New age of the banking industry

Banking is notoriously known as one of the most bureaucratic, complicatedly organized and retrograde financial spheres. The first banks appeared in Italy in the late middle ages, and believe it or not, quite a few ground rules of how they function haven’t changed since back then. However, the onslaught of the new technologies is inevitable and even such change-resistant spheres as banking eventually bend under its pressure. With the emergence of blockchain, with businesses going vastly online during Covid-19 times, and with general tendency towards flexible scaling and decentralization, banks have a lot to adjust to in order to keep up with customer demands. 

Let’s take a look at what challenges the banking sphere is facing today and how new tech can make things easier for banks and their customers.

Has traditional banking become redundant?

Did you know that the average bank transfer across seas takes up to 3 days to verify and settle? For a fast-paced population, traditional forms of banking are quickly becoming redundant, especially across borders.

Not only does this inconvenience the consumer, but making money move can be a logistical nightmare for banking institutions themselves. One account-to-account transfer must bypass a system of intermediaries, verification processes and cost heavy processing before settling.

Implementing tech like blockchain could become a solution for this problem, with its instantaneous transactions and the lack of necessity for multiple verifications and heavy-handed processing.  However, blockchain has yet a long way to go before becoming universally accepted. 

Is adopting microservices a solution for banks?

Microservice architecture has been conquering multiple industries and spheres. It is modular, it is simple to handle, it is flexible as a Lego, where you can build a custom solution from small nuclear blocks that can work perfectly together and yet are independent from each other. The same module-based system makes microservice architecture very solid and stable-working. Many companies and payment providers, like the UK-based Connectum Limited, offer complete solutions, where you can hand-pick the services you want to work with and use only them. 

The assortment of microservices within a single ecosystem is usually pretty wide, from simple payment gateways to extensive analytic services. Microservices are often available through easy-to-implement APIs, providing for a smooth on-site deployment and further easy maintenance. They communicate between themselves using light-weight, understandable and wide-spread mechanisms, and apply a bare minimum of centralized management. This makes the transition from traditional ways of handling bank operations much easier and would allow banks to drop bulky, expensive, heavily customized and thus complicated to handle solutions.

aaS solutions and how they change the way services get delivered

aaS is a new way products and boxed solutions get delivered to customers. It can be Software-as-a-Service, Platform-as-a-Service, Infrastructure or even Ecosystem as a service. Instead of a product, which may need maintenance, customization, management, specifically trained people, enterprises and corporate customers can now get a whole, fine-tuned system not as a product, but as a service, delivered to them. This allows them to significantly reduce effort spent on maintaining infrastructure and instead focus on what they do best – deliver services to their own customers. To say nothing of the fact that such solutions usually employ all the latest innovations, making them much faster, stabler and generally more efficient. 

Although the banking sphere is slow to address changes, we still see how little by little, changes do infiltrate it, making banking services more accessible and affordable worldwide.