Innovate Finance Global Summit was certainly one of the standout events of 2023 for us at Tuum. We convened with industry leaders ranging from innovators, institutions, regulators to policy-makers, startups and investors in London for two-days of thought-provoking discussion. The agenda shone a spotlight on the global fintech ecosystem, with an increased focus on the key areas that are enhancing, empowering and ensuring that fintech and financial services pave the way for economic growth, sustainability, and a financial system that caters for all.
We were honored to host a panel discussion that included industry experts Ove Kreison, Tuum CTO, Andres Kitter, LHV UK Deputy CEO, Ben Robinson, Aperture.co CEO, and Dharmesh Mistry, AskHomey CEO. The topic focused on how to utilize modern core banking systems to facilitate new business models and revenue opportunities. Watch the full panel discussion in the video below or read on for a synopsis of the main talking points.
Read on below for a synopsis of the main talking points.
What is a modern, next-generation core banking system and why are they different to traditional core banking systems?
Next-generation core banking systems aim to overcome the limitations of traditional systems by adopting modern architectures, technologies, and approaches. They provide greater flexibility, scalability, integration capabilities, and a focus on delivering enhanced customer experiences in the digital era.
Traditional systems typically have a monolithic architecture where all functionalities are tightly coupled and difficult to modify or scale independently. Next-generation systems are typically cloud native and built on a more modular architecture, often utilizing APIs and microservices.
What is the LHV business model and how has the adoption of a next-generation core banking platform enabled innovation?
LHV provides a payment infrastructure to over 200+ customers, and to facilitate this, LHV needs to run modern core banking technology that is cloud native and API and microservices based. LHV partners with modern fintech companies who are building very innovative products on top of its platform, which would not be possible on old technologies.
A lot of banks are running old, legacy core banking platforms that were never built for real-time processing. Real-time processing is critical now to drive fast payments. Banks that can’t do this will have a real issue.
Speed and flexibility are also key to issues such as compliance, risk management, security, etc., and building on top of old core banking systems will not provide the agility needed in this digital age.
Everyone is talking about ‘banking as a service’ – why should incumbent banks be considering this?
We are seeing a forced separation between manufacturing and distribution – with banks manufacturing the financial products and then partner institutions being the distributors – this is a big opportunity for the big banks as they have ability to scale.
If smaller banks try to repeat the same offerings around loans and credit cards, then they will struggle with the BaaS model because there is no differentiation – but, if they can find their niche, then they can find a BaaS approach viable.
Learn more about how Tuum’s modern, next-generation core banking system can benefit your business. Get in touch with us today.