Driving Innovation In Banking Through Digital Channel Optimization
In today’s digital age, businesses across various industries are analyzing the customer behavior to predict their next moves and make intelligent recommendations. By tracking various data such as time spent on websites, products viewed or purchased, and even location, companies can direct customers to new offers.
Banks have been using intelligent algorithms to provide personalized offers to their customers even before the advent of internet. With advances in technology and increased competition, access banking applications through multiple channels has become a necessity. Banks now offer their customers the convenience of conducting various transactions via online banking, mobile apps, ATMs and call centers any day of the week, at any time, without the need to visit a branch. This is a great opportunity for banks to reach their customers and make new offers.
Let’s take a closer look at how one of the largest banks in Turkey has addressed this situation and how we have made the offer process more effective through digital channels.
Why was this transformation necessary?
There were several factors that made it imperative:
- The existing banking infrastructure used by our client for these services was:
- Outdated and no longer fit for purpose,
- Had one of the highest CPU consumption rates and transaction costs in the bank, making it inefficient and costly to run,
- Difficult to find software developers who were skilled in the technology used, making it hard to keep the system up-to-date and secure
- Inadequate to meet the security needs of today.
- Resulting in unsustainably high maintenance and support costs,
- Not capable of supporting next generation technologies or integrating with other systems, and
- Having some of the codes older than the software developers themselves, making it difficult to implement new features and requiring significant development effort.
- The decision was made to adopt the same technology used by the global headquarters.
- In the banking industry, certain tasks must be completed within strict timeframes, such as legal obligations, financial transactions, and end-of-day work. Any delay or disruption to these tasks could have serious consequences. Because the existing system was consuming large amounts of CPU to deliver the right offer at the right time through the right channel, it was difficult to prioritize the new offer process, resulting in missed revenue and profitability targets.
From Legacy to Modern: Our Transformation Journey
Leveraging on our extensive experience in technology architecture and similar transformation projects, as well as our skilled resources, we drove the project together with our client’s team. We created a hybrid team, consisting of both DefineX experts and bank employees, to ensure knowledge transfer and adoption of best practices. This team embraced agile software development principles and a product management perspective, resulting in a significant impact in a short period of time, exceeding expectations. Here are some of the achievements:
- A new generation, open-source, and microservices-based architecture tailored to the bank’s specific needs.
- Selection of a new database management system, migration of data from the old one to the new, and a variety of configurations to optimize performance.
- To make the cultural change effective, regular trainings on the technology and the way of working is provided throughout the project duration. To enhance knowledge transfer, we supported the process with on-the-job trainings
- Thoroughly reviewed the existing code base while migrating to the new solution, removing unnecessary code, improving performance, and implementing code quality enhancements.
- Built a solution consisting of 5 domains and 23 microservices, along with a well-designed integration architecture to facilitate communication with the ecosystem. This activity was performed in coordination with all other affected domains.
- Contributed critical information, troubleshooting methods, and solutions to a knowledge base.
Unleashing the Potential: Key wins and outcome
- The team successfully replaced the huge and complex mainframe code, which had been written and modified by numerous developers over the years, with modern technology. Thus, a massive code base of 200.000 lines is streamlined into a more manageable structure. This made the codes in the production environment more modular, reducing the migration effort by 27%.
- The entire software is reevaluated and redesigned from the ground up, taking into account both technical and business needs. All bank units adopted the newly developed core components, promoting consistency.
- The team optimized the architecture to handle high-volume transactions, which can reach up to 50 million per month. This improvement significantly reduced CPU consumption, resulting in an annual savings of $1.3 million.
- The restrictions imposed due to high CPU consumption is eliminated, enabling timely delivery offers to customers. This resulted in approximately $2.1 million in additional revenue.
By combining DefineX expertise with the bank’s, we developed a modern and scalable technology architecture that optimized performance, reduced costs, and generated significant revenue. As organizations navigate the ever-changing digital landscape, partnering with proven experts can help them achieve their goals more efficiently and effectively. Our project demonstrates the benefits of a collaborative and agile approach to transformation, resulting in a successful outcome that exceeded expectations.