Delivering next generation banking with industry clouds

  • Posted on June 30, 2021
  • Estimated reading time 5 minutes
Next-Gen Banking With Microsoft Cloud Financial Services

In my 25 years of working in banking, one thing has remained consistent and that is the fact that architectures and operating models are just too complex. Growing organically and reactively, developed in isolation within business silos.

All too often, I have witnessed (and sometimes been a part of) big compromises made in the interests of expediency, with little thought for standardisation or consideration of change despite the best efforts of IT architects and enlightened CTOs.

The result is IT landscapes that are large, complex, ageing, expensive, and difficult to maintain. Resulting in making change difficult, costly, and risky.

The future of banking is cloud integrated and connected
When I was a software developer back in the 90s, someone at Microsoft, whom I have great respect for, told me that the first rule of distributed computing was simply “don’t distribute!!” Now they weren’t saying distribution is bad, they were simply saying distributed computing is hard. It’s tough to get right – and easy to get wrong. Keep it simple where you can and wherever possible take advantage of technology providers to do the heavy lifting. Don’t do distribution for the sake of it. If you must keep it simple and standard, utilise platform investments and infrastructure that you can rely on and that are maintained.

Clearly, in today’s connected world, we must build distributed systems and integrate platforms, but we don’t have to build that complexity ourselves. Instead, we should be relying on the big technology companies and the online giants who have invested trillions in the development of robust, integrated platforms that come with the required security, monitoring, and management capabilities. This allows banks to focus on business innovation and not the complexities of building distributed ecosystems.

Over many years, Microsoft has been developing its strategy and associated technology to deliver a connected, integrated eco-system that together provides banks with a platform which reduces the complexities of integration and distribution while protecting security and flexibility. By integrating existing and new capabilities across Microsoft 365, Microsoft Azure, Dynamics 365, and Microsoft Power Platform, Microsoft is focused on simplifying and accelerating digital change.

At its heart, Microsoft is focused on data and, specifically, the use of a common data platform (called Dataverse) to help accelerate and simplify integrations between its products, services, and aligned third party providers. This data model has been designed to be flexible, configurable and to span the breadth of the platform eco-system reducing the complexity needed to integrate. This flexibility allows banks to deliver individual or multiple components into new business solutions that can be extended as business needs dictate, powered by a common approach.

By delivering an integrated platform that can utilize a flexible data model, Microsoft is enabling organizations to accelerate time to value, allowing them to focus on building differentiated experiences without the need to focus on the integration complexities typically associated with a diverse platform landscape and distributed systems.

This is a strategy we are now starting to see mature in the recent announcements of the Microsoft Financial Services cloud, which, despite being in its infancy, is illustrating just how flexible, powerful, and integrated a platform can be. Specifically, Microsoft will continue with partners to add and refine the tools and services around this model to deliver solutions built on standard but flexible data models. This will support the types of services customers are looking to deploy.

To demonstrate what is possible, Microsoft has showcased a few early examples such as Loan Manager, which delivers a single solution for appointment scheduling, virtual customer meetings, managing tasks, documents and approvals. This uses Teams, Power Platform, Dynamics 365, and the industry data model in the Dataverse. Over the coming months we expect to see more, with Microsoft already focusing on areas like customer onboarding, customer engagement, and risk management.

So what?
I believe Microsoft has the most complete strategy and solution for the delivery of new customer and colleague experiences. Their continued investment in this space will only accelerate the ability to drive change. So, it is imperative that banks start to look at integrated platforms to deliver agility, lower costs, and increase speed of delivery while supporting the ability to innovate.

To do this, I would recommend banks follow three steps to progress change:

  1. Build your vision: Develop the roadmap based on a vision that is easy to understand and communicate. Specifically, it is critical to articulate the benefits across both a financial and non-financial lens to enable you to address the concerns and KPIs of all stakeholders. Try, where possible, to make it real. Build concepts that illustrate the experience for customers and colleagues. Involve evangelists, designers and innovators who can bring new ideas to life while making sure to include enterprise architects and finance partners so benefits can be assessed and quantified.
  2. Innovate and drive use case driven change: Start small. Biting off more than you can chew is always tricky and often results in failure. My recommendation is to start with a specific use case and a customer journey that can be used to prove the experience, the technology, and the business case. It is imperative to deliver results quickly to maintain the momentum and fuel the enthusiasm.
  3. Exploit experience: Work with partners who have experience in delivering transformation and who understand both the technology as well as the industry you are working in. At Avanade, we have used this experience to deliver concept solutions such as our Banking Accelerator for customer engagement (delivered around Dynamics 365), remote digital appointments (using Virtual Visits platforms built on Teams), and new customer conversations (with new AI-driven platforms). All of these can be exploited to rapidly deliver and drive benefits.

Let’s talk industry cloud
We are in the early days of such platforms. However, the vision and direction are important to understand as I believe it will form the basis of next-generation banking. If you would like to discuss this further, please do get in touch as I would be delighted to have a conversation.

Learn how Avanade is helping banks focus on the things that matter.


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