The increased platform stability and performance SaaS can provide can result in improved customer experiences 

By Keith Rowling, Senior Vice President and General Manager of EMEA at Fiserv

As innovative card management solutions become commonplace, more banks are shifting to a software as a service (SaaS) approach, through which software is centrally hosted and made available over the internet, streamlining their processes and significantly reducing operational costs.

Nevertheless, as it stands, numerous financial institutions across the world still operate in-house solutions that are complex and costly. These systems can become increasingly expensive to operate and maintain due to high fixed costs, regulatory compliance requirements, and processing and related services costs.

Financial institutions that streamline their card programmes by moving to SaaS solutions can decrease operating and maintenance costs while furthering their overall digital transformation and business competitiveness.

Greater flexibility for financial institutions 

The SaaS approach can provide financial institutions with an integrated suite of tools, such as digital cards and loyalty management, advanced fraud models, risk management, and analytics, to which they previously might not have had access. It enables them to identify the key areas that are important to them and integrate them onto the same platform.

Financial institutions opting for a SaaS approach rather than on-premise, in-house solutions have the benefit of sharing the same system with a number of other banks across the globe, making it more cost-effective to address Visa and Mastercard mandates, for example, while innovative capabilities can be introduced without extensive development costs.

With an in-house model, each patch or upgrade could be costly and time-consuming, whereas businesses implementing SaaS typically receive upgrades to new versions of the system regularly throughout a year. Often, multiple new features are included in the package, and the business can choose which ones to ‘turn on’.

Decreased operational risk

Financial institutions managing debit and credit cards via in-house systems often operate software that is heavily customised, making it difficult to maintain and upgrade the whole system, which can result in reliance on outdated technologies. This in turn can lead to cost inefficiencies and increased operational risk.

Migrating debit and credit card processing and ATM switching to a SaaS solution can lower operational risk for banks, reducing dependency on multiple vendors by consolidating an often scattered and geographically dispersed mix of suppliers as well as in-house operations to one single global provider, streamlining operations and simplifying processes.

On the front foot: MONETA Money Bank

MONETA Money Bank, one of the largest banks in the Czech Republic, sought to replace its complex in-house credit and debit card management system to reduce costs, lower operational risk and innovate faster. MONETA serves 1.4 million clients through various digital channels and more than 150 branches.

Switching to a SaaS solution, the bank successfully moved 900,000 accounts and 1,050,000 cards without any service interruption. In addition, the bank reduced its running costs by approximately 30% compared to the cost of running its previous solution in-house. The bank also reduced its regulatory and compliance costs and changed the operating model from a largely fixed costs model to a transaction-driven one.

Implementing the new solution also eliminated previous challenges for MONETA Money Bank and contributed significantly to their digital transformation strategy by putting in place a set of modern card capabilities to enable them to better serve their customers.

Improving the customer experience

As MONETA Money Bank found, tapping into SaaS enables financial institutions to provide state-of-the-art user experiences, including digital and real-time customer interaction capabilities, such as onboarding, instant issuing and instant spend, allowing customers to transact immediately after being approved for a card, along with day-to-day customer servicing.

These microservices-based platform-as-a-service models can support orchestration of the digital user experience with a set of application programming interfaces (APIs) to enable push alerts for in-app, mobile messaging apps and SMS notifications.

SaaS solutions can also enable a fully integrated suite of card management tools, such as digital cards and loyalty management, while financial institutions have access to a wide range of new lending and credit products in much less time than would be required for custom development or integration.

Future-proofing in the digital age

The SaaS approach allows financial institutions to focus on growing their business and moving their digital strategy forward, while letting a specialist third-party manage the technology and day-to-day operations such as compliance and product development. This in turn, enables financial institutions to remain competitive and offer their customers an experience that suits their everyday digital lifestyle.