No secret, the digital banking platform has become the dominant topic in our space, with the new emphasis on “platform.” Most, if not all, vendors have to offer a digital banking platform to compete for deals in the community banking space under $15 billion in assets. Being a point-solution provider doesn’t cut it any longer as the financial institutions want to buy a platform usually defined as consumer and business, Internet and mobile. Four (4) main pieces. There might be more thrown in, but this is the basic essence of a digital banking platform: consumer Internet and mobile banking, and business Internet and mobile banking.
And now, a platform built on a platform? Some are building digital banking on top of a development platform. Some examples — a larger bank or credit union using KONY to build a multi-channel or omnichannel digital banking platform. KONY is an advanced development tool that allows you to deploy large, enterprise-class applications across platforms. It is a generic tool. At best, there are good reference apps to start from as KONY has doubtlessly been used countless times globally to implement digital banking gives you much of what you need to build out apps. And they are not alone. A recent Gartner report highlighted a dozen different mobile development platforms, with an emphasis on mobile but capable in the traditional Internet space, which is a requirement for digital banking. KONY was one of the best. There were others. Interestingly, one of the worst was Salesforce. Salesforce, via their FORCE dev environment, now qualifies as a dev platform. This could be such a powerful idea, given their traditional CRM and customer focus, the idea of extending CRM into digital banking and having one complete view of the customer. Wait, I think I have heard that before. Maybe Salesforce should look back at how the core banking solutions have used these same messages over the years.
So, a digital banking platform built on a dev platform? Yes, it is happening. And here is why. Shortcuts. One gets lots from a dev platform. You might lose some flexibility but in general, you inherit all sorts of technology and infrastructure and code that simplifies implementation of custom code and features. And you get integration, like in the example of FORCE or Salesforce, where you become part of an ecosystem. And you get standards. You can play with all the other vendors that work on the platform. This is more of an angle for Salesforce and other providers such as Microsoft and Amazon Web Services. Interesting that AWS is considered in this space. But they do provide everything you need to perform development and much more of course. So building on a platform? An interesting option. And if you do it, surely choose a leader like a KONY or an AWS, rather than a laggard.
But also, as a software provider of a digital platform, I can say, dev platforms might be one or two architectural levels higher than a software vendor wants to be building. For Malauzai, we always look at tools and always tend towards building proprietary layers on top of lower-level generic technology environments, such as Ruby on Rails and Postgress and all sort of other stuff. In the end, if we want to provide a very flexible environment that facilitates innovation, we need the flexibility of proprietary tools. And that is a story driven by a FRONT END view of the digital banking platform. The other, obvious component is back end connections. A digital banking platform integrates with hundreds of endpoints covering dozens and dozens of different technology vendors ranging from core banking software providers to image vendors and bill pay vendors. A typical implementation for a single financial institution has somewhere between 12-15 different interfaces. This is key. A great digital banking platform really is a flexible front end that integrates lots of different services together in a great UI or customer experience. Integration is key. And dev tools like KONY or Salesforce probably have limited capabilities to help here. You simply have to build those interfaces. Yes, you can build them in the KONY dev environment, but chances are it will be custom code. Why? Because each integration point is different. Even when we integrate to the same core banking system for a different bank, it is different in one way or another. Lots of custom interfaces. Hopefully well architected so it’s easy to implement new interfaces and replicate existing interfaces.
So yes, people want a digital banking platform and yes, they are building these “beasts” on top of MDP or mobile development platforms. Enter KONY, IBM and Amazon. But for vendors who provide digital banking? Do they use tools, probably not. Too much custom code and not enough value of integrating with the ecosystem of a second-rate player such as Salesforce. So some use dev tools and some use lower level tools to build digital banking platforms. Vendors will tend to build it all, after all, they are software vendors and some bigger banks might choose a toolkit. We shall see, but platforms built on platforms could just be part of the future when considering digital banking.