For Tier 2, Tier 3 and Mutual banking, the time to digitally transform is now – and the good news is the pathway is clearer than ever.

The T2, T3 and Customer-owned (Mutual) banking industries have been facing several key, and common challenges for quite a while now including being restricted by legacy (or less-adaptable and agile) systems and processes, as well as lower operating budgets compared to T1s.

The rise of digital native Neo-banks is also applying significant market pressure to all tiers, and this is amplifying the ‘risk of inaction’ in the more traditional banking models.

T2 and T3 Banks are burdened by legacy systems with generally poor data access and high overheads, while Neobanks have the advantage of a clean technology slate and lower operating costs. The T1’s bring large IT teams and just as large budgets (and purposeful digital strategies).

To keep up with the digital revolution and maintain customers, T2 and T3 banks need to adopt a digital transformation strategy and embrace technology while overcoming cultural challenges, outdated mindsets and architectures.

The future of the T2 and T3 banking industry will depend on how quickly and effectively they can adapt to digital transformation to bring flexibility to their business and customers.

"Banking and lending used to be built to last.

Today, they need to be built to change, they need to be composable.

Change is not an opt-in or opt-out, it's persistent."

Data is THE most important part of a digital banking transformation strategy for several reasons.

Improved data access solutions, available to a significant majority of the T2 and T3 banks, are the key to exposing ALL of the valuable data sitting in those legacy systems (and other bank sources) in use today.

These solutions are in use in the T1’s and their immediate competitors and are scalable. Being able to act on current data (within months of starting), not from last night’s processing, unlocks customer and reporting upsides that drive immediate ROI.

Exposing the data de-risks that eventual banking core change by starting a ‘transition’ path of digital product capabilities, be they new revenue streams/products or replacing existing legacy-based products (de-coring your legacy platform). 

Supporting improved data access solutions is the enterprise level data governance capabilities that modern Master Data Management (MDM) tools bring for a scalable price. They are bank ready. Exposing data is one thing, getting the required governance across that data once exposed is critical.

"Solve integration and data first to reduce risk and lower costs."

Using modern MDM solutions and exposed banking platform data, banks can implement a ‘single source of truth’ for all sources of bank data. This will drive operational efficiencies, an improved and personalised customer experience and reduce effort and cost in meeting current and future compliance requirements. Data governance gives you data quality, which in turn gives you data trust, which drives efficiencies.

With the availability of modern MDM solutions, you can cleanse, standardise and format your data whilst applying the data governance services across your data that a bank requires.

Data quality is an issue all banks face, overtime, merges, product retirements, customers leaving, and platform upgrades dilute data quality. 

Improved data quality results in the ability to make informed decisions, through data analytics and insights, reducing organisational risk, improving the bottom line and the customer experience. 

In short, getting your legacy banking platform data exposed, accessible, structured and governed, are the first steps to a digital banking transformation strategy. De-risk the introduction of digital products, add new or replace existing products, create ROI on the path to your banking platform transition.

Introduce new digital products in weeks not months, reduce time to market and improve your ROI roadmap.

Introducing new digital banking products is possible with a transformation strategy that focuses on both accessing and leveraging the bank’s high-value data.

By using modern technologies to expose your banking platform data, you can create an integration and data layer that enables the coexistence of digital products and your legacy banking platform.

Ultimately transformation needs to be driven by the bank’s strategy, and accountable to its short-term to medium roadmap priorities. 

This acceleration approach is suited when ROI expectations are based on:

  • Driving bottom line with new products to market
  • A de-core of current products
  • Improving customer experience
  • Enabling for a future banking platform transition

At 4impact, we understand the need for region-ready and proven digital solutions.

We seek out best-in-class finance technology solutions and help orchestrate them into business outcomes that rapidly deliver value to our banking and lending clients, and to their customers.

We call this approach 4i Expert Banking™, find out more or contact us.

Steve Bolland 4impact

Steve Bolland - Head of Banking




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