Moving to Cloud the traditional way is necessary but costly. It takes time, leads to a lot of disruption along the way, increases risk during transition and actually raises costs right up to the end, when legacy infrastructure is finally decommissioned.
That’s what happens when you treat the Journey to Cloud as a normal IT migration, which in many ways it is and will remain. That’s why banks are looking for ways to derisk and accelerate the process. In our last blog post we highlighted the best option we know for achieving this goal, which is simply this: start making money from cloud native business lines fast, as close as possible to commencement of change and long, long before the conclusion.
Sounds good. So how easy is it? And what’s the next step?
We are going to use Platea, our own open digital banking platform, as an example to illustrate how the process can work. Other standard offers could be used as well, but there is something special about Platea. It was designed as a standards-based, cloud enabled solution. It is ready for use “off the shelf”, with a minimum of customisation and can start to win new business for the banks using it virtually from day one of their transition to Cloud.
The difference lies in the structure of the solution, itself, which is truly digital-native (enabling very fast and agile development, ecosystem working and accelerated time to market), but is still wholly-owned by the banks that commit to it. That matters, and is the reason why Platea offers Cloud agility.
For example, it can be established first of all within the NTT Data cloud infrastructure as managed services (if desired), enabling a bank just starting its transition to begin monetizing new services that are truly digital native, before transitioning to the Target Operating Model at the most logical, non-disruptive moment.
Alternatively, it can be hosted on a private space within a hyperscale cloud environment from the start. The point is that it doesn’t really matter which option you choose. The key requirement is to start monetizing Cloud native services and products early. Whether these services are hosted is less important than the ability to be Cloud native at once.
This not only helps offset the cost of transition, by opening up new revenue streams that were not available before, it also enables the kind of business transformation needed to maximise the benefits of Cloud. You will start to attract new people (digital natives), new customers and new partners (developing a new kind of ecosystem, which includes FinTechs, start-ups and innovators of every kind).
Because Platea is Cloud native platform, capable of very agile, variable development, it opens up new lines of business that will help to pay the cost of change, while making a faster start to a bank’s future as a real Cloud native business.
A standard but customisable open digital banking platform, such as Platea, accelerates the journey to:
- Banking as a Service, which enables key customers, such as retailers, to set up their own banking services to end user customers. Not only is this a trusted white label offer, it also uses open APIs to create flexible portals that enable a mix and match approach to building individualised services.
- Lending, covering traditional consumer loans, with standard modules ready for low cost, extremely reliable operation, and that also connects with point of sale finance, otherwise known as “buy now, pay later”. This is an increasingly important and attractive digital offering, now available securely at very high speed.
- Debit and credit card services, which permit any suitable customer-facing business to develop, brand and launch their own cards program at unprecedented speed.
All of these offers have been within the repertoire of large banks, but it has never been possible to launch these so quickly, with anything approaching the same ability to customise to particular needs, nor with equivalent security management options for rapid onboarding and go to market.
This is really what changes with adoption of a Cloud native banking platform. Speed, security, customisation, the move towards “market of one” products and services. As the Cloud revolution speeds up, we will also see new kinds of solution coming to market: such as account aggregation, providing a consolidated end to end view of customer assets, liabilities and opportunities across multiple platforms and suppliers.
This is the key point. It doesn’t so much matter where you host a Cloud native platform: what matters is the way you make use of it. Platea enables more agile development, greater speed in identifying and optimising new possibilities and, above all, fostering of a digital native mindset.
Because success in the Cloud begins in the mind, with a new approach and new attitudes to opportunity. A digital native business will be built by digital natives. In the end, it’s more about people than technology, and that is the subject of our fourth and final blog post in this series.