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Published
25.10.2022
Digital transformation in the banking and
finance industry
Digital transformation is a disruptor in most sectors and financial services are no exception. Digitisation
and automation have made the sector more customer-centric and enabled businesses to remain competitive in the
face of continuously changing business requirements. Today digital transformation can solve most of the
challenges in the financial industry. Continuous automation and digitalization is the only way to keep
competitive under constantly changing business requirements.
Digital transformation in the banking and finance industry
The financial industry has been significantly impacted by digital trends and FinTech businesses are part of that progression and modernization of the industry. Traditional banking and finance companies have found modernization more challenging as a result of cumbersome, legacy systems, the need to manage changes to regulations/laws within those existing systems and respond to global forces which continuously affect the industry.
FinTech start-ups and big tech companies have been able to capitalise on this and fill a gap in the market for more customer-centric banking and finance. Their streamlined approach has also enabled a cost-effective and personalized service for consumers. FinTech’s growth in market share has led to traditional banks needing to respond more rapidly to consumer demands and market challenges.
What are the main challenges for the banking and finance industry?
FinTech start-ups have a technological advantage over the larger, legacy banks as they can implement flexible, agile tech platforms from launch which make scaling easier. Big banks face the need to modernize and also continue to adhere to continuously evolving industry standards.
Some of the challenges faced by the industry include:
- Assets protection requirements driven by the regulators and business owners. Usually, these requirements mean less dependency from big foreign suppliers and using local program development and open-source software
- Lack of resources including a shortage of tech specialists
- Lack of innovation within the sector (most banks are mindful of what their competitors are doing and make similar changes to their own systems, but by this point the tech can already be outdated as the market is evolving rapidly)
- The need to modernize operational resources to expedite time-to-market for new products and ability to scale
- Use of industry standard solutions that are not really customizable and therefore lack flexibility and require large resources for maintenance
- Large amounts of data stored in disparate systems which makes it difficult to optimize business processes
- Few specialists and development tools in areas of AI, machine learning and RPA technologies
Why is digital transformation in the financial services industry so important?
Banks and other financial institutions are increasingly aware of the importance of the customer experience and how technology can improve this. A business’ technology stack is important to be able to make changes to improve business efficiency, be competitive and respond to cyber threats quickly.
Banks need to be able to analyze large amounts of data in real-time to provide efficient and personalized interactions with customers, grow their customer bases and ensure security of customer assets.
The benefits of digital transformation and automation
With a proper tech platform and organized processes, a financial business will get benefits:
Increased operational efficiency
Many organisations operate different business processes across disparate systems with no central
repository of data. These systems are often not integrated and as a result, there is significant manual
admin required to pull data together. To improve efficiencies, organisations need to integrate systems,
connect isolated data sources and implement automated business processes.
Improved customer experience and customer loyalty
Organisations that automate business processes can harness customer data to create relevant and
up-to-date customer propositions to encourage upselling. Organisations that use low code platforms also
benefit from reduced costs to do this.
Reduced risk exposure
Modular architecture used in modern tech platforms means that businesses can easily upgrade legacy
systems to minimize risks and respond to external challenges.
Specialised workforce
Using common open-source technologies and productivity tools helps organisations to attract the best
talent.
Quick development cycle
Modern tech platforms allow financial platforms to be integrated with other business ecosystems and
enable rapid scale, reducing time-to-market for new applications from months to weeks.
To make digital transformation successful, it is important that developers have a clear understanding of
the client’s objectives to build a seamless business process from customer requests through to delivery and
after-care. Using automation is important and the technology needs to be intuitive, user-friendly, and
cost-effective.
Complete automation of your business with Jmix
Jmix technologies are modern, reliable and secure, enabling businesses to develop their own flexible applications without incurring cumbersome costs of development.
Financial organisations are already using Jmix to:
- 01Create flexible enterprise-grade applications with developers guided through every stage of application development from model to data representation, through Jmix’s intuitive tools. Organisations retain full control over source code as Jmix is built using open-source technology which means that it is much easier to scale without the need for additional license costs.
- 02Migrate business logic and existing interfaces from third-party vendor systems, reducing dependence on other companies and their infrastructures. This also reduces licence fees and enables the use of native cloud databases and the associated benefits of flexible scaling and fault tolerance.
- 03Modernize legacy banking applications through database re-engineering that allows migration from existing data models to a modern tech stack with minimal effort. Screen generation tools and support for enterprise authentication and authorization services accelerate the migration of existing business functionality. Additionally, migration from Oracle and Microsoft SQL Server to open-source versions of database management systems can significantly reduce costs and release financial resources for further modernization.
