| | JANUARY 20248THREE KEY BENEFITS OF ADOPTING COMPOSABLE BANKING FOR FINANCIAL INSTITUTIONSMcKinsey's research shows that revenues in the fintech industry are expected to grow almost three times faster than those of traditional banking sectors between 2023 and 2028. These trends are also coinciding with--and in many ways catalyzing--the maturation of the fintech industry.The previous decade has witnessed a monumental surge in Fintech. This phenomenon has given room to composable banking. This demand to keep pace has made banks reconsider how they design customer services. Composable banking allows the banks to be more flexible and has proven advantageous compared to being a monolith. Here are three significant benefits banks are witnessing from adopting this architecture in their systems.Agility in AdaptationThe pace at which technological changes occur demands that financial institutions remain agile to cater to the rising customer needs and industry trends. Composable banking provides the framework that permits institutions to promptly respond to fluctuating market dynamics, regulatory changes and upcoming technologies.The flexibility that composable banking enables banks to break down their monolithic infrastructure into modular components paves the way to provide tailored solutions by combining and repurposing various parts. Institutions using composable banking can seamlessly integrate necessary components without compromising the entire system."Using data analytics is a must of risk management. We need to predict which steps of ours, other departments or even external parties will have risk impact and adjust for it timely so we stay within our share-holders risk appetite, "Kirill Odintsov, Head, Home Credit Indonesia.Revolut, a fintech disruptor, exemplifies the agility afforded by composable banking. Revolut swiftly integrated a crypto module into its platform when it identified the growing demand for cryptocurrency services. This adaptability met customer expectations and positioned Revolut as an innovative player in the market.Enhanced Customer ExperienceIt is a proven fact that customer service is what makes or breaks any service-based business. Financial institutions must leverage technology to provide seamless and personalized services. Composable banking facilitates an avenue for customer-centric solutions that significantly enhance user experience across various parameters.Composable banking permits financial institutions to offer personalized services by assembling and modifying modular components. For example, a bank can easily integrate a third-party personal finance management module to give customers real-time budgeting insights. This modular approach ensures that customers receive tailored services that align with their unique financial needs and preferences.INFOCUS
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