| |JANUARY 20249THREE KEY BENEFITS OF ADOPTING COMPOSABLE BANKING FOR FINANCIAL INSTITUTIONS"Enterprise architects must integrate real-time data solutions with existing systems and data sources to provide a complete picture," Niraj Naidu, APJ Head of Field Engineering, Datastax.Monzo, a digital bank, embraces composable banking to deliver a modular banking experience. Through a marketplace of integrated apps and services, Monzo users can personalize their banking journey. Whether adding travel insurance or connecting to investment platforms, Monzo's composable approach enhances the overall customer experience by offering diverse services within a single platform.Cost-Efficiency and InnovationTraditional banking systems often face challenges regarding high maintenance costs and the slow pace of innovation. Composable banking addresses these issues by fostering cost-efficiency through modular architecture and providing a foundation for continuous innovation.The modular nature of composable banking allows financial institutions to update or replace individual components without disrupting the entire system. This modularity significantly reduces the complexity and cost of maintaining and updating legacy systems. As a result, financial institutions can allocate resources more efficiently, focusing on strategic initiatives rather than managing cumbersome, interconnected systems.BBVA, a global financial institution, has embraced composable banking to drive innovation and cost-efficiency. BBVA can swiftly integrate new technologies and services by adopting a modular architecture, such as open banking APIs and digital onboarding processes. This flexibility reduces operational costs and positions BBVA as an agile player in the competitive financial landscape."Product validation is the biggest roadblock as the process absorbs most of the time in the entire product management cycle. This can mainly be attributed to non-standardized data testing processes and the time required in bringing real data into simulation," Puran Parekh, CEO & MD, iASYSComposable banking represents a paradigm shift for financial institutions, offering agility, enhanced customer experiences, and cost-efficiency. As the financial services industry continues to navigate a landscape marked by technological disruption, those institutions that embrace composable banking are better positioned to thrive in the digital era. The real-life examples of Revolut, Monzo, and BBVA illustrate the tangible benefits of adopting a composable approach, showcasing how this transformative technology is reshaping the future of banking. In this era of rapid change, composable banking is a strategic enabler, empowering financial institutions to innovate, adapt, and deliver value in an ever-evolving market.
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