With next-generation SaaS solutions such as Temenos Banking Cloud, banks today focus on fast innovations with fintech collaborations. The outcome? The ability to self-provision always-on banking services that scale instantly and reduce operational costs to 10% of legacy systems.

1. Why Consider the SaaS Platform for
Banking Channels?

2. Is it an exaggeration to
say most future
companies will be fintech
companies? Not really.
Companies of all makes
and maturity – including
retailers, big techs,
logistics, insurance
providers, telcos – either
are prepping to or
launching embedded
financial services that
cater to business and
consumer segments.
These firms can plan and realize a significant portion of
their revenue from financial services because of the
massive adoption of cloud computing and its subset,
SaaS platforms.

3. In the least, they will be scalable, flexible, and cost-
effective. A WSJ study speaks about how banks will
spend $12B + on public cloud infrastructure and data
services by 2021, up from $4B. These exponential
growth numbers suggest that SaaS platforms for
banking channels are the way forward.
Meeting the expectations
of digital natives,
combating competition
from anyone in the
ecosystem, and the
hunger to innovate
business models will all
mean that – banks of
2025 will operate vastly
differently.

4. For one, SaaS offers the agility to support volatile
business cycles and demand patterns. Secondly, it
realigns IT cost structure from CAPEX to OPEX
models, reduces cost, and enhances cost
predictability.
Given the privacy and security concerns, banks’
relationships (friends, enemies, or frenemies) with
cloud computing companies (Amazon, Microsoft,
Google) will keep shifting. But the undeniable
attraction banks have for SaaS is built on a few solid
considerations.
The third advantage of SaaS deployments is the
flexible functionalities via API catalogs and web-
based interfaces. Finally, comes tomorrow’s edge –
prepare banks to exploit the power of AI, ML
technologies, and Predictive analytics.

5. In addition to the above reason, SaaS’s promise
for banking channels has jumped notches in the
last few years. Here’s why.
Remote working:
Cloud-based SaaS
tools revolutionize
the ability for
scattered teams to
collaborate,
something that
becomes important
when banks
announce extended
work-from-home
routines.

6. Leveraging data management:
Banks leverage speed and computing power by taking
advantage of SaaS applications’ ‘greenfield’ approach. Be
it Goldman Sachs (making its entry into the consumer-
lending market with ‘Marcus’) or JP Morgan (Finn), or
even ING (Yolt), banks are utilizing the wealth of
available customer data to innovate in ringfenced ways.
Innovation sandboxes:
With next-generation SaaS solutions such as Temenos
Banking Cloud, banks today focus on fast innovations
with fintech collaborations. The outcome? The ability to
self-provision always-on banking services that scale
instantly and reduce operational costs to 10% of legacy
systems.
While banking segments of all stripes – universal banks,
retail banks, corporate banks, challengers, private banks,
credit unions, or fund administrators – benefit SaaS
platforms, the overriding concern – Security – is not new.
IBM reports that an average data breach in the financial
sector works out to $5.9M.

7. How do banks counter security concerns for
SaaS deployments?
In many ways, Banks
can mitigate
security breaches
from regulating
access permissions
through a unified
framework for user
authentication to
enforcing perimeter
network control via
pre-defined
firewalls, intrusion
detection, and
prevention systems.

8. Moreover, virtual machine management
includes standardizing VM images, third-party
applications, and security patches that boost
security protection across IT infrastructure.
Then comes the data encryption practices,
wherein SaaS deployment partners give banks
the options to manage their encryption keys.
Finally, the governance and incident
management layer scrutinizes SaaS
applications for specific breaches and intrusion
incidents. These are captured, reported, and
monitored till closure.

9. Core banking systems often do not run in
real-time. That reality should change.
Especially
when Temenos, with
its features of ‘Build a
Bank in a day,’ offers
sandboxes for banking
customers
to experience the
ease of consuming,
composing,
configuring, and
extending capabilities,
services, and
enterprise solutions
any way they see fit.

10. In the final analysis,
As Banks look to upgrade their IT infrastructure fast, SaaS
platforms become crucial. Ensuring their clients don’t
ever worry about upgrades or on-prem hardware
updates, SaaS providers unburden banks with hassle-free
services.
The tipping point is near. More banks are electing SaaS
deployments since they acknowledge their commercial
viability relies on upgrading their core. This acceptance is
a step in the right direction as the next five years promise
a sea change across the entire consumer finance
ecosystem. After all, technology costs are constantly
crashing and replacing core, or building new banking
platforms gets more attainable.
Banks most alive to the challenge – ‘every company will
be a fintech company’ – will gain the most in this
landscape.

11. Contact Us
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the-saas-platform-for-banking-channels/
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