12 Jul, 2022

The new architecture of the financial industry


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The importance of digitalization can be seen in its impact on process optimization and operational risk reduction, not to mention the rate of return on investment in new technologies.

Going to the bank, standing in long lines for hours, or going through long bureaucratic processes is no longer a reality in the financial industry since the advance of digitalization. So much so that we already have digital banking institutions, which do not have physical branches, where all issues are solved digitally.


The convenience, speed, and flexibility offered by this sector make digital institutions grow every day, and they are preferred by the public. The results are alarming: some digital banks have more brand value than traditional institutions.


Digital innovation, already on the agenda of most companies and in the financial sector, is becoming more accentuated as it becomes a competitive differentiator.  The importance of digitalization can be seen in its impact on process optimization and operational risk reduction, not to mention the rate of return on investment in new technologies.


Facing a race towards digitalization, institutions are concerned with the security of users and their data, while dealing with the need for good navigation on their platforms.  It is essential to think about the customer journey and the experience offered when there is integration between the channels accessed, for example, smartphones, computers, tablets, and even smartwatches.


More than a good technological experience, users and institutions are also concerned about not putting their accounts at risk. With more options to access accounts wherever and whenever they want, the security of data and assets becomes a central factor for operations.


Technology is also at the forefront of the fight against cyber-attacks. Therefore, the financial industry is increasingly looking to intelligent technological systems such as artificial intelligence and machine learning. These tools should serve to detect patterns in consumer behavior and automatically block suspicious activities.


Therefore, digitalization is a natural evolution in modern economies, and to be strategic for business it must be based on providing a good user experience while maintaining cybersecurity. What for many institutions can be a challenge, for ARMIS is the solution. Here we support digital transformation for the end-to-end banking industry.


Whether in consumer format, user experience or in the area of regulations and legislation, there is no denying that the avalanche of technology has re-architected the financial industry and that it is now necessary for business survival.

But how is the future of the financial industry re-architected anyway?

The financial industry continues an increasingly digitized path. It is this new reality for banks that must be thought of as a new moment to review structures both for financial and operational functioning and for all other aspects such as security, sustainability, etc.


In the digital world one must also be concerned with balance to promote trust and humanization of relationships. Working in what we call "Frontend Client" has become a pillar of differentiation in customer service since it is also through technology that provides a memorable consumer journey.


The expansion of digital channels with the arrival of Open Banking is also a crucial point where we can notice the remodeling of the financial sector in the era of technology. In Open Banking financial institutions can share data (with the customer's authorization) to offer the most appropriate solutions in credits, loans, among other transactions.



If technologies evolve in the financial industry, what about security?

Still citing Open Banking, although it may cause some strangeness to users, it is a secure system. The operation of this information exchange is anchored in the PSD2 Standards (Payments Services Standards, which regulate this type of data transaction. The regulation establishes a set of rules on the European continent to enable individuals and companies to move their accounts as they see fit. In addition, PSD2 imposes rules on the security systems of banks, such as requiring two-factor authentication, among other essential tools to prevent and combat fraud. Institutions that do not follow the rules risk paying very high fines or even being declared bankrupt.


Another aspect that also demonstrates how cybersecurity is developing along with the advancement of digitalization in the financial industry is the concept of Privacy By Design.  This is an approach from the field of Systems Engineering that takes privacy into account during the entire process of building software (or service), from the very first moment it is thought of.


In Privacy By Design every little piece of a technology developer's construction, architecture, and planning must thoroughly pass strict cybersecurity criteria. In the General Law of Data Protection (LGPD) Privacy by Design represents a change in the way privacy and the protection of users' rights and freedoms are guaranteed, as it is thought out and incorporated into business practices in advance.



Is your financial organization ready for this avalanche of digitalization?

ARMIS is a technology partner supporting banking institutions on their digital transformation journey. In Europe, Latin America and worldwide, we advise and execute a plan to co-create an ecosystem of innovation and security to leverage increasingly digital business.


Come understand the nuances of your organization and how to make it more competitive in an increasingly virtual market, putting it ahead of trends while ensuring the integrity of your customers.


From traditional to digital, count on ARMIS. Contact one of our experts and learn more. 

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