Digitalization of banks. TAdviser 2024 review

The Russian bank the sphere, without exaggeration, is one of the most technological in the world, and the share of digital services in it is very high. The departure of foreign vendors in 2022, in fact, turned the market upside down, since IT infrastructure Russian banks it was built mainly on foreign hardware and. software Banks began to study the market, choose and test Russian analogues, and one of the key trends in the market became. import substitution According to the players, the market changed in 2023, what factors influence it today and what challenges vendors and banks have to face - in a new review. TAdviser

Although the course on import substitution of IT in the banking sector was taken a few years ago, the migration process reached an active phase and became the determining factor in the development of the financial sector in 2023. During this period, according to analysts at the consulting company Kept, the share of foreign software in banks decreased to 50% (in 2020 - 85%). High dependence on foreign technologies in the past revealed the potential for the formation of sectoral digital sovereignty and the development of domestic industry solutions.

If throughout 2022 banks entered into service contracts for technical support of the existing IT infrastructure, were engaged in the development of anti-crisis strategies, stocked up on equipment, then in 2023 the largest amount of IT management efforts was devoted to import substitution of critical information infrastructure in systemically important banks. The business was already moving according to clearly defined plans and developed strategies, and the share of Russian products in the IT landscape was growing.

Today, the volume of Russian IT systems used by domestic banks reaches a level of 60% to 90%. However, it is too early to talk about the completion of all migration processes. Quite a lot of projects are being implemented on the market to switch to Russian solutions, train employees, and implement experimental developments.

It was import substitution that became the main industry trend in 2023. Thus, Register of Russian Software in 2023, more than 110 were among the new specialized solutions for industry problems in the field of financial activities and the banking sector, and more than 70 for six months of 2024. In addition, the import substitution trend over the past year and a half has been shifting from the introduction of special tools in the field of replacement of large application software, including, etc ERP DBMS. Import substitution in the largest banks with their own IT expertise and a wide product line is characterized by its own features: like IT companies, they began to form approaches to automating development processes and the continuous production of technological solutions, - comments Artem Karanovich, Head of the Digital Vendor Department consulting(Note Holding). T1

If in the first half of the year the banking sector studied the market of Russian solutions, choosing suitable options for import substitution, primarily related to information security and critical infrastructure, then already in the second half of 2023 we observed a significant demand for corporate data storage, which remains now. The companies are switching from Oracle, Teradata and Exadata to Greenplum. Following the changes in QCD, banks are also updating BI systems by introducing Visiology, Forsyth and other applied products, says Stanislav Shlishevsky, head of financial sector at Jet Infosystems.

But as market participants note, not all Western solutions introduced earlier are subject to import substitution. A significant part of them is still used today. At the same time, the operation and small development are carried out in-house by the internal teams of banks, which have accumulated enough competencies to implement such tasks.

The results of 2023 for banks in terms of digitalization seem ambiguous. On the one hand, general trends for digitalization and automation of processes continue to be strengthened and supported by regulators. Increasingly ambitious tasks are being set in terms of capital management, liquidity, automation of credit processes within banks, which invariably leads to the development and application of more and more new solutions. On the other hand, more and more companies are beginning to understand that the departure of Western software is for a long time, and today there are either no alternative solutions in some areas or there are, but very "raw." Therefore, seeing on the horizon the fundamental task of complete import substitution, everyone understands that it will not be easy. Last year, the import substitution trend was still taking shape. The market will fully establish itself on the horizon of a couple of years, when available solutions are stabilized, their maturity and business focus will increase, - said the Ekaterina Prokhorova head of the business development directorate. IBS

According to the expert, unlike some other sectors, the bank's IT landscape cannot be called the most import-dependent. Since 2014, banks have been working to replace Western software and their circuit has been replaced by about 60%. Large systemically important banks not only implement import substitution projects, but also offer the market the best practices and products that have been tested from the inside.

Information and cybersecurity have become important areas for banking digitalization in the face of increased threats and risks. Banks focused on ensuring stability and security due to the increase in DDoS attacks and the shutdown of international payment systems. They have invested in new data protection technologies and strategies to ensure the security of digital operations. Regulatory requirements also exerted their influence. For example, the law "On the Security of Critical Information Infrastructure" actually predetermined the course towards the technological independence of the sector.

In addition, the trend towards the development of cloud technologies, contactless payment systems and microservice architecture has intensified in the banking industry. Special attention should be paid to the formation of intelligent channels of interaction with B2C- and B2B clients, the development of personalization of offers and services based on big data, as well as the intensive introduction of artificial intelligence technologies in various business areas. Large banks are actively developing and implementing ML-models, and the range of their use has rapidly expanded - from the tasks of optimizing internal processes to assessing risks and attracting customers.

Artificial intelligence became one of the main technological trends of 2023 and influenced the transformation of the banking sector. Every year, Russian banks invest tens of billions of rubles in technology, and today the financial sector is undoubtedly the leader among other industries in the number of AI-based solutions implemented, "said Dmitry Grednikov, Deputy General Director for Technological Development T1 Innotekh.

The introduction of AI technologies is actively promoted by the Central Bank and major market players. Some banks in 2023 allocated significant funds to create centers of competence and research in this area, generate business cases, services and investigate security issues. According to experts, this trend will only develop, becoming a competitive advantage in bringing services to the market and a tool to increase the efficiency of internal processes.

