Back office systems that do everything don’t exist. Buying software on the basis that it covers all your business needs is last century’s strategy.
IT platforms operating as part of a wider ‘eco-system’ enable you to pick best in class functionality. An eco-system approach enables specialisation.
Maintaining a core banking platform is enough to keep most IT providers busy. It’s far better to buy services from those at the cutting edge of technology. Providers that build additional functionality as a side-line to their core activities are falling behind.
In an eco-system, components are linked together by Application Programming Interfaces (APIs). Typically, there’s a core platform at the centre. This provides a single view of the customer, workflow and is the statement of record.
Do API or die
Not adopting an API approach holds back development.
Take payments as an example. In most credit unions money is processed by dragging and dropping transactions from a corporate bank account. Transactions are not real time. Posting is a manual process. Finance officers race against the clock before members call to find out where their money is.
This approach is designed by IT providers. It has nothing to do with meeting members’ needs. Technology in this example is not an enabler. It holds us back.
Modern API-based platforms enable innovative payment facilities including sort codes and open banking. With so much development in this area, the ability to migrate payment platform whilst leaving a core system in place is essential.
Software suppliers not basing their offer on open APIs won’t last long. Nor will credit unions that continue to use outdated, locally installed systems.
Start with the user
Netflix, Uber, Amazon. These companies set the bar high for online experience. They are the reference points consumers use when assessing all other online offers.
Consequently IT requirements must begin with the end user.
Any new operating model has to deliver a smooth, friction-free member journey. Poor member experience means people will abandon your website quickly. This wastes marketing spend. It stifles growth.
User stories are a great way to gather requirements. We will return to these, with examples, in the new year.
Create a roadmap and test
Not all functionality has to be delivered on day 1. Minimum Viable Product (MVP) enables you to reach your members sooner. And in a way that meets their needs. It helps you understand unmet need and design functionality accordingly. It’s an early version of your product that has enough functionality to generate enough feedback from members. Such an approach saves money and improves member experience.
Old-style systems are often based on software licences with upgrade costs and long contracts.
Software as a Service (SaaS) ensures that technology remains innovative by providing products that continuously improve without upgrade costs.
It might be time to junk your current platform and buy something new.
But don’t rush. Take the MVP approach. Evaluate integrations. Create a technology roadmap.