Banks must embrace event-driven cloud banking if they want to create products and services that are fit for this new digital world and if they want to remain relevant to their customers in the future.
A white paper from 10x, entitled ‘The Power of Data’, underscores how event-driven cloud banking is unleashing the power of data for banks.
Moreover, the report sets out how to harness the power of data and explains:
- Why slow data retrieval means missed opportunities
- How event streaming makes real-time analytics happen
- The cross-organisational challenges data can solve
- How to de-risk legacy architecture
- How banks can rethink data entirely
10x The Power of Data – key takeaways
Slow data retrieval reduces business opportunities
Banks have traditionally relied on end-of-day batch processes to extract data from the core banking system so they can run analysis on it and generate insights. Not only is that a cumbersome process that puts unnecessary strain on the system, it also means banks are likely to miss out on potential sales opportunities. With customers increasingly expecting real-time hyper-personalised banking experiences, sending offers to customers based on what they were doing the day before means the opportunity will likely have already passed.
Event streaming makes real-time data a reality
Next generation cloud-based core banking systems that use an event streaming approach enable different microservices within a bank to access data in real time by sending it to one easy-to-access integration point and in a structured format that makes it easy to read and use. Every time a customer performs an action, an event is generated and that data is made available to whatever business function needs it. This eliminates the need for end-of-day batch processes and reduces the risk of extraction errors (such as wrongly mapped data fields).
Data can solve multiple banking challenges
Unlocking the value of data can help solve challenges across a bank’s business. From operations (enabling real-time payment reconciliations) and compliance (making sure customer addresses are accurate by having one master address that other services can access), to competition (onboarding customers faster) and meeting customer demand (providing more personalized services), better use of data can help banks run more efficiently while also enhancing the overall customer experience.
The end of monolithic core banking
Monolithic mainframe architecture is not designed for 21st century banking. Making changes is cumbersome and risky – one mistake can take down the entire system – which also discourages banks from innovating or improving functionality. By adopting an event-driven microservice system architecture, banks can split their business functions up into chunks, making it possible to carry out changes without popping the hood on the core banking system – minimizing the damage if something goes wrong. That event-driven approach is an upgrade on traditional microservices technology where data extraction is hardwired into a database (making it brittle to changes). In that world, multiple microservices would likely be hardwired into a database to extract the same data. With events, data is published only once and multiple microservices can subscribe to that data without needing to reach into the database directly – significantly speeding up changes and aiding faster innovation.
Digital transformation is changing banks’ relationships with their data. In this new world, data is a product that each business function produces and shares with other business functions to consume. This is supported by the concept of the data mesh – a way for banks to share data across the business through a decentralized model where all of the business functions are responsible for ensuring their data is fit for consumption (as opposed to it being the responsibility of a central data team). The data mesh ensures data that is published conforms to a consistent structure and that it is schematized and clearly tagged so people can easily identify what the data is and how it should be used—something that is particularly useful for record keeping and compliance.
10x: on a mission to transform banking for customers, banks and society
The premise on which 10x was founded in 2016 is simple to summarise but much harder to execute: how to get banks to serve the customer better and how to use technology to deliver true transformation. The firm’s comprehensive banking platform, SuperCore, built on cloud native technology, enables connected propositions, customer journeys and support services. SuperCore is delivered as Software-as-a-Service and is globally available.