What is Structural Flexibility in Digital Banking?


August 1, 2020

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For many banks and FIs, the concept of Structural Flexibility is something new, but it is something that they desperately need in order to keep up with the evolving needs of their customers, especially in a world where digital banking is no longer a nice-to-have but fundamental to success. 

We talk about Structural Flexibility a lot. In fact, Structural Flexibility is the primary design concept that we built our Cyberbank digital banking platform around. 

The Structural Flexibility of the Cyberbank digital banking platform is based on three pillars:

1. Ecosystem creation through dynamic APIs.

In order to successfully create an ecosystem banks require an API-based digital banking platform. Where all the components expose REST-based APIs, and include state-of-the-art security capabilities like OAUTH2 provider, token management and secure encrypted communications, among others. Mid-tier banks should look for a platform that has all these capabilities embedded in it’s API technology. They should also look for a digital banking platform that offers a framework that provides extensive flexibility to define internal (closed) and external (open) API endpoints that allow the bank to share (or not) the required information with authorized partners in the ecosystem.

2. Cloud-based access to customer data.

A cloud-based digital banking platform with elastic provisioning delivers highly scalable and flexible infrastructure management. And because cloud prices levels are public, and not locked into the vendor’s business model, a cloud-based platform could also reduce costs.

This type of digital banking platform can also provide the 360-degree view of each customer that banks will need to create more personalized customer experiences. By combining all of the data currently locked inside separate business units, and leveraging that insight with artificial intelligence (AI), banks are better positioned to anticipate customers’ needs, allowing them to deliver the right offer at the right time to the right person.

Cloud access to advanced analytics can also help banks identify new markets and design new products to meet changing economic conditions. By becoming more agile, banks can accelerate speed to market and boost revenue growth.

Another advantage is that cloud-based digital banking platforms make it easier for firms to harness new technologies as they evolve, while providing greater security and scalability than traditional office-based systems.

3. An acceleration framework kickstart.

Digital banking accelerators allow reuse of components already developed and implemented to serve millions of users, helping to speed up processes, reduce costs and cut the time required to develop and implement a digital strategy.

Benefits of digital banking accelerators are:

  • Continuous and consistent experiences on all devices, allowing customer segmentation (retail, business banking, corporate banking, private banking, and payments) according to the definition of user profiles.

  • Standard APIs that allow the generation of new business models through open banking.

  • Differentiation through Innovation.

As an example, digital wallets and virtual cards implemented in recent times are becoming an effective way to interact with customers and partners, and they can be implemented in a matter of weeks.

By leveraging a platform that is designed around the concept of structural flexibility and runs on a customer-first environment, banks can:

  • Gain a competitive edge with a flexible system that drives dynamic product and service innovations.

  • Create and launch new digital banking products at market speed.

  • Improve customer service by providing multi-channel financial services with a seamless interface across multiple platforms.

  • Gain an integrated customer view across all points of contact, with a client-tailored data repository that combines customers’ information, products and transactions at a multi-dimensional level.

  • Minimize operational risk by implementing a system designed around industry compliance standards.

  • Use monitoring, control and corporate governance tools to trace and resolve transactional issues.

  • Keep systems updated on regulatory changes with intuitive rule management tools. 

  • Align the technology with business needs, making it easier to introduce new services and operations with a minimal impact on IT resources. 

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