Web development for banks: budgets grow, but it is harder and harder to fight for them

The structure of the market of custom development for banks as of 2019 developed interestingly. On the one hand large IT- integrators, contractors on large-scale infrastructure projects, suppliers CORE BANKING SYSTEM ERP, BPMS and other corporate systems. These are the companies which are traditionally entering different lists of TOP 100 on revenue and number of employees.

On the other hand — the web developer closing tasks of development of applied applications, microservices, frontend-solutions. These are not the biggest commands. Today they are attracted on development of the user services which became the key instrument of competitive struggle in the market of banking services. As a result this part of outsourcing market for banks began to grow considerably in recent years — both on investment volume, and on growth of developer companies which of a web prodakshenov were transformed to IT developer of a full stroke.

Web development is one of components of development of digital bank

This material is devoted to a segment of web development. The author communicated to representatives of such companies to understand how outsourcing from the point of view of web integrators develops. In a conversation the companies with large projects for banks took part in a portfolio: .defa, AIC, SimbirSoft, Globus and 65apps.

Investments into web services grew by 2.5 times for 2 years and continue to grow

The race of digital services forces banks to strengthen investments into IT. As a result IT budgets grow, in proportion to them investments and into web solutions grow.

It should be taken into account the fact that budgets on development of solutions for banks at us grew and earlier year by year, but rates of the last two years really accelerated. In digits it is about 2.5 times of rather previous two-year period. The most important, except purchase of specialists and UX/CX competences from us began to buy also our examination — knowledge of how to start or transform business to Digital, - Evgeny Efanov, the head of practice "Finance and Marketplaces" of AIC says

Growth of budgets is also connected with active application by banks of web solutions for internal processes — the corporate portals integrated into internal circuits of automation. Banks actively go to development of such solutions as the existing internal interfaces considerably became outdated, and web development allows to arrange flexibly a system under behavior of the internal user.

Also experts note that web development is one of components of development of digital bank in general, and in this process customers started reorganization of an IT paradigm that also leads to sharp increase in expenses.

Budgets jumped up including because some banks conduct global reorganization of the IT infrastructures. From the old IT platform there is at best a core, all the rest is built on again using web solutions and microservices — so the product becomes cheaper and more flexible. As a result, if to look at our contracts, for the last 2 years project budgets raised at least by 3-4 times - it is only due to expansion of a pool of problems of development, - Nikolay Shatalov, the commercial director of.defa adds

The mobile segment grows too, but does not become the basic

The huge pool of problems of daily transactions (daily banking) almost completely went to the smartphone. So, for example, analysts of Markswebb in the research Internet Banking Rank 2019^[1] note migration of users of Internet banks towards mobile banks. Nevertheless, in a web there is a functionality of digital office (digital office) which address for difficult financial transactions and document flow.

Certainly, the popularity of mobile applications grows, but budgets on them in the general expense structure on IT can be insignificant.

Sberbank only in 2019 played contracts of custom development on a web for the amounts more than 2 billion rubles whereas an annual framework on Mobile averages 200-250 million rubles a year, - Pavel Korotky, CEO Globus notes

At the same time the volume of requirements to contractors among whom examination in bank processes is especially appreciated constantly grows in the mobayl.

Customers from the banking sector not just give the order for development, and conduct interviews with developers, find out the level of competences of each of them — requirements are very high. Work with bank are a work with the big company. Therefore the developer should have an experience, skill of work with big to the companies, understanding of their specifics, internal processes, - Alexey Chuvashov, the technical director 65apps considers

Segmentation of audience via interfaces is a part of organic development of digital ecosystems in which all types of access find application in certain user scenarios.

Outstaffing for gain of commands, and outsourcing — only with bank examination

IT departments of large banks became the centers a high tech examination and the largest employers for IT specialists long ago. Large banks, as a rule, develop key functionality of the products, sometimes temporarily strengthening commands using specialists on an autstaffa.

It occurs because banks form strong project office and the product team capable to be in the lead projects in the company, and external resources cover those gaps which do not pay off, proceeding from HR processes of banks — Evgeny Efanov explains. - Often in a command of bank examination of UX/CX designers is attracted, mobile and web developer — it is cheaper to take these competences outside on a project basis, than to develop in bank

In respect of architectural concepts banks move towards the isolated entities and microservices. As it was already noted, some banks are at a stage of reorganization of IT departments, trying to obtain bigger flexibility, getting rid of unnecessary examinations that opens doors for outsourcers and allows to transfer outside development of decisions without risk for all infrastructure.

But disappeared to receive the development contract of client solutions for bank simpler as the structure of requirements to outsourcers considerably became complicated.

30% of our clients from the financial industry ask from us strategic vision of their product, a risk matrix and design of cross-platform CJM (Customer Journey Map, the card of a client way - a comment of TAdviser) for understanding of the consumer from all directions" — Evgeny Efanov tells

In addition to requirements to knowledge of product development banks state a request for understanding of a project strategy, demand from contractors of respect for consistency of a brand and understanding of communication strategy of bank.

Growth of requirements has a talk also the accumulated experience of interaction with outsourcers which not always positive.

Banks aim to provide high quality of a product and at the same time to reduce time-to-market. Many banks "burned" earlier, having selected developers with insufficient examination, and now became more exacting. Regarding building tools, de facto the following tools became the standard in creation of banking applications: native development – for mobile applications, Java and.Net – for a backend, React and Angular – for a frontend, - Dmitry Peterson, SimbirSoft says

Successfully to compete for projects in banks, outsourcers need to invest more in own examinations. Here it is not enough to pump over a technology stack, it is necessary to have the corresponding software-skily and understanding of internal processes of bank. In this sense outsourcers began to compete with internal IT departments of banks more.

There was an interesting situation when inner technology patterns of banks can not always speak with own business one language while outsourcers often have the sufficient trained empathy to understand painful points and to turn this understanding into project solutions. Therefore sometimes the bank agrees to attract the outsourcer even on that task which would prefer to give to the programmers earlier, - Nikolay Shatalov, the commercial director of.defa notes

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All speakers meet that banks give very different experience to small outsourcers. But at the same time in the market of web development on an outsource there are generally those companies which could train for a new profession from web studios in web integrators and full-fledged IT developer ready invest constantly in own development. Only this way the companies can compete successfully with each other and also with internal IT commands of banks.

To such companies there is more and more attention and from large IT integrators which are ready to buy and resell watch of web developer already on the projects.

The banking sector as of 2019 is business, too heterogeneous on structure, which cannot be scratched all alike even in respect of technology development. All banks select unique ways of development, constantly generate hypotheses which become new services. It means what interesting work for web developer in the bank industry will be becomes only more.

Author Pavel Ovchinnikov

Notes