When we talk about modernization or digital transformation in the context of virtually any business today, the conversation is often focused on the improvement of existing systems or processes through the utilization of advancements in technology. And while the ability to create a better, stronger, faster version of a business’s core offering is a notable benefit, true modernization is as much about expanding into new products and services as it is about improving on the old ones.
For financial institutions, this means viewing modernization as an opportunity to not only improve the efficiency of traditional banking processes, but to gain the capabilities needed to branch out into other financial services, and to successfully compete with the growing number of emergent, digital-forward FinTech organizations and innovative financial management platforms.
In other words, product portfolio diversification should be understood as a critical component of any financial institution’s broader modernization strategy. Even being able to offer a wider range of account types and personalized rewards programs would be a significant step in the right direction for many institutions in the sector.
However, in order to achieve this, most banks and financial institutions will first need to identify the right strategic partner, or more specifically one who can fully support them on their modernization journey based on the individual needs of their operation and infrastructure.
The ultimate truth is that digital transformation is an incredibly complex undertaking and, most importantly, is almost never arrived at through a one-size-fits-all solution. And while a few institutions may be able to handle a “big bang” style transition into the cloud, most will require a hybrid approach or a combination of on-premise systems updates and cloud-based solutions.
Put simply, European financial institutions need a trusted partner who first takes the time to diagnose their unique infrastructure and operation to determine the best path forward, rather than applying a generic solution at the outset and making adjustments along the way. And more than simply being able to identify the necessary course of action, the right provider will have the technological flexibility and know-how to actually get the job done.
But flexibility also means interoperability, which means institutions will need to evaluate their strategic partner’s banking relationships in addition to their products and expertise when making a decision. For example, if your provider already has an exclusive correspondent relationship with a bank you’ve never worked with, your modernization strategy will almost immediately become more complicated and rife with hurdles than it was in the beginning.
Overall, while financial institutions in Europe absolutely need modernization to promote growth in today’s competitive landscape, there’s no reason they shouldn’t be able to execute the transformation on their own terms, and based on their own unique requirements and creative vision. The key is taking the time to determine how a modernized infrastructure can extend your existing product portfolio in creative and lucrative ways, while also finding a partner with the technological agility and agnosticism to bring those products to life.