Note: This article was co-authored with Saraswathi Ramachandra
Fintech has taken the financial world by storm over the last few years and continues to transform the way people use financial services.
In recent times there has been a definite emphasis on the demand for digital transformation of banking & financial services. Fintech has evolved to address this demand. The term Fintech often refers software applications & tools that provides banking & financial services to customers over Internet.
Fintech also represents a massive digital transformation of banking & financial services. All CEOs of Banks & financial services firms are now aware that Fintech is critical for success. This digital transformation is making every bank & financial company into a software company.
One of the foundations of digital transformation is using software applications to constantly create new channels to engage customers and to keep employees productive.
Fintech is all about delivering financial services to customers on 24x7x365 and this implies delivering quality software releases that meet or exceed user expectations. The pressure on delivering quality services with software - implies firms will have to deliver software in a continuous mode - also called as DevOps mode of delivery.
DevOps model was developed for Ecommerce & Cloud services - where organizations deploy new software several times a day with a very short development-to-deployment cycles. DevOps transforms the way organizations develop, deploy, monitor, and maintain applications, as well as modifying the underlying infrastructure.
DevOps has quickly evolved from a niche concept to a business imperative and now Fintech companies are striving to incorporate DevOps tools and principles.
In this article, Here are six key points that ensure success of Fintech.
1. For Fintech to be successful, DevOps must have buy-in from leadership
DevOps is not about changing the way software is deployed. DevOps is a way of transforming the way business delivers financial services profitably.
The value of successful DevOps is already quantified. According to the 2015 State of DevOps Report, organizations that effectively adopt DevOps deploy software 30 times more frequently and with 200 times shorter lead times than competing organizations that have yet to embrace DevOps.
They also have 60 times fewer failures, and recover from those failures 168 times faster. Those are impressive numbers and define why succeeding at DevOps is so important for organizations to remain competitive today.
While it takes a new set of tools to implement DevOps, Successful DevOps adoption is more than just a specific set of rules or tools, and it can mean different things to different organizations. There are many definitions about what DevOps is — maybe it's about continuous delivery, or it's about release speed and quality, etc. The important part is that however you define DevOps for your business, your explanation should be clear and consistent.
DevOps is not about release speed — it's about meeting the increasing expectations of consumers. DevOps is not about continuous delivery — it's about streamlining development and removing deployment hurdles in order to function more efficiently.
As Fintech solutions evolves, DevOps becomes the key to deliver changes rapidly. If top leadership is not buy into the DevOps model then it's a much greater challenge - to succeed.
To succeed in Fintech, DevOps must reach its full potential. This implies changing the way the organization fundamentally operates and that requires leadership support to approve, support, and in some cases be willing to lead this transformation.
2. Fintech Software quality is measured by customer experience
Fintech success greatly depends on meeting or exceeding customer expectations. Fintech software is not just a bundle of software, it is about how the bundle of software come together as a whole and offer meaningful, timely and valuable services to customers.
In hyper-competitive landscape, software has to be delivered continuously and with quality. DevOps is the process that delivers continuous improvements. DevOps also addresses the need to streamline software development and removing deployment hurdles in order to function more efficiently.
Knowing the quality of customer experience implies collection of metrics. One needs to look holistically about metrics. Collecting & analyzing metrics which tell how effectively customers are using the software and how well the software is working.
This implies measuring standard ITIL metrics such as Mean Time To Resolution (MTTR) or Mean Time Between Failure (MTBF), Mean RFC Turnaround Time (MRTT), Total Release downtime (TRD) etc can give a lot of meaningful data. But it may not be effectively measuring what customers doing and how well the software is working, this requires Application Performance Monitoring tools.
3. Application Performance Monitoring tools are critical for Fintech
How well a software performs has a direct impact on customer experience. For example, if a transactions take additional time to complete, then customers will not be satisfied with the product.
This implies measuring application performance. There are several tools that measure application performance: Tools that measure application response times, Application read/write latency, Application resource utilization, Simulated synthetic transaction times etc. This will help spot problems in real-time and respond quickly to mitigate problems.
The key with APM is that it can provide rapid situational awareness or instant visibility into emerging problems so that the right actions can be taken immediately to avoid negative user impact. When APM is integrated with DevOps, software development teams can know what is happening at customer site and respond quickly. This can ensure quality customer experience.
4. Fintech needs lots of data collection & analytics
Analytics are essential for all areas of business, especially when it comes to improving your software strategy. In order to make sure your applications always live up to the quality expectations of your users — and to stay ahead of your competition — investing in an effective analytics solution should be your main priority.
Fintech requires collections of vast amount of data - both in terms of machine telemetric data, APM metrics, DevOps Metrics, ITIL metrics, customer usage metrics ( when, where, how, often) etc.
This data must be analyzed. An ideal analytics solution will be capable of easily correlating application performance with user engagement and business data in order to ensure that all software decisions support and drive desired financial outcomes.
Fintech requires agility in all aspects of business. Manual processes and human intervention impede that agility as they are time-consuming and prone to error. Analytics also enable for rapid automation. Once data is analyzed and results are known, several decisions and executions can be automated. This has led to a whole new field of software robotics in banks that can automate repetitive tasks for a more efficient workflow.
For ICICI Bank, these "software robots" have been deployed across functions in retail banking, agri-business, treasury, trade and forex. Software robots are being used to automate 20% of banking transactions. The bank is expecting a significant improvement in its cost-to-income ratio once the initiative is rolled out in full.
Analytics is the compass that guides Fintech. The success of Fintech software is not in the software itself - it is how fast one can measure the effiency, effectiveness of the software and how quickly it can be improved.
Fintech is not just about the software itself; It's about how that software connects with customers and partners to complete financial transactions - which generate greater value to users. Understanding the value of analytics as a key element of success is crucial for long term success of Fintech products.
5. Fintech is not just about Software — it's also the way business operates
While Fintech delivers financial services to customers in a fast & efficient manner. Behind the software there is a whole big organization that needs to evolve to deliver quality software in fast continuous mode. Fintech requires continuos development, continuos integration and continuos delivery. The key to success is managing the development and operations.
Fintech has evolved beyond a strictly software concept. Fintech involves software, IT tools, applications, and the delivery of tech-based financial services, which in today's digital world is the responsibility of everyone in the company.
Effective Fintech operations involves the whole company collaborating more closely. Even a strictly IT based project touches other teams and departments — like HR or accounting. Those interactions can be roadblocks if they're bogged down in corporate bureaucracy.
Traditional banking corporate structures and processes inhibit efficient collaboration and impede productivity. DevOps culture is about breaking down silos, removing barriers, and improving communication between teams so employees are empowered to get things done faster and more effectively at the same time. It's important to make sure that everyone understands the business importance of Fintech software, applications, and the competitive advantages of being more agile.
6. Successful Fintech solutions requires constant feedback and feed forward cycles
Fintech is based on agility. Agility implies faster collaboration within the banking organization and faster response to customer issues. The software tools and business processes for Fintech has to be built to deliver feedback or feed forward information throughout the organization.
Rapid data collection, data analytics helps in getting customer feedback in real time and this feedback can be passed to different functions of the bank. In order for different functions of the bank to interact smoothly and provide input that has value, one must have tools capable of focusing on different elements of the Fintech process that can present information in a context that's relevant to each group audience.
Contextual relevance is particularly important in feedback systems. Business operations must create dashboards that present information that matters to them. This enables all groups to monitor current operations and respond in ways that helps the whole organization function more efficiently.
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