Symbiosis strategy in banking: A smarter path to digital transformation

Rethinking the core banking strategy in a digital world

Traditional ‘rip-and-replace’ methods to digital transformation are risky and impractical. This method involves a complete overhaul of a bank's core system and legacy infrastructure, all at once.  

Possible downtimes, data migration challenges and customer service disruptions are just a few of the problems that could arise if this method is undertaken. We’ve discussed the potential pitfalls of this ‘rip-and-replace’ approach, as well as how you can minimize disruption and optimize performance in the process. Watch the webinar here.

To optimize their existing infrastructure, banks need an alternative that reduces operational disruption associated with full-system replacements. At the same time, the pressure to accelerate their digital banking transformation strategy grows as customers continue to demand speedier, more innovative and seamless banking experiences.

This is where modern banking strategies that deliver agility and reduce large-scale disruptions emerge. Symbiosis offers banks an attractive solution: instead of replacing existing core banking systems, banks can deploy next-gen core banking systems alongside them.

What is symbiosis in banking and finance?

The concept of symbiosis in banking and finance refers to the collaborative relationship between legacy infrastructure and next-generation systems, where both operate simultaneously to drive digital transformation.

This strategic approach aligns closely with agile transformation in banking, empowering banks to modernize step-by-step.

A core banking strategy underpinned by coexistence

Ideally, a bank doesn’t replace its core infrastructure overnight, but rather deploys a next-gen core banking platform alongside its existing system. For example, a bank might first modernize its lending segment, implementing advanced functionality without overhauling its entire operation.

This approach prioritizes business-first innovation, minimizes data migration challenges, and reduces risk while allowing financial institutions to quickly reap the benefits of modern core banking systems. What’s more, embracing this coexistence is not only sustainable but also more efficient. By enabling real-time operability between platforms, banks can achieve a more agile and resilient transformation journey.  

Finastra supports this approach through our open and agile core banking solutions, providing banks with the tools to evolve without excessive interruption. Our Essence solution uniquely combines rich, broad and deep banking functionality with advanced technology.

A modular approach to symbiosis deployment

Symbiosis also presents the opportunity for modular deployment, a smarter, customer-centric approach. Instead of a complete overhaul, banks can adopt next-gen core banking capabilities in key business areas like lending or payments. This approach allows customers to choose what they need, when they need it, while aligning transformation efforts without the hindrance of technical bottlenecks. This built-in flexibility enhances service and product delivery and reduces the time it takes to launch to market.

Finastra supports this approach through our next-gen core banking solutions, which drive integration across ecosystems.

Deploying a next-gen core alongside existing core banking systems supports rapid innovation within a cost-effective strategy. Financial institutions can run a vertical or horizontal part of their business on a next-gen cloud-based core without deploying a complete migration.  

Our article ‘Symbiosis: Innovation without compromise’ explores exactly how financial institutions can deliver transformation through a symbiosis strategy, with a clear focus on enhancing customer satisfaction and ROI.

Empowering the organization: From IT burden to business enablement

Beyond infrastructure, the symbiosis banking and finance model fosters organizational transformation. It encourages collaboration between IT and wider business teams, offering an opportunity to break down silos and adopt a more unified digital state-of-mind. The success of this unification also relies on the right tools: open APIs, cloud-native architecture and robust ecosystem partnerships.

Open APIs allow business units to access and use banking services without entirely depending on IT teams to develop bespoke solutions. Breaking down this barrier drives participation from other business teams in product innovation and agile transformation in banking. Cloud-native platforms support the deployment and scaling of solutions more rapidly. For IT teams, this reduces the burden of maintaining monolithic legacy platforms. For business leaders, they can respond to customer and market demands in a more agile manner. When it comes to supporting robust ecosystem partnerships, the relationship between banks, fintechs and other vendors will allow banks to leverage pre-integrated platforms and solutions.  

Measuring the progress of collaborative symbiosis involves tracking speed, complexity reduction and business value. As the World Economic Forum highlights:

“While technology will be the linchpin of innovation to a greater degree than in the past, not all innovation will be tech-enabled. True innovation involves reimagination and applying ingenuity to transform all aspects of a business, from operating models to processes, workflows and more.” 

Evolve with confidence through symbiosis

Through coexistence models like symbiosis, banks can modernize with confidence and achieve agility and innovation without compromising stability.

Symbiosis represents a strategic path forward, empowering banks to modernize their tech without full-scale overhauls. Through balanced symbiosis, it also places them on a level playing field with fintechs and other industry competitors.

With decades of experience, we understand that valuable progress comes from strategic evolution. Our next-gen core banking solutions place banks in the driver’s seat, with full control over their transformation strategy. Talk to us about your digital future.