In 2023, financial institutions showed special attention to mobile applications and Internet banking in order to improve the functionality of their digital platforms. Banks focused on customer experience, offering consumers new services. As a result, this has become one of the key factors in increasing competitiveness. Over the past two years, more than 200 new solutions from major domestic players have appeared in the Register of Russian Software.

Banks have followed the path of self-development of software, for example, they create solutions for remote customer service, mobile applications and much more. In the transition to domestic solutions, many advantages were found - lower cost, many opportunities to build and manage the security system, influence the quality of development, - comments Ruslan Gainanov, founder of TEAM FORCE Alliance, Open Source Development Fund and IT SMEs.

In 2023, banks continued to implement projects to digitalize business and services, following previously outlined strategies. The pace of digitalization can be assessed as high. I would highlight the following areas: increasing the priority of using SBP, developing and digitalizing the portfolio of non-credit products. Of the internal processes, banks pay great attention to the development of DevSecOps, the introduction of AI into banking processes, data management, "said Vyacheslav Alekseev, Development Director of IT ONE (Fintech).

As for the volume and dynamics of the market, according to the Central Bank of the Russian Federation, in 2023 the share of digital financial services for individuals increased to 83.4%, and for business increased to 80.2%. This was largely due to the active creation of conditions for the development and introduction of new technologies in banks. The departure of foreign vendors, of course, slowed down some initiatives a little for two to three months in 2022, but the general trend in the development of financial products has not changed. In this regard, the need of the financial sector for IT has increased "squared." On the one hand, IT solutions must meet the growing needs of the business, on the other, they must ensure the technological sovereignty of banks.

Despite the sanctions and the departure of foreign companies, the volume of the banking digitalization market in Russia continued to grow. This growth is due to the need to modernize infrastructure, switch to domestic solutions and the introduction of new technologies. The growth rate in 2023 can be described as moderately high. Banks actively invested in digitalization in order to maintain competitiveness and offer customers high-quality and modern services. The introduction of domestic solutions and partnership with Asian countries made it possible to compensate for the departure of Western vendors. In general, despite the challenges, the market continued to develop. These trends and dynamics testify to the high flexibility and ability of the Russian banking sector to adapt to new conditions, which lays the foundation for further sustainable development, - said, Stanislav Shilov Director of Product Development, Center for Digital Solutions for the Company's Business. BSS

The new ranking of the largest IT suppliers in banks, prepared by TAdviser for the corresponding revenue for 2023, includes 70 companies. The leader was again the company T1 with a result of 168.4 billion rubles, an increase of 126.4%.

The top five also included Softline, Jet Infosystems, Rubytech and VS Lab company.

The total revenue of all participants in the rating amounted to almost 323 billion rubles.

In the new ranking, some participants revealed the forecast of their revenue from IT projects in banks, which companies plan to receive by the end of 2024. More...

In an additional rating, TAdviser collected Russian vendors of various IT products that are used in banks. Among the vendors who disclosed the proceeds from IT projects in banks based on their own solutions, BSS became the leader. The total revenue of all participants in this rating exceeded 11.6 billion rubles.

In 2024, financial institutions took a general course towards the digitalization of all possible services, both client and internal use-oriented. The strategy of expanding the functionality of existing user products, their deeper integration into various interbank and state systems, comes to the fore. For example, increasing the functionality of user interaction through the SBP and integrating various State Public services services into RBS applications.

There is a further evolution of mobile applications and online banking. We are developing more functional and convenient mobile applications for users, introducing innovative solutions for remote customer service.

From the point of view of technology, the tough position of the regulator and the restrictions associated with sanctions remain. At the same time, the market structure continues to change greatly. If in 2022-2023 many banks did not accept the new reality or tried to wait out the crisis, now the rules are clear, and these are new realities in which financial organizations should live.

The business is trying to balance and look for options. Some banks, in addition to the middle and premium client segments, began to work with the lower segment and offer more risky products, for example, microfinance. Cross-border payments remain in focus and the topic is becoming increasingly urgent. It seems that we are close to using not only digital financial assets (CFA), but also cryptocurrencies to ensure the possibility of mutual settlements. Banks as a whole are ready, I think that by the end of the year we will already see working options, - comments Alexey Lebedev, Head of Financial Sector, Reksoft Group.

By 2024, the financial sector, especially large organizations, managed to significantly increase technological expertise and increase the "maturity" of the IT landscape. Banks are still focused on fulfilling the requirements of the decree on the use of domestic software at CII facilities by 2025. However, new promising areas also appear that require careful preparation of the banking infrastructure: the introduction of the digital ruble, the development of the CFA segment and the formation of a new payment structure, including the widespread use of cross-border transfers, says Dmitry Grednikov, Deputy General Director for Technological Development T1 Innotekh.

The level of competition in the banking market is growing, which means that the struggle continues for the quality of customer service and the breadth of supply, which pushes banks to build ecosystems. For example, this year, in addition to traditional financial and digital services, interest in the construction of banking virtual mobile operators (MVNO) is developing.

In addition, banks try to minimize human participation in routine tasks (data collection, support, document management, etc.), thereby increasing efficiency and reducing costs. These changes set the vector of initiatives to digitalize the sector: banks are looking towards hyperautomatization and robotization, and also actively continue to introduce artificial intelligence technologies into business processes.

