2024/08/15 10:42:42

Market map "Digitalization of banks 2024"

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.

The new infographic covered about 300 companies - developers and integrators of IT solutions for the digitalization of the main banking processes.

Four functional areas of the bank's activities are marked on the map:

Products and Services,
Sales and service in channels,
Risk Management and Reporting,
Business support.

Separate blocks highlight developers of solutions for building automated banking systems (core-banking) and for working with data, as well as IT service providers, suppliers of systems for managing IT services and information security companies whose solutions are used by banks.

Bank digitalization map. Click to enlarge

When preparing the new map, we relied on the TAdviser knowledge base, which contains information about more than 7 thousand. IT projects in financial institutions.

The card partners were four IT companies with wide experience in the implementation of projects for the banking sector: LANCOFT (LDM), BSS, Castis and T1 .

At the request of TAdviser, the experts of these companies shared their views on the peculiarities of digitalization of banks in Russia.

On priority areas of digitalization of banks

Sergey Tikhomirov, First Deputy General Director of Castis:

Currently, one of the key areas of development for banks is the transition to a digital format of interaction with customers of all categories. As a rule, they create for this not just separate solutions, but form a common digital communication space and develop platforms and product ecosystems, where the entire client path and client experience are the subject of digitalization. We see that in this area Russian banks are one of the leaders on the world stage.

Andrey Gulidin, Deputy General Director, Director for Business Development T1 Innotekh:

Today, domestic banks are primarily focused on import substitution of software, comprehensive updating of the IT infrastructure and automation of operational and business processes to increase their efficiency. At the same time, it is important to make all changes seamless and invisible to the user of financial services.

There is an increasing focus on AI-based hyperpersonalization: the technology helps make customer interaction more efficient with 'smart' assistants and advanced recommendation services. The financial sector is constantly growing the volume of data, so organizations are investing in technologies to work with them: predictive systems and solutions for building complex analytics, processing natural language. Fintech will continue to develop machine learning pipelines (MLOps), standardize the tools of AI commands.

Konstantin Fedorov, LDM Platform Product Development Manager (LANSOFT):

In the realities of 2024, digitalization processes are largely related to import substitution processes and often take place in parallel, complementing each other. For example, the process of replacing Western enterprise content management solutions (Filenet, Documentum, SharePoint) goes hand in hand with the transition from paper to digital.

A striking example of such priority digitalization is the transition to the Electronic Client Dossier, the management of which, one might say, is the foundation of banking activities. An important role in this process is played by the active position of regulators (Order of the Federal Tax Service of Russia of 17.09.2021 No. ED-7-2/816 @ and YeD-7-2/817, Bank of Russia Regulation No. 440-P of 06.11.2014), which oblige banks to provide copies of documents exclusively in electronic form.

The same trend supports the growth of initially electronic documents by more than 25% year-on-year (according to SKB Kontur).

Stanislav Shilov, Product Development Director of the BSS Center for Digital Business Solutions:

In the field of digitalization of banks in the Russian Federation, one of the main priority areas is state initiatives and regulation. We see how the Bank of Russia is putting a lot of effort into piloting the digital ruble. Actively researches and implements it, which is a unique direction in the digitalization of the banking system. And in general, within the framework of the Digital Economy of the Russian Federation program, we see efforts to stimulate banks to develop digital services and innovations.

Another important area is related to the activities of the NSPK and the development of the fast payment system (FPS), which, under sanctions and restrictions, ensure independence from international payment systems.

The direction of security and data protection remains relevant. On the one hand, this is expressed in import substitution in the field of IT solutions and the development of its own systems and platforms, which is associated with the departure of foreign vendors under the pressure of sanctions. On the other hand, we are seeing increased attention to cybersecurity and customer data protection amid the development of digitalization and increasing cybercrime.

The fintech sector cannot be ignored either. Fintech startups offering new financial services and technologies are actively developing in Russia. And many banks are actively collaborating with fintech companies to introduce new technologies and improve customer experience.

The trend towards personalization and client experience is becoming important, everything is gaining momentum. We see how banks are actively introducing the personalization of offers to their customers, striving to provide the most relevant products and services. This is facilitated by the introduction of biometric technologies for customer authentication, which is designed to improve the usability of banking services.

