Think…and while you are at it, think Bank-in-a-Box (BIAB). The bank is devising ways to spruce up efficiency and enhance their competitive edge through various means; perhaps a new product or service, but constrained by the legacy systems that are not up to it. And the bad news is that budgets are tight. The good news is that modernizing core systems to achieve these goals is now possible. And at an affordable cost.

Bank-in-a-Box has been created with pre-configured parameterization, process definition and built-in templates. Installation is quick and cost-effective. A boon for the segment 3, tier 3 and tier 4 banks, functioning on small budgets and stringent timelines minus the demands for customization.

When used with support services such as systems integration, hardware setup, networking and security, Business Process Outsourcing and consulting, this combination BIAB provides ‘plug and play’ core systems execution for fresh market operations or green field operations. The bank needs to obtain a license and the IT affiliate renders consultation and complete execution services right from generating the business model, designing market policy to developing channel infrastructure and handling standard compliances.

With all this, the costs may still seem out of wallet for smaller banks, credit unions and co-operatives. What is needed is a core systems model wherein the cost figures as an operating expenditure for these banks instead of an in-your-face expense explosion. Technology vendors hear you and have come up with an array of flexible payment options for core systems renewal:

Pay-as-you-go: This model calls for segment 3 and other small banks to come together and invest in a solution that reduces each one’s expenditure. The IT provider looks after the required infrastructure and gives core banking solution (CBS) as a hosted service. This is chargeable on grounds of usefulness, number of sites or users, distribution span etc.

Application Service Provider (ASP)-based: Here, the core systems provider hosts applications at the data centre of Hosted Service Provider. Banks can choose their services and pay just for that.

Software-as-a-Service (SaaS): Delivery on demand. This model does well with modules such as CRM, HR, Accounting GL.; software used once in a while.

Core Banking Solution on a Cloud: The bank along with the technology vendor collectively decides what applications are to be hosted outside – in a ‘cloud’ – for consequent sharing with other users. The bank is kept out of the actual hosting but testing, developing, training and data recovery modules do get to make visits to the cloud. The cost here is spread amongst multiple banks based on usage; this model is practical for segment 3-tier 3 and tier 4 banks.