Is outsourcing your core software right for your business?

Financial institutions and wealth managers are under pressure to improve operational efficiency. Is it time to move to cloud?

Gartner predicts that by 2025, 80% of enterprises will shut down their traditional data centres. Ten percent of organizations already have. This does not mean everything is moving to cloud. But it does mean that IT leaders should start thinking about where current and future workloads will live based on business needs, such as operational efficiency, client engagement and GDPR regulations, instead of technology needs.

“In Asia, 94% of wealth managers said their main driver of cloud adoption was to boost digital innovation and find more cost-effective ways to serve clients.”


How to manage increasing complexity and costs and still focus on clients

Outsourcing core IT infrastructure operations could be part of the solution

In today’s fast-paced, highly digital business world, the need to quickly respond to changing market conditions and offerings creates a multitude of challenges for financial institutions and wealth managers.

In the future, underlying IT platforms not only need to be able to scale depending on workload, they also need to be able to seamlessly integrate with third-party applications. This includes contract management of software vendors with the responsibility and expenses of managing and monitoring all the possible technical components and issues that are associated with the software.

“Managing increasing complexity and IT infrastructure costs become distractors for financial institutions that need to focus on their clients and service offering.”

Different financial institutions have varied requirements when it comes to outsourcing operations. Outsourcing the near-full set of supporting components or even the full banking suite in its entirety can be made through Software as a Service – SaaS. SaaS offers out-of-the-box software that provides built-for-purpose business service. It is a tried and trusted solution that helps companies adapt to the higher pace of business by speeding up time to market, scaling their operations more easily and, ultimately, reducing cost of ownership.

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Making it easy to transition to SaaS

A focus on standardization and automation reduces the burden on clients

Outsourcing SaaS allows financial institutions to transfer the responsibilities of software updates, server maintenance, data backups, disaster recovery to a partner that handles this service for many clients. As a result, some of the back-end burdens for financial institutions are alleviated allowing for higher flexibility, lower costs, and increased efficiency. Avaloq strives to be that trusted partner who understands the specific needs of a financial institution and has an in-depth understanding of IT landscape management and financial industry application knowledge.

Avaloq’s vision is to provide platform services to enable a faster transition to SaaS services. This reduces the burden on our clients of undergoing a full transformation and alleviates their worry about the numerous activities required to operate the underlying platforms. At the same time, it delivers more flexible, reliable operations.

Future market trends clearly indicate that infrastructure platform outsourcing is an initial step but achieving full independence from IT-related aspects will allow financial institutions to gain the momentum they need to move forward.

If you would like to know more about how Avaloq delivers SaaS services, learn more on our dedicated SaaS web page. Or get in touch and let our cloud experts provide you with the insights you need to transition to a SaaS model.

Our roadmap

Continuous improvement of our solutions – for the near and long term

Present – Short-term improvements

  • Avaloq aims to identify the specific needs of our clients and reshape our software as a service (SaaS) offering to benefit our clients even more.

  • We will make our application development environment available to our clients as a new service offering (ADAIaaS). This will allow clients that use our core banking platform in-house to have their developers work on the very same environment that we use to develop our core products. We will take care of all the necessary aspects of operating this development environment.

  • ADAIaaS is built in an extensible way so that clients can expand or shrink their development environments based on their needs.

  • Our new Front Workplace will become the new standard for relationship managers. It can be used in conjunction with our core banking platform but also independently.

  • The Avaloq Developer Sandbox service offering will enable developers from banks and community clients to create integrations and to access the latest releases of Avaloq products with a reduced learning curve and entry barrier to Avaloq applications.

  • Avaloq will offer data analytics capabilities as part of the service centre offerings.

Beyond – Long-term advancements

  • We will broaden our SaaS offering to cover all technology stacks ranging from our private financial cloud to a broad range of public cloud providers.

  • We will focus on offering our services to clients globally and continue to expand our technical footprint. We currently have technology hubs throughout Europe and Asia.

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