The build-or-buy conundrum is a significant challenge for businesses, irrespective of the type and size of the industry. Finance business leaders face the same problem while looking to develop a FinTech stack from scratch.
Most financial businesses have embraced various financial technologies and tools in their FinTech stack to streamline their operations. A few companies might still have multiple legacy tools they leverage in their IT infrastructure to accomplish their operational goals. However, these tools might have become obsolete and cannot deliver the expected results. Such devices need to be replaced or upgraded to accomplish business goals and get a competitive advantage. While upgrading or replacing their FinTech stack, various finance CIOs find it difficult whether they want to replace or upgrade their tools. Developing a FinTech modernization strategy can help companies keep pace with the rapidly evolving financial technology industry and better serve their customers.
Following are a few ways that CIOs of financial institutions can consider when they are embarking on a journey to modernize their FinTech stack:
Determine the Current Business Needs
Businesses heavily dependent on legacy systems or processes might not have the best operational processes set to accomplish their goals. At the same time, other companies are struggling to migrate their operations to the cloud and make the most out of their digital transformation efforts. Finance institutions that cannot accomplish their business goals with technology require upgradation. If the tools implemented cannot deliver the expected goals, businesses should consider modernizing their FinTech stack to get a competitive edge.
Determining the organization’s current needs is an initial step for companies to understand the FinTech stack modernization goals.
Finance CIOs can consider evaluating their current financial technology systems, processes, and infrastructure inventory. They must Identify areas that can be improved, consolidated, or replaced.
Moreover, it is essential to understand what the target audience expects from the brand to deliver a top-notch customer experience. Understanding the target market and its needs is critical to developing a successful FinTech modernization strategy. Research your customers to understand their pain points, preferences, and behaviors.
Define the business goals
Once the business leaders understand their needs to modernize their FinTech stack can define the business goals. Business leaders need to clearly define the goals and objectives for the FinTech modernization initiative. This can help you prioritize and decide which solutions to implement. Once the goals are, defined, financial businesses can build a cross-functional team with representatives from various areas of the company, including technology, operations, marketing, and customer service. This FinTech Modernization team can help businesses develop and execute the FinTech modernization strategy. Just defining the goals will not help the teams to ensure successful implementation. Business IT leaders should develop a roadmap to keep track of the progress. Creating a roadmap that outlines the business’s steps to achieve its goals and objective can help prioritize projects and track progress.
Evaluating the FinTech stack functionality
This is an essential step in ensuring that the FinTech stack is updated and able to meet customer and business needs. Research the latest FinTech solutions and technologies that can help address your customers’ needs and improve your business processes. IT business leaders need to ensure that the new tool provides the functionality that businesses need to support the business processes and meet the customers’ needs. Moreover, evaluating how easily the tool can integrate with the existing systems and processes is crucial. This is an effective way that businesses can help minimize disruption and reduce the time and resources required for implementation. Consider whether the tool can grow and adapt as the business grows. Financial institutions must ensure that the financial technology stack remains effective over time. Security is a top concern in the financial industry, and institutions need to analyze the tool’s security features, such as encryption, authentication, and access controls, to ensure that your data and systems are protected. Cost is a crucial aspect to consider while modernizing their FinTech Stack. The total cost of ownership of the tool, including implementation, maintenance, and ongoing support, must be evaluated. Moreover, it is also crucial to analyze the return on investment (ROI) to determine whether the tool is worth the investment. Before replacing or upgrading an existing device in the FinTech stack, leaders need to evaluate the new tool’s user experience, including how intuitive it is to use and how well it meets the needs of their customers and employees.
Also Read: Trends that will Rule the FinTech Industry in 2023
One last aspect to Consider while modernizing the FinTech Stack with a new solution is a precise analysis of the level of support and training available for the tool. This can help ensure a smooth implementation and adoption process.
Once the financial institution has identified the best FinTech solutions, begin the implementation and integration process. This can include training employees, testing systems, and updating processes.
