Importance of Modern IT Solutions in Banking Systems

Last updated on June 23rd, 2022 at 04:25 am

Banks and other enterprises in the financial sector are the largest consumers of information technology products. According to Gartner analysts, in 2021, IT spending in the IT banking and securities markets will grow by 4.96% to $ 605.5 billion, with a total market size reaching 3.74 trillion (growth – 0.6%). In the coming years, the average annual growth rate of expenses of financiers will be 4.8%, and by 2023 they will reach $ 730.2 billion.

Nowadays, the work of a modern bank cannot be properly handled without progressive management systems. The latter is being gradually integrated into the financial sector and perform the following functions:

• Coordinating the activities of bank divisions;
• Expanding interbank connections;
• Comprehensively solving the problems of analyzing banking activities;
• Improving banking technologies;
• Increasing the level of manageability of internal systems;
• Improving the quality of service by creating automated workstations for specialists of all levels.

As a rule, the choice of a banking software solution is associated with the price – reliability – performance ratio. What is more, many financial organizations not only purchase the product but also sign agreements with IT service providers, such as fintech development company, for its subsequent maintenance, ensuring high-speed data exchange between branches, with customers, and with other banks.

Evolution or Revolution?

There are a lot of different IT technologies that run (will run) the banking business. Cloud data storage environment, cybersecurity systems, solutions for working with big data – these are some of the new IT products that are changing the banking industry. And there are five key areas in which something important for the financial industry is happening right now:

• Strengthening the role of analytics and close work with the data;
• Expanding the use of open banking interfaces;
• Growth of the digital payments segment;
• Strengthening the role of omnichannel interaction with customers;
• Development of partnerships in the field of fintech

Proper functioning of a bank is impossible without constant data check-up and analysis. Financial statements, execution plans, and budgets, key performance indicators, balanced scorecards – these are some of the variables that should be kept under control and analyzed by the internal banking systems. The analytical component is also present in various types of management accounting, including profit center accounting and funding.

Taking into account the amount and diversity of data to be processed, different tools are necessary – from the simplest spreadsheets to analytical functions of automated banking systems (ABS) and specialized analytical applications. Let’s take a closer look at the latter option since it has proven to be an effective instrument in banking affairs management.

Scope of ABS Programs

All ABS are created to solve specific accounting and management tasks, have their own functionality, and industry focus. Each software product includes standard features common to most IT solutions, as well as industry-specific capabilities tailored to the specifics of the business. In addition, ABS products can be used both individually and in conjunction with other IT solutions, thus, allowing you to cope with all the main tasks of a large company.

As a rule, the ABS programs are used to automate the following internal processes:

• Regulated accounting;
• Retail and warehouse management;
• Financial planning and cash flow accounting;
• Budgeting and consolidation;
• Production management and accounting of production costs;
• Logistics and procurement management;
• Customer relationship management (CRM);
• Maintaining personnel records and calculating salaries;
• Integrated enterprise management;
• And many more.

Of course, any ABS program can be modified and adapted for the tasks of a specific area. However, it is better to check whether the solution can take care of all your needs before you purchase a ready-made industry product.