- 04Automate routine business processes by building configurable workflows in the IntelliJ IDEA development environment.
- 05Integrate systems seamless through Jmix’s Spring Boot technology which gives developers access to out of the box libraries and sample integrations. Developers can benefit from community expertise and a Generic REST API which facilitates the integration of Jmix applications with existing infrastructure. This enables flexibility and compatibility with existing software products in use in the financial services market.
- 06Develop MVPs quickly. Jmix Studio’s development tool is embedded in the professional IntelliJ IDEA environment. Developers can write code in a familiar IDE with tools for rapid data model prototyping, visual design of user screens and processes, and a tool for security system configuration. Developers and analysts can manage a project by tracking and merging changes through Git technology with no additional software required to test hypotheses.
- 07Create both backend and frontend of new applications as Jmix offers Java and Kotlin. Jmix independently builds application architecture and manages the interaction between layers, significantly reducing design complexity and expediting the time taken to create a prototype.
- 08Develop scalable prototypes which are secure thanks to Jmix’s role-based security system. The platform automatically applies security rules regardless of the data access source which significantly reduces the risk of data leaks when communicating between the front and backends at architecture level. Professional auditing and logging tools, combined with built-in security, enable a secure and stable foundation for application scale.
Examples of business automation in the finance industry
A Government Billing System from Scratch by Card Access Services
Digitalization of the whole country’s payment system.
TAB Bank gains internal process excellence to reduce costs while expanding the business
Complex automation systems for a bank from the USA.
Frequently Asked Questions
You can create anything you want with Jmix but some of the most common systems we have seen are business
process automation flows for customer queries/requests, automated KYC verification, customer 360 analytics,
operational risk management, process automation of underwriting and new digital products at
prototyping/piloting stages.
Jmix allows developers to automatically transform the stored data structure from a legacy system in a new
data model. Once this is complete, developers generate standard data processing screens and configure the
security system. Business logic can then be migrated, writing in Java and using a business process designer
in BPMN 2.0 notation. Built-in tools for database reverse-engineering, generating standard screens for
working with data, declarative security settings and a built-in business process designer allow developers
to automate manual migration of legacy solutions and dramatically reduce migration time.
The standard Jmix UI stores objects that reflect the UI state in users' web browsers in the application server memory. This means that server memory size (or total memory size of all cluster servers) equals the maximum number of connected users. The main consideration when using Jmix UI is predicting the maximum number of connected users in order to calculate memory requirements in advance. Memory requirements depending on the application and data shown in the UI, but typically, it will be 5-10MB per user – this means that one server with 10GB of available memory can serve approximately 1000 simultaneous users. The largest applications developed at Haulmont support over 10,000 simultaneous users.
When using separate frontend applications that connect with the Jmix backend via the REST API, there are no memory limitations because REST is stateless. Therefore, it is common practice to create a frontend for the external users if the number of simultaneous users is likely to be unpredictable.
Jmix is designed for professional developers. Software developers who are using outdated tech stacks or
junior devs with limited Java knowledge can learn Jmix. It is an easy framework to learn and use for
developers as it predefines the architecture of your application and facilitates easy deployment in a web
environment.
The payback period of the platform depends on what you're comparing it to - traditional development or an
existing Low Code/BPM solution. We have considered both options for you and prepared a smart
ROI calculator. It estimates the amount of financial profit that you can
get using Jmix for your project.
A license is issued for each developer seat. User seats, processes, environments and use cases are not
licensed and are not billed. Each developer requires a separate license so you will need as many license
keys as you want to use on the project.
Some sceptics believe that open-source platforms are less secure than proprietary software. This is not true; the key difference and advantage of open-source code is that it can be analyzed by a much larger number of specialists with full access to the application source code. This speeds up the time taken to eliminate vulnerabilities as nothing is hidden in the so-called ‘black box’.
CUBA Platform, the previous generation of Jmix, has been developed as an open-source project since 2016. The platform team openly publishes the product development plan and maintains the development in the public GitHub repository. The Jmix platform is a mature open-source project based on a modern and robust technology stack. The platform experience does not exclude all security risks and tracking and prevention is essential. On GitHub, we have an active community of 25,000 developers and over 1,000 completed projects, a solid foundation for creating secure applications.
Yes. With Jmix, developers can create new microservices and immediately publish them as docker containers
for further deployment to the production environment. Jmix applications can also interact with other
enterprise informational eco-system microservices.