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Three challenges in winning the mobile banking experience (and how OpenLegacy helps)

Posted by Jordan Elkind on April 12, 2021

For the majority of traditional retail banks, mobile banking is going to be the primary growth driver – and competitive battlefield – over the years to come.

This shift is already starting, with COVID massively accelerating the transition from bank branches towards digital banking. There was a 26% increase in mobile banking sessions in 2020 compared to 2019, with users spending 49% more time in mobile banking apps year-over-year (source). 

Banking leaders understand the stakes. In fact, according to research from CSI, nearly half of US banking executives cite mobile apps as their top priority for 2021.

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But it can be challenging for banks with monolithic core systems – particularly mainframes or the older, non-API-first applications of providers like FIS, Fiserv, MIDAS, or Temenos – to deliver the mobile app innovation that customers expect. 

Here are three of the most common stumbling blocks for banks with legacy architecture in building a world-class mobile experience, and how to overcome them. 

Challenge #1: Creating a 360-degree customer view

The best banking mobile apps are built on a comprehensive, unified view of each customer. They centralize activity from across account types (for example, checking and savings accounts, credit cards, and wealth management products) to offer clients a single place for managing their entire relationship with the bank. This unified view typically enables clients to perform cross-product transactions – e.g., to seamlessly set up recurring payments from a checking account to a credit card with the same bank.

But from the bank’s perspective, it can be challenging to unify customer data that resides in entirely different core systems. For example, checking and savings transactions may live on a mainframe application, whereas mortgage data might reside in a totally different banking application. Bridging them typically requires specialized software development, or the use of an enterprise service bus (ESB) – which itself brings complexity and maintenance difficulty.

Panamanian Bank Credicorp, for example, struggled to deliver on the promise of greater personalization of the digital banking experience because core transactions and data resided across a variety of legacy systems connected with complex middleware. 

How OpenLegacy helps

OpenLegacy integrates directly with mainframes and monolithic core banking applications, automatically generating microservice-ready APIs that can be easily used for digital development. This enables organizations to easily build digital services that draw on data points and business logic from across systems. 

For Credicorp, the shift to a microservices architecture (powered by OpenLegacy’s integrations platform) enabled rapid unification of disparate sources of account data maintained across a variety of systems. The results were impressive. In addition to powering greater personalization of the banking experience across their digital and branch channels, their 360-degree customer view enabled them to win the race for API-based approval of all Panama Canal transactions – and to become the first bank to comply with new interbank transfer laws. 

Challenge #2: Creating composable offerings

The mobile banking experience demands a streamlined, seamless user experience. But banks may have backend transactions with complex interdependencies: data flows or business logic that can’t easily be decoupled. As a result, it can be extremely difficult to modularize and reassemble the “building blocks” of a new digital banking experience.

For example, a bank may want to offer the ability to instantaneously transfer payments digitally. But it’s not uncommon to see systems architected for a different world – one in which, for example, payments are largely cleared through a teller transaction. Creating workarounds to enable new digital engagement “flows” can introduce complexity, scaling challenges, and latency in the user experience.  

How OpenLegacy helps

OpenLegacy enables the automation of high-level, composable system APIs that incorporate not just transactions but critical business logic from underlying systems. In contrast with lower-level APIs (which can be numerous and require complex data orchestration), composable system APIs are easily consumable, straightforward to maintain, and business-oriented. This is a massive accelerant for enterprises looking to compose new digital services.

Citibanamex, for example, uses OpenLegacy’s high-level, composable system APIs to nimbly compose new product offerings – including mobile features that have delighted customers, and new student financial bundles that have increased the bank’s penetration amongst coveted digital-native younger consumers. 

Challenge #3: Balancing security and agility

Research suggests that over 40% of mobile banking apps have security flaws that can be exploited by malicious actors. 

For banks, the need to maintain a robust security posture can impede rapid digital development. If APIs must be hand-coded to meet security standards or corporate guidelines, the process of creating, testing, deploying, and maintaining APIs can quickly become cumbersome and error-prone. A lack of automation in APIs created from monolithic core systems can also inhibit efforts to standardize on a DevOps and DevSecOps methodology. 

How OpenLegacy helps

OpenLegacy offers out-of-the-box support for templates and code snippets that can be reused programmatically in the creation of digital services: enabling organizations to build standard secure API templates once, then automatically apply to other digital services.

Bank Hapoalim is one such enterprise that has benefitted from an “API factory” mindset. Through their adoption of OpenLegacy, they’ve been able to rapidly roll out new digital financial products to meet consumer needs – without compromising their market-leading security posture. 

The bottom line

In order to compete in a rapidly changing landscape, traditional banks must continuously deliver innovative mobile banking experiences. This requires the agility, flexibility, and standardization of a composable enterprise – where new digital services and products can be assembled on demand. With direct integration to monolithic core systems and high-level composable APIs that facilitate a microservices strategy, OpenLegacy helps banks overcome the most daunting obstacles to building world-class mobile banking experiences. 

Topics: mobile banking