How can Banks use Sandboxes and Prototyping to Accelera
As fintechs continue to outpace banks in offering engaging services to consumers, banks need to come up with fresh ideas. Steve Lacourt discusses how banks use sandboxes and prototyping to accelerate innovation
How can Banks use Sandboxes and Prototyping to Accelerate Innovation
By Steve Lacourt (@TheGlue_fintech)
As fintechs continue to outpace banks in offering engaging services to consumers, banks need to come up with fresh ideas. However, banks today are hindered by stacks of legacy technology that are not fit for a digital economy. It limits their ability to become agile and duly prepare to offer a great customer experience.
But banks can’t just jump and surgically remove the heart that keeps their systems alive. Replacing mainframe systems is very expensive and even then, it could endanger business continuity. Moreover, given the scope of such projects it can take a minimum of 5-6 years to complete. Time that banks don’t have.
All this puts banks in a paradoxical situation. Banks need to trim expenses but also need to keep pace with disruptive challengers who do not have to spend millions. And, there’s the cost of maintaining the old technology. Improving the customer experience is on top of their strategic priority list, so doing nothing is not an option.
What are the challenges of maintaining legacy, replacing mainframes and what are the alternatives? A few options include:
- Sandboxes: what, origin, lessons learned, requirements and properties
- Rapid prototyping labs: how can banks benefit from a true innovation laboratory managed by both staff and onboarded 3rd party suppliers, how to approach and what are the risks.
- Middleware solutions: there’s an abundancy of companies claiming to have the silver bullet solution, how feasible is this and do they really cover all bases.
