The G Series: Trends in the BFS Sector
September 11, 2023
G1: Two Things the BFS Industry Should Look at – Now
By Gunjan Goel, Partner, Financial Services and Banking – Prolifics
Moving from 2022 into 2023 has been a challenging time for the US economy, let alone the banking and financial services (BFS) industry. Inflation, interest rates, consumer spending, in addition to the global events such as the Russian invasion of Ukraine, instability at China forefront – all compounded to domino impacts such as Silicon Valley Bank and Signature bank failures and regulation proposals such as 20% increase to capital requirements for large banks. Given the inflation adjusted recession is not behind us, banks, especially large banks, are cautious on their spend decisions. New programs are more critically challenged and total cost of ownership (TCO) justification is ever more significant.
While working with some of the leading banks in the sector, two notable themes have come out that even the most cautious of BFS organizations should consider:
- Leveraging generative AI toward revenue increase
- Modernizing mainframe applications toward risk mitigation
Leveraging generative AI toward revenue increase
We’re helping banks recognize that generative AI is applicable to mainstream business and it’s timely to start building solutions to leverage the vast majority of structured and unstructured data. We see applicability in fields from improving end-customer service and retention, to identifying new revenue sources; all of which could not be immediately apparent from traditional approaches.
At Prolifics, we differentiate ourselves in the generative AI technologies – utilizing platforms such as watsonX, as well as open source such as Kore.ai and Open.ai. We have built solutions and augmented them with super-imposed workflows to allow for more transparent auditing as well as combining human intelligence with generative AI.
Modernize mainframe applications toward risk mitigation
For decades, mainframe applications have been the proven, robust infrastructure that support our banking system. They are reliable, performing systems that have been the backbone of the industry’s success. However, the majority of the programing platform is in languages such as ADABAS/Natural or Cobol, which are no longer as common in the new age of low-code to no-code era. We see interest levels across the sector where banks have started to cut through this spaghetti. The common pattern that is coming through is to move over end points and connecting points as much to distributed as phase 1; followed by evaluation of reusing the logic on mainframe versus defining a new business model altogether. Depending on the nature of business evolution so far – as well as expected evolution – banks are recreating the 2nd tier from the ground up; or migrating the old logic to a distributed platform.
At Prolifics, we bring automation solutions to the banks where we can support “n-to-n” migration from mainframe applications to the distributed platform of choice. We do this with a proven methodology that allows for more than 90 percent automation; resulting in tremendous savings as well as code accuracy.
About the Author
Gunjan Goel is an innovator, change agent and leader, with expertise in process improvement, customer experience, analytics and security. He has been with Prolifics for 15 years and has more than 25 years of banking and financial services consulting experience for clients across North America, Europe, and India. Goel consistently identifies and executes transformational programs that help financial institutions stay ahead in our constantly changing business landscape. You can reach him at gunjan.goel@prolifics.com.
About Prolifics
At Prolifics, the work we do with our clients matters. Whether it’s literally keeping the lights on for thousands of families, improving access to medical care, helping prevent worldwide fraud or protecting the integrity and speed of supply chains, innovation and automation are significant parts of our culture. While our competitors are throwing more bodies at a project, we are applying automation to manage costs, reduce errors and deliver your results faster. Let’s accelerate your transformation journeys throughout the digital environment – Data & AI, Integration & Applications, Business Automation, DevXOps, Test Automation, and Cybersecurity. We treat our digital deliverables like a customized product – using agile practices to deliver immediate and ongoing increases in value. Visit prolifics.com to learn more.
References
- Wall Street Journal
- Reuters
- Financial Times
- Bloomberg