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Building a bank for the future

Banking Circle’s three-part white paper, Ready For The Rebuild? Rethinking The Value Of Digital Infrastructure, showed that the challenges banking executives cited as their most pressing concerns during the pandemic were the same as those before it struck… only now they are well on the way to resolving them “Banks are no longer playing Jenga with their internal systems – where one new block or one more change could bring the whole edifice crashing down… worries about the chokehold of legacy systems – and the mindset that accompanies them – are passing.” That upbeat appraisal of how the limitations of legacy have been largely ‘conquered’ by institutional

banks was one of the standout conclusions of the first in a new series of reports from infrastructure provider Banking Circle. It commissioned Magna Carta Communications to go to the industry just as COVID-19 was declared a pandemic, to assess how well banks’ digital investment over the past few years had stood up to its first real shock – and whether the events of 2020 had changed their digital trajectory going forward. It reported a ‘renewed sense of confidence’ among incumbents. While that may come as a surprise, Banking Circle says it reflects a fundamental change in their business practices, culture and, most of all, technology. Particularly the adoption of Cloud-enabled systems, platform services – notably those supporting a more flexible infrastructure – and a willingness to outsource. Resilience and flexibility are front of mind, it said, with many banks believing that now they, rather than challengers and disruptors, are best placed to move successfully into an economically

uncertain future. Just five per cent of retail banks it spoke to said they were concerned about the threat of recession, compared to 31 per cent of fintechs and 41 per cent of payment services providers sampled across Benelux, Denmark, France, Germany and the UK. If the report’s fanfare that ‘the banks are back in town‘ is correct, maybe it’s because they’ve heeded the advice of providers such as Elliott Limb, chief customer officer for Cloud-native banking and lending software-as-aservice provider, Mambu, who says: “Anybody who’s trying to build s omething that isn’t ecosystem-led, open, and isn’t collaborating, I think they have a short shelf life.” Limb adds: “Gone are the days where ‘collaboration’ just meant a bank demanded its customers pay a certain way and the technology vendor sold what the bank wanted. Now, we’re all working a lot closer. Composable and collaborative are absolutely fundamental to making this market work.” Issue 17 | TheFintechMagazine