There is copious noise around how the current pandemic has accelerated and boosted the digital transformation processes across industries, especially Banking and Finance. But is it the truth? Are banks capable of transforming their bulky legacy systems into a sophisticated digital-only platform in a matter of months? Especially when these months were laden with uncertainty, fear and chaos. Banks run on highly secure systems, and it would be delusional to believe they can let go of all security challenges and obsolete leadership outlook in the short span that the pandemic took over our lives.
In a 2019 study conducted by Cornerstone Advisors, executives were asked which of three possible definitions of digital transformation resonated the most with them.

Source: Cornerstone Advisors

As per the majority (almost 80%) nothing less than – “A full integration of digital technology into all areas, fundamentally changing how to operate and deliver value, and a cultural change that continually challenges the status quo and gets comfortable with failure”, should be classified as digital transformation. By this definition, one can conclude that Digital Transformation cannot be anything but a journey since it needs to weave its way through various elements of the overall system to finally bring about the change.
Prior to the pandemic, many banks were already on the path of some level of Digital Transformation. The outbreak helped them prioritize digital products and services over the rest. This momentum towards Digital Transformation that the Banking industry has gained during the pandemic will be lost if the Senior Executives do not capitalize upon the window that COVID has created. Here are some of the strong reasons why Banks should seize the moment and embark upon their Digital journeys without losing a moment:

  1. There is a sudden wave of digital adoption among all types of customer segments including the laggards like the seniors and the Boomers who were earlier quite reluctant to shift to digital mode.
  2. To tackle the challenges COVID posed, many banks and financial institutions have re-imagined and re-invented newer ways of doing business in a short span of time.
  3. Regulatory requirements are more flexible and supportive of the Digital Transformation.
Digital Transformation cube

The path to Digital Transformation is never linear, it’s like a long winding road.

What can help is a bespoke and robust Digital Transformation framework that breaks the entire journey into smaller journeys that are closely integrated together with an inbuilt layer of security. This sets the foundation for scalability and agility in the overall approach.

Speaking of a bespoke framework that allows for scalability and agility we should spend a little time in understanding what it really means.

There are two major ways in which one can go about building and deploying applications – Building with a Monolithic Architecture which is the legacy way or going with a Microservices based Architecture, which is currently trending in the enterprise world. If you are a small organization with a simple application and don’t need numerous capability additions or changes in the near future, then you can very well stick to the Monolithic architecture that is simpler to build and deploy. But if you are an enterprise and your applications handle multiple user journeys as well as are dynamic in nature where you need to constantly evolve and add capabilities, then you must look for a scalable framework, which ideally is Microservices based. The cherry on the cake would be a bespoke Digital Transformation framework, which is Microservices Architecture based and custom built to the needs of your development environment. While a monolithic application is a single unified unit, a Microservices Architecture breaks it down into a collection of smaller independent units that are loosely coupled together. The challenge of going with a Monolithic architecture in an Enterprise is that as the application becomes complex, it’s very difficult to understand and manage. Also, every time a newer technology is introduced, the whole code has to be re-written! Whereas in the Microservices Architecture, the single unit is broken into smaller independent units. Each unit can be worked upon without impacting the entire application code therefore making the process way more scalable and agile.

Digital Transformation path image

Here is an example of how we helped Karnataka Bank achieve some great results in its digital transformation journey with the help of our proprietary framework that focuses on a layered microservices based architecture.

Karnataka Bank gleaned that they had to meet the challenge of changing market demands in a dynamic ecosystem. They realized that the Banking sector is becoming increasingly competitive. Customers are demanding for more sophisticated touch points – the digital bar keeps rising and in the current system, the applications and services exist within disparate silos. Exzatech worked with the Karnataka Bank team to formulate a custom framework that rested on three critical pillars:

  1. A shift from ‘You come to us’ approach to ‘We will come to you’
  2. Optimization of the overall ‘Turn Around Time’ (TaT) and
  3. Reduction of the scope of human led errors.

With this framework and a vision to digitally transform, Karnataka bank conceptualized a ‘Digital Transformation Initiative’ and set up a separate unit called – Digital Center of Excellence (DCOE).
Exzatech became an integral part of Karnataka Bank’s DCOE, providing the Consulting, infrastructure, integration, application development and maintenance services. A dedicated team of IT professionals are working with the Bank’s internal team to turn the vision into reality and the results are astonishing! Digital journeys like Automated Home Loan, Personal Loan, and Car Loan are now completed within minutes instead of days.

The Digital Transformation framework created by Exzatech enables innovation and delivers scalability and agility to the entire system.

Digital Transformation Framework – Building Blocks

Digital transformatin building blocks

Image – Exatech Framework for Digital Transformation

It comprises different interconnected components with bundled infrastructure and application development services. The benefits of Exzatech’s proprietary framework are:

  • Proven, adaptable, scalable framework
  • Commitment to Open Source Software – Exzatech makes use of a stable & proven Open Source software platform thus bringing down the total cost of ownership while ensuring a stable, secure, future safe infrastructure/application components.
  • Experienced and skilled team with industry experienced process consultants

Digital Transformation is a strategic journey complete with vision, milestones, roadmap and destination, and it cannot be achieved without proper planning and foresight. While COVID has nudged the banks onto the path of digital transformation, it isn’t the real change maker yet. The onus of transforming how banks work and serve their customers, lies in the hands of its leadership and they must act now and take the opportunity.

The Exzatech Digital Transformation framework is an opportunity for Banks and FIs to fast forward their transformation initiatives in a rapid, safe and scalable manner.