Digitalisation has been a hot topic for the past year, with growing needs in part from the Covid-19 pandemic, banks and financial institutions have had to go digital in order to keep up with the consumer demand.
Thomas Bachmann is Chief Information Security Officer at Mambu. He is responsible for evangelising information security across Mambu, both internally and customer-facing. Thomas has an extensive background in business information systems and software engineering, and has experience in enhancing incident prevention, detection and response capabilities, and scaling information security operations through automation and integrations.
Passionate about finding solutions for increased security challenges in the evolving fintech landscape, here Thomas discusses the ways in which a modern SaaS cloud banking platform can bring business agility and allow for easier integrations, all while maintaining the high-security requirements for regulated financial institutions.
Kickstarted by a wave of transformative digital innovation, the last decade has experienced the most rapid evolutionary change yet in global banking. While the move to digital banking was already well underway prior to Covid-19, the crisis has accelerated this shift, forcing more people to move to digital channels and businesses to embrace the necessity of modernisation.
However, many financial institutions continue to struggle to meet these demands and are held back by their legacy systems, which don’t allow for easy integrations. In turn, this requires much more effort, time to market and cost to implement secure integrations, compared to modern systems that can provide these capabilities “out of the box.”
Evolving customer preferences around how they interact with their financial institutions has pushed the digital channel to the forefront. This has helped better serve the industry through things like modern SaaS cloud banking platforms.
Evolving in a Secure Environment
Historically, banks were hesitant to adopt cloud technology because of a misconception that cloud (the public cloud in particular) is unsecure. While this misconception has fallen by the wayside, banks are still proceeding with caution. Even financial regulators are evolving and increasingly embracing cloud technology.
In selecting a SaaS solution, the provider offers the bank innovative and secure technology that can help alleviate the burden of securely hosting and maintaining such critical systems by the IT department of the bank. Instead, the provider, who knows the system best, can apply economies of scale for hosting, maintenance and implementation of security controls across all customers. This can be performed significantly more efficiently and therefore leave extra capacity to invest in stronger security measures, stability, as well as functionality of the solution. This allows institutions to keep pace with the evolving landscape while at the same time reducing operational risk for the bank and breaking them free from cumbersome legacy systems.
Banks operate in a highly regulated and sensitive environment and want to be reassured that the SaaS vendors and cloud infrastructure providers they work with are making security as much of a priority as they are themselves.
Innovating Securely in the Cloud
The unmatched pace of digital change is pressuring banks and financial services providers of all sizes to accelerate innovation and increase their agility. The desire to achieve greater business agility through flexibility and scalability is also a driving factor at play here. Yet as banks and financial services providers migrate to the cloud, security and compliance are priority considerations.
SaaS banking platforms that support composable API-enabled architectures allow banking and financial institutions to operate like technology companies. Working with providers like Mambu enables firms to scale their core banking business in the cloud and empowers them to innovate faster while operating in a secure and compliant environment.
The cloud enables businesses to lower their costs, bring new ideas to market at a competitive pace, and create more streamlined and personalised customer experiences. This can all be done while meeting strict security, compliance, and regulatory requirements.
Turning to SaaS for Trusted Digital Security
Cloud providers today are held to high-security standards, which means these digital environments are equally, if not more, secure than on-premise solutions and provide the opportune setting in which businesses can launch and scale at pace. In addition, the flexibility of the cloud allows technology providers to support banks and financial services firms in addressing a wider client base. This can result in driving access to transformational technologies available primarily through the cloud or by speeding up time to market for new financial products.
There are many important security issues and best practices that banks must consider when transferring regulatory compliance systems and processes to SaaS solutions. But first and foremost, it’s important for businesses to take a step back and evaluate if they are being proactive in their efforts towards meeting their customers efficiently, effectively and securely on the digital channel. And if they aren’t, they need to reprioritise in order to future-proof and address their customers’ demands for a more digital and secure approach.