How IT and Business Alignment Can Deliver More Connected and Frictionless Digital Banking Experiences

By Ada Westerinen, Director, Solution Engineering, MuleSoft

Ada Westerinen, Director, Solution Engineering, MuleSoft

Digital transformation initiatives helped many organisations during the pandemic, and the financial services sector is no exception. They offered banks the ability to create seamless ways of serving customers at home, supporting their remote workers, and driving new operational efficiencies. However, this transformation has also raised customer expectations higher than they’ve ever been. Today, simply providing digital banking services isn’t enough. They need to be as connected and frictionless as interactions with a leading fintech or big tech brand. To meet those expectations, banks need closer alignment between IT and business teams. This collaboration is key to delivering the new integration projects that are a vital driver of digital innovation and customer experience improvements.

Digital drives automation

There has been positive progress in this regard over the last 12 months, as IT-business alignment has improved in the majority (89%) of financial services organisations, according to MuleSoft’s new IT and Business Alignment Barometer report. This is leading to a number of benefits, from improved collaboration and operational efficiency to better customer experiences. It also bodes well for the future, as operational efficiency, creating more connected customer experiences, and becoming more agile for change are the top strategic goals for financial services firms over the next 12 months.

Increasing the use of automation will be key to achieving these priorities. From AI-enabled chatbots to straight-through loans processing, and fraud detection to HR screening for candidates, process automation is transforming the way banks do business. In fact, we found that 96% of financial services organisations have already implemented or are in the process of deploying automation initiatives, to create better customer experiences and boost operational efficiency.

Security and silos slow innovation

Despite the huge potential in automation-powered digital transformation, there are challenges that banks must overcome to make this a reality. Our research found that as financial services firms begin integrating data and applications to fuel automation initiatives, security and governance concerns are emerging. A majority (87%) of financial services leaders claim that these worries are slowing the pace of innovation. Effective security policies and controls will help to address these concerns – giving banks peace of mind so they can go faster, without needing to worry about increased risk.

Digging deeper into these concerns, nine in ten financial services leaders admit they’re worried about the security implications of empowering non-technical users to integrate data sources themselves. These concerns can be addressed if financial services firms seek out strategic integration platforms, which allow IT to establish, apply, and enforce security policies and best practices through a single pane of glass. These measures could include strong roles-based authentication and “least privilege” access to mitigate insider risk, for example.

Building a better bank together

Most financial organisations agree that IT has become even more important for helping to achieve business outcomes in the past 12 months. Yet increased consumer demand for mobile and digital services is placing significant pressure on their IT teams, and they’re struggling to keep up. Banking leaders must identify how they can respond to these growing demands and drive the business agility that will be essential to remaining competitive in the future. Improving integration efforts across the organisation will be a critical factor in their ability to succeed.

However, the MuleSoft Connectivity Benchmark Report reveals that just a quarter of banking and finance applications are currently integrated. This is because many financial services organisations are still reliant on legacy custom code integrations, which can be extremely time and resource-intensive and require a high degree of technical expertise to manage.

A more composable future

To address these challenges, banks should focus their efforts on harnessing reusable APIs to drive greater connectivity between data, platforms, and applications. This approach enables banks to improve business outcomes and drive more connected experiences. Low or no-code tools will be key to delivering this, enabling business users to get hands-on with integration and take some of the operational load away from IT. 

This is where IT-business alignment is particularly important. IT teams can focus on producing secure and governed reusable assets, whilst business teams are empowered to integrate and self-serve these IT-approved assets to deliver innovation faster. This will enable financial organisations to become more composable, so they can rapidly create new digital services from existing capabilities. UK digital-only Allica Bank used this approach to build a new business from scratch in less than 12 months. Allica built more than 300 APIs to unlock and unify data across its systems, creating a series of reusable building blocks it could use to quickly compose new digital capabilities in days or weeks, rather than months or longer. The APIs that banks create can also be exposed as reusable capabilities that third parties can plug into—creating new connected customer experiences across the wider financial services ecosystem.

With the continued progression of Open Banking initiatives, this is an exciting time for the industry. Thanks to API-led connectivity, financial institutions have endless opportunities to join new value chains, unlock more revenue, and drive innovation-fuelled differentiation. Fostering close alignment between IT and business teams will be key to their ability to maximise these opportunities to create greater value for the business and its customers.