The efforts of the companies are still aimed at reducing costs while maintaining the quality of service, which stimulates an increase in interest in AI and the continuation of work in terms of independent channels and robotization. All these factors stimulate interest in infrastructure and integration components, low-code tools, as a means for rapid development and adaptation in a dynamically changing architecture, "says Maxim Nartov, Business Development Director at Nexign.

The number of scenarios for using AI to automate banking processes and banking software development processes is significantly increasing. The effectiveness of artificial intelligence tools and the adaptation of banking processes to the use of AI is constantly increasing. The scope of machine learning is developing, work is underway to create a special infrastructure Data Science, which allows you to more efficiently and quickly develop ML models, test hypotheses, and use AutoML to organize the development pipeline. In particular, large language models (LLMs) are increasingly used, which already solve the problems of not only automating the first line of call centers support, but are also used to speed up work with documents.

Now banks are actively creating an infrastructure for processing the digital ruble, finalizing their systems for analyzing customer data using Machine Learning tools, actively introducing biometric data processing and integration with a single biometric system (EBS). All these initiatives are part of the overall trend towards the formation of technological independence of the Russian financial sector, "says Dmitry Podmokov, business development manager in the financial sector of Jet Infosystems.

The use of cloud technologies to solve various problems of banking automation, requiring significant computing power and the possibility of flexible scaling, is also growing.

The tendency to abandon foreign software continues - licenses for foreign vendors' products expire, pilot projects with Russian developers are being completed. In parallel, ties with suppliers from China and other Asian countries are strengthening, cooperation with local IT companies is growing. In addition, since banks are subjects of critical information infrastructure, the period of transition to domestic software and hardware established by the government is suitable for them.

Investments by Russian companies that are in a hurry to implement import substitution plans greatly accelerate the dynamics of the development of products of Russian vendors. Most domestic developments are still lagging behind Western ones in terms of reliability and functionality, but they have every opportunity for rapid progress. Nevertheless, representatives of banks fear that they will not have time to fully fulfill the requirements of regulators by early 2025. Indeed, a complete "re-assembly" of the IT environment requires both time and maturity and reliability of the software products that vendors are working on, - comments Stanislav Shlishevsky, Head of Financial Sector at Jet Infosystems.

All large banks implement a strategy of technological sovereignty, in which they develop their own solutions that replace vendor ones. To develop the digital product range, banks create their own platforms on which they can develop, as well as create various products both by the internal divisions of banks and by third-party contractors, says Sergey Tikhomirov Kastis, First Deputy General Director (). Custis

Another continuing trend in the market is the strengthening of cybersecurity and compliance measures in the face of growing threats. On the one hand, FSTEC has tightened the requirements for certification of CII, on the other hand, the number of attacks on Russian companies, including banks, has been growing over the past two years in order to violate business processes and steal data.

The focus remains on safety and the fight against frode, including under the influence of regulators. This affects not only classical cybersecurity, but also questions about integration with government systems. In a broader sense, changes in regulation are one of the factors in the development of IT systems and the emergence of new opportunities for market participants, "said Maxim Nartov, Business Development Director at Nexign.

A serious trend affecting the industry is the growing need for IT specialists. The labor market is overheated and a number of companies are reviewing their personnel policy - some are forced to regularly raise the wage fund to preserve and expand the team, others are turning to alternative tools such as smartstaffing. Personnel shortages are increasingly solved by attracting external competencies in outstaff mode.

The TAdviser analytical center has prepared a new card "Digitalization of Banks," on which IT companies developing products for the digitalization of financial processes noted. More...

From the point of view of digitalization, banks are now actively adapting to difficult and rapidly changing market conditions and regulatory requirements, trying to reduce the resource intensity of work by any means.

First of all, banks are interested in optimizing internal processes, speeding up the decision-making process, expanding points of contact with the client, embedding financial services in the client path and simplifying the use of financial products. A range of import substitution tasks is added to this list, which affects the entire IT landscape - from software to hardware. The banking sector has an understanding that the transition to domestic software is an excellent chance to restore order inside.

Priorities and requests from banks have changed. On the one hand, this is due to the requirements of the regulator, changes in financial policy in the country. On the other hand, business tasks come to the fore: banks are looking for new sources of income, niches, launch new products and services. Since if they are only engaged in fulfilling the requirements of regulators, and not think about business development, they will have nothing to wait for in the future, "said Alexander Shibaev, CEO of IW GROUP.

Banks are prioritized by the already existing standard functionality in connection with the emerging new business opportunities to increase their profit on such positions as credit and deposit operations, international payments of exporters and importers, foreign exchange operations, risk control and analytics, in particular, the definition of groups of related borrowers, - comments Yuri Teryokhin, Director of Financial Institutions at Ai-FORCE, FORS GROUP.

From the point of view of interaction between IT partners and banks, there is a request for forms of cooperation, which, on the one hand, are aimed at developing banks' own applications within the framework of the concept of technological sovereignty, on the other, allow IT departments to integrate ready-made contractor teams into their project activities.

There is more focus on solutions that are profitable and the use of internal resources, there is less experimentation in terms of innovation and risk investments. To this, you can add an improvement in customer experience by developing and updating mobile applications - ensuring the convenience and functionality of mobile banking, introducing new features and improving the interface. There is also an active use of chatbots, improving the quality and speed of service, the introduction of omnichannel strategies for interacting with customers.

