How to Ensure Your Core Technology Is Future-Ready
Article
july 25 2024
Leverage a modernized core ecosystem to provide speed, convenience and hyper-personalization
The financial services industry is constantly changing, but it is the accelerated pace of change that is most challenging to financial institutions. Heightened consumer engagement is now at the center of everything – digital engagement, to be sure, but also using direct contact in the branch to build and intensify the customer relationship in new ways.
And the name of the game continues to be speed, ease, convenience (through omnichannel service) and – perhaps most important – hyper-personalization.
SIDEBAR
What is hyper-personalization?
Hyper-personalization refers to next-level capabilities that enable heightened engagement. These capabilities, whether online or in person, grab the attention of consumers by focusing on their unique value perspective – their preferences and improvement of their financial lives – in an interactive and conversational way. The goal is to give the consumer more control, but also to enable financial institutions to be more capable partners to enhance the financial fitness of their customers.
Consumers want a banking experience that looks like them, that aligns exactly with their needs. Financial institutions must demonstrate that they know their customers/members so well, and anticipate their needs so clearly, that the institution becomes an indispensable part of their financial lives.
As your financial institution attempts to navigate this changing environment, consider these questions:
- Is your core account processing system currently part of a broader financial services ecosystem that delivers capabilities that enable you to effectively compete?
- Can you easily integrate your choice of third-party fintech solutions with your account processing system, using open APIs to provide differentiated experiences and gain speed-to-market advantages?
- Does your account processing system enable real-time processing that supports payments, alerts and analytics?
Without the table-stakes functionality described above, your financial institution could be at a competitive disadvantage. By tapping into a modern ecosystem, one that leverages the proven foundation of your existing core platform but allows you to add new layers of capability, you will satisfy your customers/members and differentiate your institution.
The first step
So, your first task in gaining a competitive advantage is putting the right technology in place – future-ready technology that accelerates and elevates your ability to respond to change, facilitates engagement and growth, and perhaps even helps you get ahead of what’s next. Fintech partnerships can be an important part of the mix.
With the right technology – solutions that easily integrate in real time with third-party innovations through open APIs – your financial institution can provide in-demand services (in account opening, loan applications and payments, for example), to keep consumers happy and data secure.
A new way of thinking
The good news here is that you may not have to replace your current core at all. Sure, you may choose to modernize and upgrade an older system to an attractive alternative at some point, when it makes sense for your organization. But your current core functionality may be operating just fine; it can still do the heavy lifting. It’s what happens around that core foundation that will change the processing and money movement paradigm going forward. There is much that can be accomplished by reorganizing how your existing core and its ancillary programs relate – and adding new, cutting-edge solutions as needed.
Fiserv supports innovation
Fiserv is continually developing new tools that enable our financial institution clients to deploy future-ready technology within a modern ecosystem built on the foundation of their core platform. Below are examples.
Finxact
Fiserv offers Finxact, a next-generation financial services platform for the business of banking, fintech and embedded finance. It’s tailor-made for the ecosystem arrangement we’re describing. Finxact can co-exist with your current core to enable innovation and growth.
The diagram below illustrates how this ecosystem can work.
The orchestration layer is essentially the “brains” that delivers value, hyper-personalization and consistent interactions to the engagement layer/channels. It houses the “value streams” of your business, making intelligent use of data to provide better customer service, boost sales and grow relationships. This three-layer setup is all open and API-enabled, meaning that new products and fintech connections are easy to add and efficient to manage.
The technological innovations Finxact supports in the orchestration, data management and engagement layers enable financial institutions to pursue novel business objectives:
- Stand up a digital bank/brand
- Expand into a new market/segment
- Target unbanked/underbanked consumers
- Offer banking as a service (BaaS) through a corporate-client curated environment
- Create family financial management/well-being banking services
- Launch new initiatives to attract small business
Because it has open architecture, scalability and flexibility, a future-ready system like Finxact opens doors to possibilities and innovations that enhance efficiency, accelerate growth and satisfy consumers.
AppMarket
AppMarket from Fiserv helps financial institutions enhance their core processing by adding new capabilities quickly. AppMarket is a collaborative online marketplace where clients can explore fintech solutions that are pre-integrated with Fiserv account processing platforms. Continually updated with new offerings, this resource provides a less expensive and less disruptive way to innovate by building new solutions into a modern core ecosystem.
Communicator Open
Communicator Open from Fiserv simplifies integration for financial institutions using Fiserv account processing platforms. The normalized APIs of Communicator Open enable once-and-done integration, greatly simplifying third-party fintech access. The solution conforms to financial services industry standards and supports a comprehensive array of banking functions.
Data Compass
Data Compass from Fiserv is a fully scalable and secure, cloud-based data management solution. It ensures that your financial institution isn’t just collecting data, but is also equipped to understand and leverage it. Whether you choose reporting options from Fiserv or bring your own business intelligence tools, Data Compass is a flexible and scalable foundation to support your data strategy now and into the future.
Experience Digital
Experience Digital from Fiserv enables institutions to pursue the path that best meets their transformation objectives, with a range of turnkey solutions that can be configured to individual institution needs.
Experience Digital accelerates time to market with:
- Digital journeys mapped to real-world needs
- Best-in-class technology solutions trusted for security, resilience and reliability
- Complementary groups of data-rich and intelligent tools
Partnerships for the future
As financial institutions continue to face stiff competition and increased pressure to meet consumer expectations, they need to constantly scan the horizon for ever-changing consumer needs, as well as industry disruptors that threaten their success.
Fintech partnerships offering future-ready technology and services can help financial institutions build a broader financial services ecosystem on the foundation of their core processing systems. Equipped in this way, institutions will be better able to meet consumer expectations for innovative, differentiated experiences – including those of the coming generation of newly banked consumers.
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