Of course, the key priorities of digitalization of banks remain business tasks. These are reducing costs, speeding up business processes, increasing sales, improving customer experience. But here the priorities vary greatly from bank to bank, so it is difficult to identify a clear gradation.

On import substitution of foreign IT solutions in banks

Sergey Tikhomirov, First Deputy General Director of Castis:

In accordance with the requirements of the Central Bank of the Russian Federation until 2025, all banks need to replace systems related to payments and settlements. In large banks, this functionality is usually contained inside the ABS. Therefore, they do not replace the entire systems, but specific functional blocks related to calculations, often enclosed in different systems. All this leads to the need to make changes to the architecture and redistribute functions between different systems. That is why banks that have chosen for themselves the path of the modular architecture of the IT landscape are now in a more favorable situation.

When implementing such complex projects, we observe two different approaches. In the first case, import substitution is carried out through the interaction of banks with product vendors. In the second, the modules related to settlements are replaced with their own solutions, which are created by banks independently or in partnership with contractors.

Andrey Gulidin, Deputy General Director, Director for Business Development T1 Innotekh:

Difficulties remain with replacing some highly specialized solutions. One of the priority areas in the financial sector at the moment is the creation of a domestic automated banking system (ABS). Traditional solutions on a monolithic architecture will be replaced by microservice solutions that will form a new standard for banking systems. The market also has a lot of work to do to replace the equipment and create analogues of Oracle and Microsoft solutions, the dependence on which was quite serious.

Konstantin Fedorov, LDM Product Development Manager:

Most systems in the banking industry have historically been built on Western solutions. This is valid for all key banking systems of ABS, CRM, ERP, BPM, ECM/CSP.

Banks have already gone a long way and have largely replaced the system and application software that was presented in the bank in the largest number (OS, office solutions, antiviruses, etc.).

At the moment, the focus is mixing towards banking systems. The urgent task is to replace ERP and ECM systems, various archives based on them. Although this process is quite complex, it can be divided into stages, and the market offers quite mature competitive solutions: 1C, Galaxy, LDM and others.

The most difficult call is the replacement of ABS. For large banks, this is the task of the next 3-5 years. Current systems, even developed in the Russian Federation, often rely on Western technologies (for example, Oracle DBMS), or so far cannot provide a proposal commensurate with large banks.

Stanislav Shilov, Product Development Director of the BSS Center for Digital Business Solutions:

Import substitution processes in Russian banks have both their successes and challenges. The main difficulties are associated with the need to develop high-quality analogues of foreign solutions, as well as the need for large investments and qualified personnel. However, in general, the direction is actively supported at the state level and becomes a priority for many banks.

Leading Russian banks are developing and implementing their own IT solutions to replace foreign counterparts. National platforms and systems, such as the National Payment Card System (NSPK) and the Fast Payment System (FPS), have helped reduce dependence on international suppliers. Their further development is a guarantee of our sovereignty.

Given the current geopolitical situation, banks are increasing investments in the development and implementation of domestic software products and solutions. Increased attention is paid to the development of data centers and cloud services, which are based on Russian technologies. Banks actively cooperate with local IT companies and startups, which contributes to the development of an ecosystem of domestic technological solutions. Move to open standards and technologies, such as open-source solutions, which helps speed up the import substitution process and reduce dependence on foreign suppliers. Invest in the training of IT specialists to maintain a high level of competence in Russian banks. Leading universities and educational centers are involved in cooperation with banks to train the necessary personnel.

If we talk about which of the IT solutions are the most difficult to replace in banks, then it should be borne in mind that this picture is quite mosaic - both for different banks (someone has already made significant progress, someone has not even started), and for different classes of solutions. If we talk in general, then the picture of import substitution of applied software is good, first of all, because banks have used mainly domestic solutions before. It is worse in the field of system software and, in particular, hardware solutions. The key difficulties at first were the lack of ready-made solutions (but the industry was able to cope with this), now the main challenge is the scale and complexity of such projects and the need to implement them without stopping the main business-critical digitalization projects.

You can download the map in high resolution using the link.

Applications for the printed version of the card can be sent to the editor@tadviser.ru address. Free delivery is carried out in Moscow to the heads of IT divisions of banks. It is also possible to purchase a card.

The new map of the Russian information technology market is the 16th TAdviser product from this series. Previously prepared:

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