Customer orientation is the traditional approach of banks. However, now a lot of work is carried out by financial organizations to work with "non-clients." Currently, services for them have seriously expanded. For example, payment for goods using the Fast Payments System (FPS) through terminals served by a third-party bank. Various crowdfunding services are also actively developing, for example, collecting money for a gift to a colleague or cashless tip services. A "non-client" of a bank can easily and quickly repay interest on loans, in fact being a third party. In addition, the financial industry is actively developing the direction of children's banking, building a long-term business development strategy with young "non-clients," expecting that they will continue to use the bank's services and products as they grow older, "adds Viktor Frolov, director of business development at Yuztech Group of Companies.

Another serious area of ​ ​ work of banks is the creation of their own contactless payment systems. Thus, the trend of import substitution concerns not only its own infrastructure, but also niche client services.

We see requests to improve the functionality and usability of client applications, as well as mobile portals for employees. Modern frameworks bring user experience to a new level of convenience and speed. In addition, services of expanded support for platforms of vendors that have left the market, as well as open source systems, are in demand. Safe exploitation and verification of new versions for vulnerabilities, the introduction of DevSecOps practices, strengthening information security functions are an important priority for banks today, "said Svetlana Markova, chief consultant at Neoflex.

Banks also focus on sustainability and autonomy - looking to minimise reliance on external suppliers and ensure the sustainability of their operations, be more flexible and adaptive. This makes it possible to quickly implement changes in the regulatory framework and economic environment. There is a constant search for new technologies and solutions to improve competitiveness.

There is a clear tendency for Russian banks to develop their own expertise, for this they form their own large IT divisions, which are increasingly the owners of their software solutions. Despite this trend, banks are willing to attract external IT companies for point optimization of processes, since each change quickly gives a financial effect and allows you to solve certain problems, but there is not always enough ″ ″ in internal IT departments, "says Stanislav Shlishevsky, Head of Financial Sector" Jet Infosystems. "

Another important priority is the security of information and products used. Banks are trying to pay special attention to systems that allow them to protect customer information from fraudsters and hackers who use more and more new technologies every day. Banking participants continue to actively introduce artificial intelligence and machine learning at various stages: from internal services to communication with customers. A lot of attention is paid to the development of infrastructure for new instruments emerging in the financial market.

Environmental and social initiatives are becoming increasingly important. ESG practices imply the introduction of environmentally sustainable and socially responsible practices, the development of "green" financial products. And social responsibility is participation in social projects, support for small and medium-sized businesses, - said Stanislav Shilov, Product Development Director, BSS Center for Digital Business Solutions.

All these priorities and requests reflect the desire of Russian banks to remain competitive in the face of a changing external environment and quickly adapt to new challenges.

In addition to key information security systems, ABS and solutions for processing on an import-substituted stack, today everything related to working with data is in focus: business analytics, platform and data storage. In addition, AI-based services or systems containing AI components are becoming more and more in demand. For example, the technology is used to speed up decision-making in the lending process and select the most suitable bank product.

In the field of improving the culture of working with and benefiting from data, financial companies are actively interested in Russian solutions of the Data-Governance class. Even the most conservative banks and adherents of Open-Source solutions have begun migrating to domestic DBMS, such as Arenadata.

There is also a demand for Russian CRM systems, solutions for credit conveyors and scoring tools. Financial sector companies are also selecting solutions to replace the SAS product line and analytical systems.

Today, domestic banks are comprehensively updating the IT infrastructure and are focused on replacing a number of software products, such as MS Active Directory. This is the basic software from which the construction of a sovereign technological landscape begins. In addition, we are seeing a significant increase in interest in domestic operating systems and infrastructure software, as well as information security tools. At the same time, there are a number of solutions that need to be implemented in the first place. In particular, one of the key tricks of fintech is the development of a domestic automated banking system (ABS). Of course, it is worth noting that today a new ABS standard is being formed on the market: decentralized microservice systems are replacing traditional solutions on a monolithic architecture, - comments Dmitry Grednikov, Deputy General Director for Technological Development T1 Innotekh.

At the moment, we see a need to rebuild credit pipelines, decision-making systems, build corporate data warehouses, and integrate collected AI models into current banking processes. Also, taking into account the growth in the number of projects and the share of internal development, project management systems, analogues of Jira/Youtrack, are critical, "said Vasily Kuts, director of industry solutions in the financial sector K2 Tech.

If we talk about software, then the most in demand are OS and databases, office software, desktop virtualization, general virtualization.

Now in most segments there are already completely Russian solutions, as there are large transactions. The main difficulty lies in the very process of switching to domestic products, when banks, on the one hand, must fully support the work of the current foreign software, on the other, gradually introduce new ones, train staff, etc. And all this without violating business processes, - says Andrey Toloknov, director of business development, "Basis."

According to experts from R-Style Softlab, in the banking sector, systems for exchanging information with GIS are most in demand. Such automation accelerates all processes in the direction of work with legal entities, individual entrepreneurs and with individual clients. For example, modules for interaction between banks, insurance and financial companies with the state platform "Digital Profile" allow financial institutions to organize work with the client without additional request for documents, optimize the verification of client information, and maintain the relevance of these information.

Thanks to this, banks can receive such client data as information on VAT, USN, licenses, average number of employees and others. At the same time, obtaining information from the "Digital Profile" is possible only with the consent of the responsible person of the organization, which is stored in a single register of digital consents.

