking model is the ability to de-risk existing systems. Traditionally, banks have relied on monolithic and legacy core banking solutions, which often present challenges in terms of integration and scalability.
Composable banking offers an alternative approach, where each module is independent, secure, and dedicated to a specific business process. For example, a payments engine handles the entire payment process, while an authentication module focuses solely on authentication. By decomposing the core banking system into independent modules, banks can isolate risks, enhance security, and improve operational efficiency.
Composable banking also enables banks to avoid the risks of big bang transformations that often result in outdated products upon completion. Banks can incrementally transform their systems with a plug-and-play approach, delivering results in months rather than years. This agile transformation approach allows banks to respond quickly to market demands, adapt to regulatory changes, and stay ahead of competitors.
Composable banking also enables banks to avoid the risks of big bang transformations that often result in outdated products upon completion. Banks can incrementally transform their systems with a plug-and-play approach, delivering results in months rather than years. This agile transformation approach allows banks to respond quickly to market demands, adapt to regulatory changes, and stay ahead of competitors.
Want an example? BTG built an award-winning digital bank with Pismo in just eight months.
Break free from the cycle of “build vs buy” and unlock the true next-generation potential of your business. Become the protagonist of your future success, composing and launching products at breakneck time-to-market speeds with a state-of-the-art platform.
Discover more about the Pismo core banking platform and its unparalleled composability in our product briefing. Download it today!
