Challenges
Rory Yates highlights a more complex challenge faced by insurers when integrating third-party services into their ecosystems. He points out that “the profound challenge insurers face exploiting ecosystems more effectively is you need a lot more than an API or the ability to connect to a service.”
“It’s about the ability to exploit their new partner services and gain rapid shifts in experiences for employees and customers. It means configuring those services and orchestrating them so that they make a difference to an employee or customer experience.
“To achieve this, the insurer needs to simultaneously achieve a massive increase in the knowledge of a customer, while at the same time, enabling their ability to act on it in near real-time. The latter part of this typically requires a huge shift in both foundational technologies and operational data models and therefore the business model it is operating in.”
Zach Burks explains that integrating third-party services into Mintable’s digital ecosystem is relatively straightforward due to its advanced backend architecture, which he compares to Amazon Web Services. “Integrating third-party services isn’t much of a challenge for us because Mintable’s systems are built similarly to Amazon Web Services, operating seamlessly in the backend,” he explains. This allows for a smooth process, whether they are incorporating legacy financial systems or mobile apps. “Whether integrating with financial systems using legacy code or a mobile app, it’s as simple as making an API call.”
Ecosytems and innovation
“Our Coreless Banking initiative was designed to integrate existing banking infrastructure into the digital open banking ecosystem. We launched the initiative as part of one of our working groups, in collaboration with banks and technology providers like HSBC, Zafin, IBM and JP Morgan Chase,” says Hans.
“Coreless banking empowers banks to select the software vendors needed to obtain the best application area solution, without concerns about interoperability and being constrained to the service providers that share the same technical language. By integrating proprietary messages into one standard message model, it helps to speed up legacy banks’ path to digitisation and standardisation by adopting a ‘plug-and-play’ solution. It also enhances the speed these banks can deliver tailored, high-quality services in line with the latest technology for their customer base.”
Rory Yates also highlights how ecosystem-based models act as a catalyst for innovation by facilitating the implementation of new technologies and services on a large scale. According to Rory, innovation in banking is not merely about conceptualising ideas in a controlled lab environment but about “achieving it at scale by creating that value in an employee or a customer outcome.”
Coreless Banking
At the heart of the Coreless Banking initiative is a modular design that allows financial institutions to update or replace individual components without disrupting their entire system. This flexibility is further enhanced by an API-first approach, which facilitates seamless integration between various banking services and third-party applications. By leveraging cloud-native architecture, the framework also promotes scalability and cost-efficiency, helping banks to optimise their operations and reduce expenses.
These early adopters, which include major banks, have reported improvements in operational efficiency and customer experience, highlighting the potential impact of this innovative approach.
There are numerous benefits to the Coreless Banking initiative. Banks can enhance their agility, quickly adapting to changing market conditions and customer needs by easily updating or replacing individual components. The modular structure and API-first approach also facilitate faster integration of new technologies and services, fostering innovation within the industry. Additionally, by moving away from monolithic core systems, banks can potentially reduce maintenance costs and improve overall operational efficiency.
As the initiative continues to evolve and gain adoption, it is poised to play a crucial role in shaping the future of banking operations and technology infrastructure, paving the way for a more agile, efficient and customer-centric financial services industry.
“From automating customer experiences in digital, which allows customers choice in claims processes, to the ability to move between channels in order to gain the reassurance and understanding they need,” he adds. “All the way to new products that are usage-based, or more adaptive or risk-mitigating. Ecosystems allow these outcomes to be far easier to achieve because insurers can rapidly adopt enabling technologies, new data services, channel capabilities, or embed themselves deeper into people’s things and lives.”
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