Future-proofing Asia Pacific banks’ IT infrastructure to power agility and sustainable growth
Asia Pacific’s retail banking sector is characterized by rapid digital adoption, intense competition, and diverse customer needs. To lead in this dynamic environment, banks must future-proof their IT infrastructure, enabling agility, scalability, and innovation that power business growth and superior customer experiences.
Asia Pacific’s IT infrastructure landscape
According to research by Celent, 70% of retail banks in Asia Pacific planned to launch new customer-facing services using generative AI in 2024, and more than half planned to move more workloads to public cloud reflecting the growing maturity of the technology. However, legacy systems still consume significant resources – across the region 65% of total IT expenditure is allocated to “run the bank” projects. This in turn limits banks’ ability to innovate quickly and scale efficiently.
The region’s diversity—from mature markets like Australia to emerging economies like Vietnam—requires flexible, modular IT infrastructures that can adapt to varied regulatory and market conditions. Against this backdrop how can banks in Asia Pacific gain the capabilities they need? This is where augmented core and data comes into its own.
Augmented core: The engine that powers banking
Augmented core refers to the enhancement of traditional core banking systems with advanced technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics. This approach allows banks to swiftly adopt, integrate, and swap out technologies as needed, ensuring they remain agile and competitive. By leveraging augmented core, banks can streamline operations, reduce costs, and enhance customer experiences.
Agility through future-proof IT infrastructure
Future-proof IT infrastructure enables Asia Pacific banks to redefine customer experiences by utilizing cloud-native, API-first platforms that support seamless, personalized digital journeys across channels. These platforms allow banks to offer tailored services that meet the unique needs of each customer, enhancing satisfaction and loyalty.
Additionally, future-proof IT infrastructure accelerates innovation by employing microservices architectures. These architectures facilitate the rapid deployment of new products and features, significantly reducing time-to-market from months to weeks. This agility allows banks to stay ahead of competitors and respond swiftly to market changes.
Efficient scaling is another critical benefit of future-proof IT infrastructure. Hybrid and multi-cloud strategies enable dynamic resource allocation, ensuring high availability and cost optimization. Banks can adjust their resources based on demand, maintaining performance and minimizing expenses.
Moreover, advanced infrastructure visibility and centralized management help banks ensure compliance and security. These tools allow banks to meet evolving regulatory requirements and mitigate risks by providing comprehensive oversight and control over their IT environments.
Business growth powered by IT transformation
Modernized IT infrastructure supports sustainable growth by enhancing customer loyalty through AI-driven insights. These insights enable banks to anticipate customer needs and offer tailored financial solutions, fostering long-term relationships and trust.
Improving operational efficiency is another advantage of IT transformation. Automation and cloud scalability reduce costs and improve service reliability, allowing banks to operate more effectively and deliver consistent, high-quality services.
Expanding ecosystem partnerships is facilitated by open APIs, which enable collaboration with fintechs and third parties. This collaboration broadens product offerings and creates new revenue streams, driving business growth.
Attracting digital talent is crucial for ongoing innovation, and cutting-edge IT environments help banks recruit and retain skilled professionals. These professionals are essential for developing and implementing innovative solutions that keep banks competitive.
Strategic priorities for Asia Pacific banks
To thrive in the rapidly evolving digital landscape, Asia Pacific banks should prioritize cloud adoption by investing in cloud-native, microservices-based core banking platforms. These platforms offer flexibility and scalability, allowing banks to adapt to changing market conditions and customer demands.
Investing in AI and data analytics is another strategic priority. By harnessing data to generate actionable insights, banks can improve decision-making and enhance their services.
Enhancing infrastructure visibility is essential for optimizing performance. Banks should use tools to map dependencies, identify bottlenecks, and streamline operations, ensuring efficient and effective IT management.
Focusing on talent and culture is also critical. Developing digital skills and fostering an agile, innovation-driven culture will enable banks to attract and retain the professionals needed to drive ongoing growth and transformation.
Conclusion
Asia Pacific banks must future-proof their IT infrastructure to thrive amid digital disruption. By embracing cloud, AI, and modular architectures, they can deliver agile, customer-centric services while driving sustainable business growth. This transformation involves reimagining banking, leveraging augmented core technologies, and harnessing data to create a responsive and adaptive infrastructure.
By integrating augmented core and data, banks can gain insights into customer behavior, personalize offerings, and streamline operations. This approach ensures efficiency, scalability, and superior customer experiences. Ultimately, future-proofing IT infrastructure positions banks to navigate the evolving financial landscape effectively and maintain a competitive edge.
1Frank Luong, Future of Core Banking: Trends and Transformation
2EY, How should Asia-Pacific banks push the frontiers of transformation?
3Device42, How Banks & Financial Institutions Use IT Infrastructure Visibility to Become More Resilient
4Italtel, Agility and efficiency in banking services: a tailored solution for a leading Finance Multinational
5Celent, Dimensions: Asia Pacific Retail Banking IT Pressures & Priorities in 2024
Rudy Kawmi
Rudy Kawmi oversees the Retail Banking business across the Middle East, Africa, and Asia-Pacific regions at Finastra. With a career dedicated to financial technology, Rudy has collaborated with banks on numerous digital transformation initiatives. As a proponent of innovative business models that...
