The digitalisation of businesses is spreading across a wide range of industries. The world of finance has also changed significantly in recent years, incorporating technological solutions into its structures. Modern banking is not only traditional banking based on fixed branches and traditional business models. It is first and foremost a sector where modern technologies such as artificial intelligence, blockchain and advanced data analytics systems are in daily use.
Table of Contents:
- Traditional Banking in the Digital Era
- Definition and Explanation of the Fintech-as-a-Service Phenomenon
- Benefits of Adapting to Fintech-as-a-Service
- Integration of Modern Technological Solutions with Existing Financial Systems
- Cultural Changes within Organizations and the Need for Proper Employee Support
- Data Security as a Key Aspect of FaaS Implementation
- Development of e-Wallet for Alamar Foods by Railwaymen
Traditional Banking in the Digital Era
I decided to write an article this time to illustrate how traditional banks have to adapt to this new reality in order to still remain competitive and at the same time attractive from a customer perspective. One of the paths most often chosen by financial companies is digital transformation. Today, simply transforming a company into a fintech profile is not enough. The future lies in FaaS (Fintech as a Service) structures. What is this phenomenon and why is it so widely recognised? I will try to provide comprehensive answers to these questions in the following text.
Before I proceed to discuss the FaaS model, let me first elaborate on why the modern financial sector requires a refresh. The main reason is the aging traditional banking model in the digital age. Current banking services aim to conduct all transactions on personal devices without the need to visit a bank and wait in line. We increasingly open accounts, submit loan applications, and settle transactions online. Therefore, banks and financial companies opening up to digital services isn't just a survival strategy but also an opportunity to thrive in a changing reality.
For some participants in the financial market, this is the last chance to adapt and not be caught off guard when the transformation replaces long-standing services. In this context, embracing modern fintech solutions could be a breakthrough comparable to the rise of smartphones replacing traditional mobile phones.
Definition and Explanation of the Fintech-as-a-Service Phenomenon
Alright. The term Fintech-as-a-Service (FaaS) has come up several times. It's time to explain it. FaaS is an approach based on modern technologies. It focuses on providing access to comprehensive financial services in the form of services. This mainly means that all digital tools are aimed at supporting financial solutions for both businesses and their customers. Compared to traditional Fintech companies, Fintech-as-a-Service is more flexible. Its processes utilize digital platforms, cloud computing, and application programming interfaces (APIs) to deliver necessary services to users as quickly as possible and respond promptly to their needs. FaaS significantly stands out in terms of speed compared to traditional banking. This advantage is likely to grow as more and more digital solutions are adopted.
Benefits of Adapting to Fintech-as-a-Service
Companies are increasingly turning to the FaaS model. The main argument distinguishing it is resource savings. The reduction of time, expenses, and human resources makes companies more inclined to choose Fintech-as-a-Service over the traditional Fintech model. Another factor is scalability, which allows for responding to changing business environments and quickly adapting to new conditions without incurring significant losses. The decision-making process also improves, enabling companies to gain a reputation as innovators within their sphere and reap the associated benefits.
The Fintech-as-a-Service concept is often chosen because of its various benefits for companies wishing to become more competitive in the market. As mentioned earlier, FaaS is distinguished by its flexibility compared to traditional Fintech models. Using such tools, companies can create their services taking into account all the variables involved. FaaS also has a significant impact on the customers using the company's services, and this is because their requirements, even the most advanced ones, can be met on an ongoing basis. Such methods mean that companies providing advanced financial services can expand their offerings and competences every day.
Integration of Modern Technological Solutions with Existing Financial Systems
The transformation of an enterprise towards the FaaS model comes with many challenges that need to be overcome. One of them is the necessity to integrate modern technological solutions with the capabilities of the current financial system in the company. Due to complex processes, the IT infrastructure in such places is often not easy to change quickly. The key to overcoming this situation is to find solutions that will enable smooth operation of both new and old systems while maintaining operational continuity and data security.
Cultural Changes within Organizations and the Need for Proper Employee Support
Another milestone to overcome is the cultural changes within the organization. Implementing new technologies often meets disapproval among the most traditionally minded employees who have become accustomed to current processes. To enable them to transition smoothly to the new realities, it is necessary to provide them with appropriate training and education about the ongoing changes. Such an approach will allow for a smooth transition and maximum utilization of the potential of both technology and the workforce.
Data Security as a Key Aspect of FaaS Implementation
Concerns often revolve around data security. The more sensitive customer data is involved in various banking operations, the greater the responsibility to ensure its proper protection. Therefore, banks and many institutions with access to this type of information should prioritize investments in high-quality IT security. Additionally, all legal regulations, such as GDPR, must be strictly adhered to, to prevent unauthorized access to any data.
I believe that the transition of traditional financial institutions to the Fintech-as-a-Service model is not only a necessity to thrive in the market that will surround us in the coming years. It is above all an opportunity to harness the potential inherent in new technologies. Companies can reach new heights in customer service by offering them various services while also streamlining existing processes. Skillful adaptation can aid in a smooth transition and also in competing with the competition present in the market.
Development of e-Wallet for Alamar Foods by Railwaymen
Actions related to FaaS are also part of Railwaymen's work. One of such achievements was the development of an e-wallet for Alamar Foods. This module was integrated with the existing API infrastructure of the company, allowing our firm to smoothly integrate with the existing tools and products offered by our clients.
Our team of developers developed the basic version of the wallet in about 3 months. At that time, it was limited to the most essential functionalities and integration with the API. Additionally, an intuitive administrative panel was created to provide clients with efficient management of payments while ensuring necessary security measures.
With each subsequent day of cooperation, we expanded the capabilities of the e-wallet. One of the flagship options was the ability to generate promotional coupons for restaurant owners. Thanks to them, users can enjoy discounts on their orders, which positively affects the overall quality of customer service. We also contributed to improving customer service by enhancing communication between the restaurant and the consumer. As a result of these actions, consumers can share their thoughts and simultaneously report any existing irregularities, leading to the development of the enterprise.
If you want to learn more about our cooperation with Alamar Foods, I invite you to read the full Case Study of this project.
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