Data management systems are no less in demand, which help banks effectively process and analyze customer data. Solutions video conferencings have become very important in holding online meetings or when working remotely. Systems are also critical. cyber security

In the coming years, all platforms will also be in demand for building software development processes by their own IT teams of banks, as well as services for creating dedicated development centers according to the outstaffing model with the further transfer of the team to the customer's staff. At the same time, both expert-level specialists and coordinated teams will be needed to comprehensively solve business problems.

{{quote 'As before, banks are focused on creating a financial marketplace and a single window for customers. This requires operational refinement of remote banking systems, data collection and enrichment, as well as their rapid analytics. To improve the quality of interaction with the client, large language models are being introduced and trained, teams of specialized specialists have already been formed in a number of large banks, - comments Dmitry Podmokov, business development manager in the financial sector of Jet Infosystems. }}

According to forecasts of the company "I-FORCE" (FORS GROUP), the revenue of specialized software companies will remain at the level of 2023, it may be slightly higher for manufacturers of PACS, system software and information security tools.

In T1, Innotech notes that according [1] to market estimates, banks' IT expenses grow by about 15% annually and by the end of 2024 this dynamics will not change.

We are confident in the continuation of the positive dynamics that we have seen over the past few decades. The needs of the banking industry are large, players are developing, the number of automation tasks is growing. New external factors constantly appear that affect internal banking activities: regulator, legislation, sanctions restrictions, etc. Therefore, the forecast here is only positive from the point of view of automation, - agrees Alexander Shibaev, CEO of IW GROUP.

NOTA MODUS also expects positive dynamics in the development of the banking sector thanks to the launch of projects to import substitution of services for critical IT infrastructure.

The organic development and transformation of the banking business will continue in accordance with the general changes in the country's economy. The growth rate of the industry is likely to not be ahead and, according to the forecasts of the Ministry of Economic Development, the potential share of the financial market will remain stable by 2025, about 7% in the GDP structure, - said Alexey Ledenev, director of the expertise department of the CRM platform NOTA MODUS.

I think most banks, like last year, will show positive dynamics and profit growth. Retail portfolios are growing, the variety and demand for banking products is increasing. Regulators and the state stimulate the main sectors of the economy and large corporations to grow products and stabilize domestic markets, strengthen ties with partners from friendly countries, and the market of corporate borrowers is also growing, "said Ekaterina Prokhorova, head of the IBS Business Development Directorate.

At the end of the year, Reksoft expects an acceleration of import substitution in terms of significant objects of the critical information infrastructure - ZOKII. Banks will continue to restructure their portfolio, look for new revenue opportunities and develop new customer segments. According to Alexei Lebedev, head of the financial sector department of the Reksoft group, by the end of the year banks will already be able to offer the market the possibility of cross-border payments based on cryptocurrencies.

R-Style Softlab experts predict market stabilization in the field of import substitution, a more conscious launch of existing systems on a new stack of software and equipment. This activity will allow you to revise solution architectures and create new products. State support and subsidy programs for developers of domestic technologies will play the role of an additional incentive for banks in adapting to new conditions.

The growth of investments in domestic IT solutions is predicted, which will allow creating more competitive digital products, increasing their functionality and reliability. This applies, among other things, to developments in the field of cybersecurity, data analytics and risk management systems. Accordingly, increasing demand, financing, improving the quality and functionality of domestic IT solutions will lead to a reduction in the gap between Russian and foreign technologies. This will make the transition to Russian solutions less painful for banks, - comments Vasily Kuts, director of industry solutions in the financial sector of K2Tekh.

The widespread introduction of the digital ruble for settlements can also have a significant impact on the market.

The difficulties of banks are largely due to the need to quickly replace the very voluminous IT landscape, which in some organizations has been formed over the years. This requires an extremely significant amount of resources - both financial and human resources - especially while maintaining the principle of seamless implementation of changes.

One of the key problems is the lack of worthy alternatives to foreign solutions in certain software segments. Other minor factors are a large number of new players with insufficiently mature IT products, as well as the reluctance of the customers themselves to quickly change the usual paradigms. As a result, with a formal availability of a large range of domestic solutions, the search for a product that meets all the requirements, for example, for building an IT infrastructure, can be long and difficult.

Banks lack confidence that the result of the introduction of a particular product will coincide with their expectations and they will not have to increase the budget to solve emerging problems due to the immaturity of the proposed solutions. At the same time, restrictions and strict requirements on the part of the regulator remain. In such a situation, import substitution requires an integrated balanced approach, which will include business and technological consulting, audit, comprehensive assessment of possible risks and IT solutions. Also, the problem was ensuring the compatibility of new domestic solutions with existing systems. Many banks have previously used sophisticated and highly integrated systems, and replacing them with domestic counterparts requires significant integration and adaptation efforts. In addition to implementing a new solution or platform, you need to spend a lot of time on onboarding employees, since the interface and functionality of the systems are different.

The financial sector has a complex technology landscape, with dozens and hundreds of IT systems based on infrastructure platforms where almost everything is deployed on virtualization, centralized management, orchestration, and automation. You can replace individual systems and achieve short-term success, but such solutions cannot be scaled to hundreds of IT systems. Therefore, many organizations have begun to create fully import-replaced infrastructure platforms.

