September 26, 2016 | Written by: Sanjeev Sharma
Share this post:
Banking today is nothing like what it was a few years back. The industry is undergoing rapid transformation as banks are juggling increasing regulatory requirements, while at the same time looking for new ways to provide customers with better services anytime, anywhere.
The entire conversation about technology for banks has evolved from historically long development cycles to rapid, digital reinvention. In order to remain relevant to digitally astute and socially active customers, core banking processes, must be more reliable, scalable and secure requiring banks to constantly innovate.
This is where DevOps plays a very important role. When we talk about DevOps, we are referring to creating an IT process that delivers solutions for lines of business with a faster time to value. This requires IT leaders to work in short sprints, accomplishing very specific tasks, reducing development and testing cycles for a faster turnaround that brings the benefits closer to end-users.
Taking a DevOps approach is what I will be discussing at Sibos this week in Geneva. There are several themes in the banking industry that make it ripe for adopting a DevOps approach to modernize existing IT systems, streamline operations and accelerate innovation.
New Regulatory Requirements Spur Modernization and Automation
The updated European Payment Services Directive (PSD2) that will take effect in 2018, acting as a forcing function to spur innovation and level the playing field among traditional banks and financial services technology (FinTech) companies.
In order to begin tackling the challenges and costs associated with the updated European directive, banks need to modernize applications and digitize certain areas of their organizations. Some banks have already established digital departments dedicated to optimizing legacy systems and creating a compelling online and mobile user experience for customers.
The user interface is where most of the focus is currently directed. Another important and unavoidable area is the back office. Right now, most of IT budget and employees’ time at banks is spent running back-office systems and trying to maintain them. Some systems are then being held together with paperclips and bubble gum. Without optimizing existing processes and platforms, it is a drag on creating anything new and innovative. Existing systems are not agile enough to accommodate the changes required for an open banking infrastructure.
Making legacy systems more lean and efficient allows organizations to switch their focus to reinvention and automation. DevOps can help banks determine where the bottlenecks are and address them. Prioritizing and creating a roadmap to help advance organizational change with automation tools.
In order to get started with innovation, banks must digitize and automate to free up their biggest asset – human capital. When banks take a DevOps approach, certain repeatable, mundane tasks can be automated reducing errors and allowing employing to focus on more impactful work such as creating new business models and revenue streams.
For me, DevOps is a passion. I do not look at it as conversations about automation and process improvement. Rather, I view DevOps as representing a fundamental cultural shift within any organization to advance organizational change, process improvement and automation.
There is an ongoing debate of how to change the status quo. The banking industry recognizes that existing systems and practices provide stability however they are not easy to update to meet new requirements for a modern, open banking infrastructure.
CALL TO ACTION: Stop by the booth (B40) to set up a time to meet with Sanjeev Sharma at SIBOS in Geneva and understand how DevOps can help with your bank’s digital transformation and provide a competitive advantage to your organization.