Thursday, 14 March 2019

Digital is the banking buzzword that’s become a cliche over the past decade. Consultants continue to create lengthy white papers about the importance of digital channels to a bank’s bottom line and how prepared different institutions are for this transition. Bankers continue to talk about the digital transformation of their organizations.

It’s encouraging to see the banking industry making digital innovation a priority, but when we focus on delivering products through exciting new digital channels we forget that the products themselves are often the same and operate on the same legacy bank cores that they always have. Throughout the industry, we see internet and mobile being used to deliver access to traditional products and services.

To create truly groundbreaking customer experiences, offer new services to new categories of clients and expand their footprint, banks have to innovate their back end as well as their front end. They need to create digital banking cores, not just digital product delivery channels.

To create truly groundbreaking customer experiences, offer new services to new categories of clients and expand their footprint, banks have to innovate their back end as well as their front end. They need to create digital banking cores, not just digital product delivery channels.

When talking about Banking-as-a-Service, a digital banking core becomes even more important. Banking-as-a-Service gives third parties access to banking functionality (not just existing bank customer data) so that they can offer banking services to their customers, whether or not these customers are existing bank customers. A digital banking core is vital to this mission for several reasons:

 

  1. A digital core enables third parties to READ and WRITE data to the bank’s core. This enables third parties to access existing bank customer data and onboard new banking customers, thereby expanding the bank’s footprint.

 

  1. A digital core also allows multiple third parties to read and write data to the same customer record. This allows the bank to work with an ever-growing number of third parties, who can offer different types of services to overlapping customer groups.

 

  1. Finally, a digital core enables customer records to be updated and accessed in real time. This creates operational efficiency for third parties reading/writing to customer records and increases transparency for customers.

 

For large financial institutions, innovating legacy cores is a herculean task. A few forward-looking banks in the US and EU have created digital banking cores, but the dominant recipe is still a legacy core with digital product delivery.

At BBVA Open Platform, our innovative services are built on top of BBVA Compass’ real-time digital banking core. This enables our clients to build revolutionary new customer experiences using leading banking technology.

Have questions about what you can build with access to a real-time digital banking core and the expertise of a global banking institution? Get in touch!

 

–The Open Platform Team

Get News Updates

Subscribe to our newsletter to receive the latest news and updates from BBVA Open Platform.