At the technology level, the problems are cyclical. On the one hand, it is necessary to make a profit here and now, so you often want to continue to raise technical debt. On the other hand, the accumulation of technical debt leads to an increase in the timing of the implementation of any changes. The topic of import substitution adds fuel to the fire. Imagine the amount of investment in platforms based on software from foreign vendors. And now they need to be promptly imported. You have to look for a balance. Large companies write their own platforms, and then bring them to the market - look, for example, at Platform V from Sberbank. Not every company even the top 50 can afford to develop such a platform. But to use it is quite. Especially, realizing that it was made by one of the largest and most advanced Russian companies, and the platform will be developed and supported for many years, - comments Mikhail Kuznetsov, Commercial Director of iFellow.

According to market participants, representatives of the financial sector for many years were one of the most advanced users of all advanced foreign solutions, the first tested technologies and landed them in their IT landscape. Therefore, today banks have very high requirements for the functionality of all classes of solutions: they do not have enough basic capabilities and that the solution simply works. All IT products offered for implementation should have rich functionality in terms of administration, management, data orchestration and monitoring, as well as be fail-safe and disaster-proof, and consistently withstand high loads.

This has created certain difficulties for Russian manufacturers of IT solutions and system integrators, which they are now striving to overcome. They have to continuously and urgently refine solutions taking into account the comments of customers, include their requirements in product development roadmaps. It is important to take into account that no one has ever tested or tested the performance and compatibility of solutions under high loads, and most of the most complex integrations have yet to be implemented. However, there are also indisputable advantages: the difficulties that arise now will become an invaluable experience for IT specialists who will implement such projects in the future, "says Nikolai Kozhevnikov, director of the department for working with a key customer in the banking sector, Rubytech.

There are still areas where it is extremely problematic and risky to replace foreign solutions - these are large Oracle and Microsoft SQL databases consisting of key banking systems, storage area networks, tape libraries, highly reliable storage systems.

Top banks face colossal sanctions pressure. It turns out to be both investment products and retail banking. Therefore, recently, approaches such as Backend-Driven UI or Server Driven UI have been increasingly used. A new approach to the development of user interfaces and applications allows you to implement new functionality of systems without reissuing front-end applications. Thus, this makes it possible to update application data less often. However, this approach to the development of interfaces imposes new, more stringent requirements on the usability of these interfaces, - comments Viktor Frolov, Director of Business Development, Yuztech Group of Companies.

To solve the problem in terms of using domestic software, banks together with vendors conduct programs for joint implementation, testing and optimization of used software products. In terms of resource support, external resource providers are actively involved, internship and training programs are organized, including joint with universities and vocational training services. Banks pay great attention to creating the image of a modern high-tech employer with an effective corporate culture and a comfortable atmosphere, often becoming leaders and trendsetters in this direction, "says Vyacheslav Alekseev, Development Director of IT ONE (Fintech).

The shortage of highly qualified experts who are able to ensure the operability of existing developments remains another major problem for the financial sector. According to the hh.ru portal, in 2023 the demand for specialists at the middle and senior levels increased by 18%. In the current conditions, companies "grow" specialists inside - this allows us to partially solve the personnel issue. The business also seeks to create the most comfortable working conditions, expands the social package and offers benefits and privileges.

Over the past few years, many have lived in wait-and-see mode, there has been a fairly stable IT landscape, and there are not many large IT projects. Now the problem of a shortage of professional managers and IT personnel has become acute. The wait-and-see attitude has led to some sort of washout of managers in favor of other industries. Therefore, at the moment, the personnel shortage is concentrated around the competencies associated with the management of large IT projects, - said Sergey Tikhomirov, First Deputy General Director of Castis (CUSTIS).

If you look globally, then the shortage of IT specialists is obvious both on "traditional" technology stacks and on more modern ones. To solve this problem, training clusters are reformatted, and sometimes created from scratch. For example, a number of banks have created their own departments and courses in higher educational institutions in order to immediately train specialized specialists, "says Dmitry Podmokov, business development manager in the financial sector of Jet Infosystems.

Alexey Lebedev, Head of Financial Sector at Reksoft Group, notes that the industry's transition to the widespread use of artificial intelligence in IT processes and the delegation of software development and testing tasks from specialists to smart services should partly help overcome the shortage of personnel.

The problem both for the market as a whole and for banks in particular is information security issues. Banks have always paid increased attention to information security risks and cyber resistance, often acting as early followers of various technologies and new approaches. That is why they found themselves in the most difficult situation: together with unprecedented pressure from intruders, they had to quickly rebuild their IT and information security landscapes against the backdrop of changing regulatory requirements.

We can say that banks have become key participants in the IB- and IT-revolution. And many of them passed these tests with dignity. Now the situation is leveling off: high-quality alternatives to foreign solutions appear, a new examination is being formed, integration experience is accumulating. Of course, we are still far from the final stage, nevertheless, the experience and results gained at this stage are interesting both inside and outside the Russian market, which allows us to look to the future with optimism, "said Dmitry Pudov, Deputy General Director of NGR Softlab.

Banks are experiencing difficulties in integrating Russian information security solutions into already formed IT infrastructures. Moreover, one of the most problematic areas is network security. Now the market has a wide selection of new generation domestic firewalls (NGFW). In general, their functionality meets the requirements of the market, but almost all solutions have problems in terms of equipment performance and stability.

