Banks today are transitioning to a universal banking model as a means to control costs and increase profits. The universal banking model is “a corporate structure where a financial services company offers both investment services and commercial savings and loan services together.” Simply put, it is the marriage of retail banking with investment banking. Touted to be the best possible solution for the current problems of the banking industry, universal banking model changes banks to one stop source for all kinds of financial services. According to Bank of America's Brian Moynihan, “the model (Universal banking model) is the most important model there is because it gives consumers access to global information, capital markets, investment advice and basic banking all in one place.” Hence, apart from doing their regular services such as checking, savings, and loans they would tread new terrains such as peer-to-peer lending, micropayments, collaborative financial planning, and social savings.
The implementation of new regulatory directives such as the Foreign Account Tax Compliance Act (FATCA) and anti-money-laundering rules has made regulatory compliance a critical factor in day-to-day operations.
Hence, today the banking industry needs banking software solutions to
· comply with regulatory requirements
· make business lines more efficient
· understand their customers more greatly
· increase profitability
· reduce costs
Banks can tide over the issues of ageing technology, complex processes, and low efficiency by collaborating with industry experts who can help build and support banking software solutions. Such a move would help banks to
· Leverage SaaS models to incorporate SOA best practices
· Develop financial reporting products that implement XBRL standards, adhere to SEC norms and generate statutory reports
· Design lending applications that integrate with credit bureaus and credit reports
· Develop frameworks for fraud detection and prevention
· Build financial analytics and business intelligence tools
· Migrate legacy banking software to a Cloud Computing model
· Ensure banking software compliance with MiFiD, Basel II, trading & broking KYC and anti-money laundering regulations
· Develop mobile banking applications
Thus by embracing innovation, the global banking industry is looking towards changing the landscape of this sector.
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