Challenges to Compete in the Digital Banking Landscape
Technology is evolving at a rapid pace. There is no denying that simple truth. No industry is unaffected by it. That includes the financial industry and the digital banking landscape. Many of us are now banking in ways never thought possible at the start of this century.
However, progress comes at a cost.
Financial institutions are faced with many challenges when it comes to their software. These challenges come in many forms. They include antiquated systems, data security, testing, and keeping pace as their industry modernizes.
That’s why today we’re going to continue our journey of exploring the software challenges across industries by taking a look at the problems faced by digital banking platforms.
Compliance and Testing
Many of the challenges in digital banking stem from dealing with sensitive and valuable data. As such, these organizations are held to strict compliance standards by regulatory bodies such as the Securities and Exchange Commission (SEC) and US Consumer Financial Protection Bureau (CFPB). These regulations are constantly evolving, and require banks to regularly adjust to adhere to these requirements.
That is why digital banking software needs frequent and rigorous vulnerability testing. This testing ensures that sensitive data remains secure. However, thorough testing can be difficult, time-consuming, and ultimately expensive.
That’s why banks need to partner with a development company familiar with the serious demands of both banking’s unique compliance regulations and software testing. What’s more, they need a partner capable of understanding and working with the spectrum of systems and software languages that run their business.
Data Security and Privacy
The FBI received more than 2,000 internet crime complaints per day in 2020. Which gives only a small insight into the number of cyber attacks that occur every year. This is a serious concern for organizations, especially banks, which depend on storing and utilizing sensitive data.
The massive amount of private data and information on online banking platforms are remarkably valuable. As such, banking institutions are high-value targets for cyber attacks. Keeping this data safe requires a significant effort on the part of these institutions and their software partners as the danger is ever-present.
That is why it is essential for financial institutions to partner with security-minded software developers to keep their software architecture secure from data breaches and theft without sacrificing efficiency.
Well-established organizations are heavily reliant on legacy systems and antiquated on-prem infrastructure. As such, they’re facing a constant struggle to modernize their tech stack.
This is a problem all long-standing enterprises face, such as well-established banks, in legacy systems. For many banks, these are the applications and tools that are functioning at the heart of the business. These increasingly outdated systems often fail to support new software solutions. Worse yet, they cannot be easily replaced.
These systems contain masses of business necessary data, and serve important functions throughout the business. A simple replacement would cost money, money, and potentially result in gaps in service that banks and their customers cannot afford.
It’s impossible to change the architecture of a bank’s software architecture quickly. However, there are solutions available.
Digital banking platforms can solve their legacy systems woes by partnering with experienced software developers. It is important to note, however, that due to the range of software tools that the banking industry utilizes, banks must be conscientious of who they choose. Many companies specialize in only one kind of software or discipline.
So, these platforms should look to companies that can offer comprehensive software development solutions such as integration and data migration.
Debugging Diverse Systems
Yet another challenge that stems from the sensitive nature of digital banking’s data is when it comes to debugging. The importance of data causes a lot of pressure for software developers and bankers alike. As such, debugging applications is approached with the utmost seriousness. A single breach due to a bug could result in massive losses. However, due to the many regulations that surround banking, the process of debugging can be difficult.
To complicate matters further, developers face an array of applications and digital environments each with their own needs. This includes everything from legacy systems to microservice software. As such, debugging can become an expensive and cumbersome task.
As such, the answer is more than partnering with software developers. It’s finding the right software development company that’s experienced with the needs of fintech and is able to address systems concerns across the entire tech stack.
Adopting New Technologies
As we’ve established with legacy systems, banking platforms are often slow to change. Although the post-pandemic world pushes modern cloud-based solutions across industries, adopting them as a well-established organization can be difficult. Established legacy infrastructure is responsible for several millions worth of dollars and represents millions in investment.
However, adopting this technology seems to become more important every day.
Cloud-based solutions have allowed some companies to provide better and faster service to their customers. If traditional banks with online banking platforms as part of their service are to compete, they will have to find a solution that allows them to adopt new tech without the drastic cost of shifting from old infrastructure.
These organizations should seek out help from software development companies that can provide consulting services on the subject. Experienced developers understand the landscape of cloud-based solutions and the existing infrastructure of on-prem solutions. This will allow banking leadership to make informed decisions on where, how, and when to adopt cloud-based tools.
How KNDCODE Can Help
These are by no means the limit to the financial industry’s software challenges. However, these problems must be addressed with careful consideration and software expertise. To that end, take a look at what KNDCODE’s nearshore software development can do for you. Work with a team that understands the serious needs and stringent requirements of the finance industry.
Our team has the expertise, resources, and skills in the fintech industry to provide efficient, secure, and scalable solutions for the modern online banking platform. Our team of senior engineers and security consultants can help your organization to help you protect the financial data of your customers.
KNDCODE offers comprehensive software development at a reasonable price to our clients across industries and around the world with a team of experts in every software language and discipline.
Watch for our next article where we will continue our in-depth exploration of software challenges in the finance industry and how KNDCODE can help.
KNDCODE, Always Ahead, Forward, Near.