The Market and the Trend
The financial sector experiences a radical change at the moment: low interest rates put pressure on the income; at the same time the effort to meet the legal and regulatory demands (compliance) increases. Online providers, some from different sectors with high digital affinity become agile, sharp competitors, both in banking and insurance sectors.
This digitalization actually lies within the nature of things, as products of banks and insurance companies are of non-objective nature and therefore suitable for digital distribution channels. Therefore, banks and insurance companies invested in computer technology at an early stage.
Today the IT from the 70s and 80s turned up to be a burden, as the financial and insurance products themselves change through the digital channels, especially through mobile technology.Customers expect products that respond adaptively to new usage situations. Banks and insurance companies need to react fast not to fall behind, as they are part of a competition, where providers without the technical and organizational burden from the past have a clear advantage.
This mechanism directly affects the IT and financial sectors: Agile Software Development with high flexibility and short implementation time from the planning to going live is the need of the hour. And if the modernization of the IT becomes a permanent task, it needs to be cost effective. Resources from the Cloud with low fixed costs become increasingly important for this particular reason – of course, always paired up with extremely high security requirements.
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