Build a bank in 100 days

COVID-19 has accelerated a trend that had already started in many areas of APAC – branch closures. At the same time, however, we are seeing a growing number of new names in retail banking in the form of digital challenger banks. Whether called “ virtual banks ” or “ neobanks ”, these disruptive banks are digitally driven and differentiate themselves by their desire to improve the customer experience.

Despite the challenges of the pandemic, it is increasingly important that new entrants enter the market as quickly as possible given the growing competition in the digital banking space. A faster launch means more time to market themselves, and new banks can start “road testing” the viability of their offerings much sooner. “ Friend and Family Launches ” or “ Soft Launches, ” where the product is only available to a small group by invitation or recommendation, are proven methods to start generating feedback that can be applied, and the software refined and updated. The earlier these gradual launches can take place, the more relevant the product will be when it becomes available to the public.

Delays in bringing a bank to market cost time and money, which is a problem for new banks with limited funding. The longer an implementation takes, the higher the costs and the greater the risk that another new bank will emerge with a similar proposition, risking losing market share.

The 100 day plan

For new digital banks, Finastra’s Fusion Essence Cloud core banking solution enables a 100-day start-to-finish implementation, which can result in fast and secure delivery, maximizing time and value. This process includes four key steps:

1. Conduct a workshop with the bank to understand its needs, then clearly define the minimum viable product (MVP).
2. Agree that the defined scope can fit into the 100-day cycle, using out-of-the-box capabilities where possible to minimize the number of time-consuming applications and integrations. Having very clearly defined goals is absolutely essential to the success of the 100 Day Cycle. With those goals set and milestones set, it’s time to start development and testing.
3. Development is carried out using an agile methodology, along a series of sprint cycles lasting two to three weeks each. Every few weeks, validations are returned to the bank to demonstrate the new capacities and the milestones reached. Fusion Essence’s cloud environment supports these features, deploying the new business functions in a pre-user acceptance testing (UAT) environment for banking testing.
4. Once the tests are complete, the functions are migrated to a cloud UAT environment and the bank is put into service.

Why success is built in the cloud

Successful banks, both digital and legacy, are building their new solutions in the cloud. By hosting solutions in the cloud rather than on-premises, the implementation process can be speeded up by enabling an agile development methodology, as well as dramatically reducing time-consuming issues, with Finastra managing the development environment.

Implementation in the cloud also mitigates the external risks of on-premises implementations, such as bugs, misconfigurations, flaws, and errors, which can take a long time to detect, analyze, and correct. In addition, the implementation in the cloud means that the project can be scaled up or down quickly, easily and inexpensively, depending on the needs of the project.

A cloud environment allows Finastra to have full control and a holistic view of the environment, which means we can track any issues and know that there has been no interference that could cause the stop development. By completely removing these potential challenges, which is not possible with an on-site implementation, the lead time is dramatically reduced.

In a way, commissioning a bank is just the start, as new 100-day cycles can be put in place to add new solutions. As a bank grows, the cloud environment allows it to quickly add new products and services to meet customer needs and take advantage of opportunities, as well as grow quickly and effortlessly. to accommodate the number of users, while ensuring that the required security measures are in place.

In today’s banking environment where time to market is of the essence, it is clear that the next generation of banks will be built on basic cloud-based banking solutions. A timely example of this is Tonik, the first licensed neobank in Southeast Asia, which launched to the public in March 2021. Based on Finastra’s Fusion Essence Cloud core banking solution, the bank was able to get started with success despite the challenges of the pandemic. and is now ready to expand its offerings and capabilities as it grows, thanks to the flexibility and agility of its software and the cloud. This is the model that we will see across the region in the months and years to come.

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