The situation is also complicated by the fact that the transition to new cybersecurity systems increases the risks of vulnerabilities and cyber attacks. Banks are obliged to constantly engage in strengthening cybersecurity measures and developing new strategies for data protection.

Among the next challenges that can significantly affect the current situation is a change in processes within the framework of AI, as well as the decision of the US Treasury to limit a number of IT services, which will enter into force on September 12.

This decision, in fact, prohibiting the support and response to any requests for automation of enterprises of the Russian Federation, will still come back to us, but how exactly this will develop in practice, we will understand in September. Therefore, starting from the 4th quarter, the vector of actions aimed at automation may change, and we will be forced to upstage the implementation of applied business tasks, - comments Alexander Shibaev, CEO of IW GROUP.

Stanislav Shilov, Product Development Director of the BSS Center for Digital Business Solutions, draws attention to the growing gap between digital leaders (TOP-10 banks and banks associated with bigtech companies) and other market participants.

In the most extreme scenario, in the coming years, it can lead to irreversible degradation of the business of a significant share of banks, which reduces the possibility of investment in digital development and leads to further compression of the business, the expert believes.

Market participants expect that next year, as in the next few years, the trend for import substitution and the implementation of new regulatory norms in this part will continue. There will be a gradual replacement of PACS and DBMS used by banks - by 2025, companies should switch to domestic software, and by 2030 - to Russian PACS.

However, judging by the current costs of import substitution and adopted laws, large banks will also switch to domestic DBMS in transaction systems by 2030, in analytical systems - by 2027, - comments Yuri Teryokhin, director of financial institutions at Ai-FORCE, FORS GROUP.

Digital currencies and CFAs will be used more widely. The field of application of neural networks will also expand - especially for typical credit-deposit and trading operations. Artificial intelligence will remain one of the key drivers of fintech development in the long term. In the coming years, the search for AI capabilities and their piloting in the application plane of the financial sector will continue. Predictive analytics and chatbots remain among the most sought-after AI developments. A notable trend of last year, which is now gaining momentum and will remain the focus of the industry in the coming years, has become hyperpersonalization: AI helps to customize the main processes and recommended offers individually for each client.

The volume of data is increasing at a significant rate - and this trend will also continue. Therefore, banks are now actively investing in technologies that help simplify work with accumulated and new information: natural language processing, predictive systems and technologies for building complex analytics. Among them are graph neural networks, optimizers and crypto enclaves. Under these conditions, fintech will continue to develop machine learning pipelines (MLOps), standardize the tools of AI commands.

AI will significantly increase performance in operational management and automation of routine tasks. At the same time, it will expand the capabilities of employees and open new mechanisms in terms of interaction with the client. Hyperpersonalization of AI-based services and offers, flexible pricing will allow you to divide customers into narrower segments and create the most relevant offers for almost every individual client. In the near future, you can also expect an increase in the number of interactions in the digital world, and not only between people, but also devices. The number of AI agents and mutual settlements between them will increase - small transactions with minimal human intervention, - predicts Alexey Lebedev, head of financial sector at Reksoft Group.

We are now witnessing another, I will not be afraid of this word, revolution related to artificial intelligence. Technological capacities allow for more and more complex models, with the cycle of new products, each of which is an order of magnitude better than the previous one, moving from years to months. On the other hand, in pursuit of hype, we see that announcements and point demonstrations are significantly ahead of the introduction of products. This applies to all areas of life - from new smartphone features to business systems for the banking industry. The practice is dangerous - after all, it gives rise to incorrect management of expectations. Let's see where this leads, - comments Mikhail Kuznetsov, commercial director of iFellow.

In 2024-2025, we expect an aggravation of the competition between the leading financial institutions of Russia in the field of using AI to improve customer experience. This will inevitably lead to an increase in investment in this area. Moreover, we predict that this trend will spread to the entire market, forcing even small banks to actively introduce AI technologies and increase their relevant competencies. Technological independence and artificial intelligence will be key factors determining the competitiveness of financial institutions in the near future. It will be extremely difficult for banks that cannot adapt to these trends to maintain their positions in the market, "said Dmitry Chernyaev, head of the financial organizations sector at LANIT-Integration (part of the LANIT group).

Banks already use various virtual digital assistants who send clients offers about financial services, answer simple questions, remind about bonuses and discounts. On the one hand, such systems will reduce the cost of serving their customers, on the other hand, they will further increase the convenience of using digital technologies for the consumer of banking services.

We expect that the banking sector will continue to digitize more and more communications with customers, which will allow, among other things, using neural networks to provide more relevant products, significantly increase the level of service and that the most important thing for the bank is to understand its client base and its potential with a high degree of accuracy. To survive and build up the client base, banks need to work ahead of schedule, not wait for the client's need to arise, but learn to predict it. In general, over the next few years, the use of modern information technologies in the banking sector will be more and more active. This is a logical and predictable process, - notes Vasily Kuts, director of industry solutions in the financial sector of K2Tekh.

The degree of sector automation, penetration into the processes of increasingly advanced ML models and infrastructure stabilization after adaptation to import-substituted technologies will continue to increase. Banks will continue to create data platforms and service ecosystems, strive to occupy new niches, provide more services, and create the opportunity for their customers to solve a wide range of problems in one application.

