FIS Modern Banking Platform
Advance your bank with a modern core platform.
Dr. Sven Ludwig | Strategy Director, FIS
June 22, 2020
On April 15, the G20 announced to invest $8 trillion into the global economy. IMF reported a $1 trillion increase to globally $9 trillion just in April. We can safely assume, there is more to come. On top of that, banks will provide further loans to heal the world’s economy. Regulatory bodies around the world are even relaxing capital and liquidity rations to maximize banks’ ability to grant loans.
As a result of all these actions, banks’ balance sheets – at least in G20 countries - will grow exponentially. To put above figures into context, the total balance sheets of all banks for South Africa is $0.4 trillion, for Germany $5 trillion and even for the U.S. it’s $14 trillion. If you go back to the world’s oldest surviving bank – Banca Monte dei Paschi di Siena (BMPS), it’s taken banks 552 years to grow to these sizes! Now, they will grow by 50 to 100 percent – within only a few weeks or months. The genesis of a new financial system is in fast forward.
But this new financial world cannot emerge without further digitalization and modernization. Already, a fifth of every dollar spent globally on IT is invested by the financial system. Yet vast parts of banks’ IT still consist of legacy systems and architecture.
Banks are already IT companies with a banking license. But many are more a “walkie talkie” than a smartphone. But advanced technologies are playing an essential role as we continue in coronavirus relief mode and move into the rebuild phase. In this phase we need to support the exponential growth while keeping the bank safe by efforts such as:
So, look for regulators to talk about technology more than ever. As the European Central Bank, the supervisory body of the major European Union banks, said, “If banks reduce their dependency on end-of-life systems and increase their audits of critical IT functions, they will be able to manage their IT risk more effectively – which is particularly important in the current circumstances.”
Introducing advanced technologies can be accelerated by breaking up the value chain of a traditional bank and adopting innovative concepts such as Business Process as a Service (BPaaS), which will help in almost every dimension of the respond and rebuild phases.
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