By Santiago Sinelnicof, Red Hat Chief Solutions Architect for South America and the Caribbean.
The financial services business ecosystem has been radically transformed in recent years and is undoubtedly more dynamic and open to innovation. While open banking reforms have encouraged organizations to open their architectures to each other, there is still a lot of potential to be unlocked. Along similar lines, we can say that there is a huge untapped opportunity in building joint business models, which for some time now has been developed by new financial technology companies.
Many banks have understood the value of creating open financial communities, but there is still a long way to go for financial organizations to adopt deeper collaborative models. Implementing such models would save them time and resources and empower internal teams to focus on differentiating their business where it really matters. So how can an organization break free from legacy structures and attitudes to better integrate and interact with partners?
First, one of the keys to updating their strategies is based on adopting a growth mindset. Traditionally, banks have tended to view third parties as suppliers, treating the relationship as a transactional exchange. In this sense, the shift for banks must come through adopting a growth mindset that motivates engagement with a broader community. By interacting with an ecosystem of partners and treating them as a valuable additional set of experts, banks can accelerate problem resolution and achieve their business objectives more quickly.
Secondly, and no less important, is the open culture, which defines the way in which we want to relate to our partners, customers and communities. In this line, innovation does not imply the mere adoption of state-of-the-art technologies, but the decision to give collaborators a leading role. For this reason, the digital transformation programs that Red Hat designs for its clients in the financial sector not only include the development of new technologies, but also the need for a cultural change to mature within each company, which will increase agility, flexibility and collaborative spirit among teams. If different departments are not set up to interact with each other, it is important to work on those barriers and build bridges to ensure that everyone is included.
Not only is internal collaboration relevant, but also at the external level. In this sense, banks must also humanize business relationships. The most successful ones are based on mutual understanding of what makes others work, what motivates someone to behave as they do and what drives their performance. Getting to know people on a more personal level can create deeply rooted relationships where everyone feels fully invested in driving the project forward. The banking industry may not be known for fostering vulnerability, but revealing a little more of the human in us is a key ingredient in building trusting relationships. The pandemic has added urgency to the need for greater empathy to guide people through hardship and demonstrated how people can come together through shared emotional experiences to better manage adversity. In parallel, by leveraging open source platforms, banks may have the opportunity to provide innovative services for their customers and stay on the cutting edge, while ensuring compliance and security standards.
Finally, to achieve a sustainable relationship with customers, banks need to address the technological challenges presented by Covid19 and simplify the user experience to improve processes. Building a consistent technology platform is a solid integration strategy. Organizations already need to rethink their system architectures and move towards open platform models.
In the case of using containers to leverage cloud scale, establishing a common platform at the base of the technology stack that runs uniformly can provide more control, security and stability. A common application management layer that is independent of the underlying technology and based on open APIs gives internal teams along with partners greater freedom to collaborate, which accelerates innovation. It also helps avoid the risk of ending up with many custom integrations, which can lead to cost overruns, outages or service-related issues for customers.
In brief, progress can come much faster when people and teams work together. As more companies in banking and adjacent industries realize the inherent opportunities resulting from greater openness, we will begin to see unprecedented innovation in financial services, creating better customer experiences.