There is also a consolidation of banks not only in terms of a large number of mergers and acquisitions, but also in the technological aspect - for example, the introduction of an open banking standard, the creation of joint solutions and other activities. One example is the joint initiative of Sberbank and T-Bank to combat fraud and protect customers. Trends indicate that the future of the banking industry will be characterized by technological advances, working together with the regulator and an increased focus on sustainability and social impact.

Castis (CUSTIS) expects a longer-term cooperative relationship between banks and contractors in the future, including an expansion of interaction formats that hybridize extreme forms of cooperation, such as custom development and lease of resources in outstaffing format.

The software development market in various segments will be enlarged due to the merger of players and the acquisition of small companies by large companies. In the future of several years, several players will remain in each segment, who can be called national champions and who will provide mature domestic solutions to the same banks, - said Andrei Toloknov, director of business development at Basis.

According to Dmitry Pudov, Deputy General Director of NGR Softlab, 2024-2026 will be the peak of the rapid growth of the IT landscape. This is due to the duration of the product cycle in the B2B- and B2G segments. In the future, the market will become more equilibrium: a stable competitive environment will be formed in product niches, segmentation will occur, many manufacturers will move from the stage of scaling to the stage of management in the product life cycle, where more attention will be paid to systemic development.

{{quote "A booming market forgives many mistakes and allows you not to think about efficiency, so at a certain point you will have to work on errors or'pay off debts'. It will be time for mergers and acquisitions, where not venture capital investment prevails, but a mature pragmatic approach. This will allow the most efficient and large players to strengthen their positions, including through access to the capital market. Moreover, such a development of events does not mean that the market will become inert, rather, it will become more mature and predictable. I am sure that new bright names await us, - says the expert. }}

R-Style Softlab predicts integration into the market of Asia, Africa and the new BRICS member countries, which will entail an increase in new solutions for automating business processes of banks and acceleration of international and domestic settlements.

The most current trends in the banking sector, according to most market participants, are the introduction of artificial intelligence elements into business processes, information security, the use of open technology stacks and close attention to the sustainability of critical IT infrastructure. Import substitution of solutions used by banks and ensuring complete independence from foreign products will remain an urgent direction in the next few years.

With the expansion of the scope of AI use, attention to issues of its regulation is also increasing. Therefore, companies will be forced to focus more on compliance and data security.

Experts also highlight such trends as:
1. Development of own platforms in large banks, development of ecosystems and expansion of services covered by them.
2. Increasing the volume and importance of digital channels of interaction between clients and the bank. Large banks will try to pull up to the level of omnichannel digital communication with clients of industry leaders.
3. Solving the problem of updating banking applications, switching to the web and increasing the volume of web development.
4. Working with data and more tightly integrating Big Data into the business for management decisions. 5. Introduction of biometric technologies.
6. Use of digital currencies and CFAs. They are actively promoted by both the regulator and the global situation, forcing banks to look for reliable and risk-free settlement methods.
7. Improving banking services for end users. Including the use of artificial intelligence tools.

In addition, one of the promising areas is the expansion of the line of financial products and services for customers using modern API development and management platforms that ensure reliable operation and high speed of launching new products. Open APIs as they are widely used, first by large players, and then by the entire market, will make it possible to quickly create new digital products for end users.

Among the most popular technologies in this sector will remain no-code. Platforms based on it open up new opportunities for banks: accelerated creation of services and products, reduction in development and support costs. This direction will certainly continue its development. The transition from traditional banking platforms to multifunctional digital ecosystems is a topic that is actively discussed among IT specialists and, in particular, fintech. Expanding the platform's functionality, on the one hand, seems to be a logical step in business digitalization. On the other hand, such changes entail risks associated with a decrease in control over key business processes and relationships with partners. To minimize the latter, specialized IT systems for managing these relationships may be required, - comments Maxim Nartov, Director of Business Development at Nexign.

All these trends and directions will determine the development of the banking sector in the coming years, contributing to improving efficiency, improving customer experience and creating new business models.

According to the TAdviser project database, as of October 2024, among the various classes of IT solutions in the companies of the Russian financial sector, the most in demand are systems electronic document management EDMS(/),ECM business analytics (), BI customer relations () CRM and remote banking. These solutions account for the largest number of projects completed during the observation period since 2005. Data on other classes of systems are shown in the diagram below.

For each class of IT systems implemented in certain industries, the TAdviser database allows you to identify the most popular solutions and vendors of these products. See the chart below for which companies are developing the systems most commonly implemented in the financial sector.

Some of the current challenges for fintech are related to the political situation, tightening sanctions, strengthening their control, including among counterparties in friendly countries, which affects the speed, quality, safety of service provision and receipt of services. It should be noted that banks remain dependent on Western software and hardware. Of course, work is underway to replace them, but this will take years.

In light of the development of new technologies and the rapid growth of AI activities, issues related to cyber risks and security should not be overlooked. These are also issues on the agenda that require careful research, study and implementation in all production processes of banks.

The directions of development of the banking digitalization market will change depending on how the external and internal situations will develop, but the progress itself will continue constantly. The market is waiting for the further evolutionary development of Russian solutions and increased work to ensure the stability and safety of their work.

The main technological trends have not changed for the past 5 years, and at the forefront is still the expansion of the fields of application of artificial intelligence and machine learning, working with big data, building up digital channels through which banks provide services to users - this is integration with third-party systems, and the creation of miniapps, and the development of web interfaces. Thus, we can talk about the widespread use by banks of the omnichannel strategy.