The Record - Issue 20: Spring 2021

95 agile DevOps based architecture. It also requires significant investment of time and resources at a time when skills shortages are rife, particularly in the areas of software development and digital transformation. A viable alternative is to bypass the process of building a platform altogether and to connect instead to a proven, robust third-party platform for open innovation like Finastra’s FusionFabric. cloud. The benefits of using a third-party plat- form are clear: it removes the overheads of managing and running the platform and allows banks to focus on delivering a great banking experience to customers. The best third-party platforms create triple-win advantages for banks, fintechs and customers. Banksgainaccess toarangeof innovativeapps from fintechs that have been tested and pre-integrated with the core banking platforms they are already using. Fintechs have a ready-made marketplace that opens up sales channels to customers, rather than having to address a newmarket from scratch. And customers benefit as quickly as possible from new apps and functionality that banks incorporate as part of their offerings. Once a platform-based approach is adopted, it opens up even more possibilities for banks and their customers via the growing trend of banking-as-a-service (BaaS). With this model, banks expose specific back-end services via APIs to non-banks, enabling them to offer services directly to customers. These services could include streamlined account opening, auto- mated AML and know-your-customer services, and regulatory compliance. Embedded finance is another operating model that is enabling banks to find new markets and build scale. Non-bank players are using embedded finance to add functionality, such as payments, directly into their apps and ser- vices to reduce friction and improve customer experiences. As soon as banks open their eyes to the almost limitless potential of models such as platforms, BaaS and embedded finance, the only limit on the new services that they can provide is their imagination. Open APIs and open banking mean that services such as buy-now, pay-later finance for retail transactions or embedded mortgage provision through real-estate agents are now a real possibility. Adopting a cloud and platform-based approach opens up a range of exciting opportunities for banks, especially when it provides access to an ecosystem of tried and tested apps. And as the struggle to win market share and customer loy- alty continues to intensify, financial institutions will surely be adopting many, if not all, of the approaches that are now available to them. Eli Rosner is the chief product and technology officer at Finastra F I NANC I A L S E R V I C E S