How SaaS Augments Digital Transformation for Banks
The global banking industry spends $600 billion on technology and digital transformation each year, a spend forecast to increase by 20% each year to 2027. However, the complexity of these initiatives sees 70% of these projects failing to deliver their stated objectives1. The smarter approach? Balancing rapid innovation with stable core systems – what’s known as dual-speed IT.
While most banks and consultancy firms work tirelessly on the large-scale transformation of their core systems, innovative operators are piloting, testing and implementing low-risk, high-impact SaaS (software as a service) solutions that integrate readily with core systems.
This is especially true in loan origination. The sector is seeing over 20% annual growth in digital lending software2. Regardless, by 2030, up to 50% of retail banks are at risk due to the challenge of keeping pace with digital innovation. Competitive relevance depends upon a banks ability to accelerate change in their business processes. Proven SaaS solutions can play a crucial role.
Think tactically to gain an edge
Experienced bankers, know what’s at stake and how crucial it is to realise the business case for any new tech investment. That’s why we designed a system that operates seamlessly on top of core banking infrastructure – without the need for complex integrations.
Waiting years for complex end-to-end systematic overhauls, or even for the strategic decision to tackle such a project, hampers a bank’s ability to make the most of market opportunities while staying on the right side of regulators.
By taking the tactical decision to test a limited-scale implementation of bank-proven SaaS, a bank can swiftly see the benefits, while not interfering with core transformation efforts.
Saas solutions require less time commitment and can be integrated and scaled quickly. This helps reduce costs while ease-of-use saves time and money training staff on a new solution. Updates also come from providers, meaning solutions can be easily updated.
Customer expectations are rising, but so are challenges
Across every sector, consumers demand rapid, digital services without having to pay a premium. In banking, however, borrowing applicants are up against slow, complex, paper-based legacy systems.
Internally, banks are grappling with challenges that are slowing progress, making it more difficult to deliver on customer expectations.
Lack of traceability and control
Current workflows rely on phone and email, creating a lack of traceability and control. The absence of relevant solutions also creates issues in document management and real-time visibility. This makes it harder to resolve bottlenecks and leads to requests for redundant documents or duplicate information from customers.
High level of manual tasks
The manual collection and processing of information creates inefficiencies and increases risk. This includes collecting and verifying important documentation like income statements and property records, or verification of income, employment, and current debts.
Inefficient data management
Lack of communication with in-house platforms makes it difficult to create a centralised workflow. Underutilisation of data also hinders the ability to make decisions based on predictions or trends. Scoring models suffer from lack of data, while manual input means databases are fragmented.
Communication issues
Communication issues are rife, creating confusion around requirements, application status, borrowing costs and interest rates. This makes the application process slower and less transparent for customers and makes banks slow to respond or deliver important updates.
Because of these issues, large transformation projects are struggling to get off the ground. They’re suffering due to scope creep, banks over-engineering solutions, or taking on too-large multi-year projects which get left behind.
Over-reliance on consultants also slows progress and means the core of the issues they’re trying to solve gets lost. Building an in-house solution isn’t always the answer, when ‘plug-and-play’ SaaS solutions can be integrated quickly and at scale.
Gain speed, simplicity and scale for your mortgage operating system
The retail banking industry is facing a $1 trillion realignment driven by revenue fluidity and technology advancements. SAAS solutions like CreditLogic offer a turnkey operating system for mortgage processing, that’s proven at scale with leading banks. It can be piloted and validated easily in parallel with any bank’s existing transformation projects, then scaled at speed and within all regulatory bounds.
Generative AI (GenAI) and digitisation could cut product unit costs by over 50%, reshaping the cost structure of banking. SaaS gives banks AI-driven application processing, enhanced decision-making capability (with automatically generated credit accessibility, scores and approval packages), and intelligent document exchange, including electronic signatures.
Bank staff benefit from streamlined workflows that give them fast digital access to the information they need right when they need it. Digital alerts and reminders keep them on track and ensure consistent, sustained engagement with customers.
Meanwhile, customers enjoy an easy-to-use digital process for their applications, with instant feedback, and real-time voice and text chat when they need it.
This is key to helping ensure a transformation succeeds. While 55% of value loss occurs during and after a transformation, almost 20% occurs in the target-setting phase3. This means full potential might be compromised before transformation even begins.
If banks fail to innovate, they’ll struggle to keep up with costs as a result of using outdated tech. Smaller banks with a cost-income ratio (CIR) above 75% will struggle to survive, forcing many to consolidate or exit the market.
As banks continue to spend on digital transformation, it’s crucial to get the fundamentals right early on.
About CreditLogic – Saas Mortgage Origination Platform
Designed and built by bankers, CreditLogic is a mortgage origination platform that can be implemented without disruption. It has already cut processing times for major lenders in the Irish market by 90% and costs by 50% within the first few weeks of use.
As a strategic partner for growth and innovation, CreditLogic streamlines the mortgage application process for buyers, helping reduce costs and increase conversions in both segments.
References:
1. Forbes, 2023
2. Research and Markets, 2024
3. McKinsey, 2021
