APAC Banks Encouraged To Adopt ‘Multicore’ Banking Model for Digital Transformation in New Report

According to new research from IDC Financial Insights, Southeast Asian banks continue to view digital transformation as high-risk, and while recognizing the value of core digital banking, they are seeking a less risky approach to digital transformation to extend the life of their legacy technology and mitigate potential risks.

IDC’s new white paper, sponsored by mamboAnd Leveraging Core Digital Banking: The Next Level of Banking January 2022, features data from interviews with a number of banking executives in Southeast Asia focusing on how they see the future of core banking within their organizations, and how they plan to take advantage of the opportunities that digital banking can provide.

As the report makes clear, the main challenge facing Southeast Asian-based banks, many of which have more than 20-year-old core banking systems, is to deliver on the promise of digital transformation without exhausting their finances or risking their reputation. .

Solving this puzzle is what IDC has called a “multi-core” banking model, which enables banks to increasingly adopt basic digital banking over time, while greatly reducing financial, technical, and reputational risks.

Steve Shipley, Assistant CIO, IDC Financial Insights
Steve Shipley

Steve ShipleyAdjunct CIO at IDC Financial Insights, said: “Our research for this white paper identified many recurring themes from the interviewees, most notably how banks in Southeast Asia avoid risk, and how much they value the continued role of legacy banking technology. However, banks are embracing In the Asia Pacific region also digital transformation, using a new banking model – multi-core – which can enable efficient and risky transformation into digital banks that are ready for the future.”

Miles Bertrand, Managing Director, Asia Pacific, Mambo
Miles Bertrand

Miles BertrandAPAC, Mambu Managing Director, added: “Historically, the integration of many core banking systems has been considered very expensive and very difficult, so banks will try to ‘big bang’, or ‘rip and replace’ core banking ventures even though they were very risky and failed to do so. But in today’s market, digital core banking based on powerful orchestration frameworks, microservices and APIs – such as the Mambu platform – can now enable easier connectivity for multiple platforms, reducing the risk of replacing legacy cores and extending their long-term value. the long. “

“The multi-core model values ​​the role of legacy core banking in the future – whether it be just a few months or years, or even another decade. However, it is important to stress that, even with this multi-core approach, plans must be made to transition in The ultimate from legacy to all-digital core,” Shipley continued.

“While a number of digital core players have developed robust technology platforms to build a bank from the ground up, Mambo is able to offer a configurable banking approach that allows for the flexible assembly of independent components and systems to suit each bank’s exact needs, significantly reducing immigration risks.”

Bertrand concludes: “Banks used to be built to last, but now they need to be built for change. With open banking, new technologies and changing regulations, it is now easier for consumers to change banking providers, making the customer experience the most important factor in offerings. Any bank. Without embracing digital banking technologies, today’s banks will not be able to compete with digital banks that can deliver the highly personalized customer-centric experiences that their customers now expect.”

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