Thought Machine: shaping the future of banking IT
Thought Machine provides cloud-native solutions for banks to deploy modern systems, with the desire to create more efficient legacy systems, platforms and technology for the foundations of next-gen banking. Its cloud-native platform, , uses flexible microservice APIs (Application Programming Interface) and is built to incorporate many of the essential services required to run a modern bank. It was founded in 2014 by former Google engineer, Paul Taylor.
The company that it had joined the Banking Industry Architecture Network (), the non-profit organisation that promotes and provides a common framework for banking. Thought Machine’s membership with the Banking Industry Architecture Network assures that its platform, Vault, is compatible with BIAN’s standards. This means for banks within BIAN’s ecosystem, integrating with Vault will be a faster and more efficient experience.
“Banks now recognise that having modern infrastructure is no longer a nice-to-have, but a prerequisite to sustaining competitive advantage.” Comments Thought Machine’s Chief Infrastructure Officer, , “We are proud to be working with BIAN on this journey to standardise and promote modern banking infrastructure through a common architectural framework. We look forward to working alongside banks, technology providers and other industry players to build best practices for the future of the banking industry.”
Through the membership, the firm has joined BIAN’s Strategic Advisory Group and is represented by Chief Infrastructure Officer, Peter Ebden. Joining besides the likes of Deloitte, Infosys and Wells Fargo, the Working Group is responsible for determining the standards that promote continuous improvement of global banking infrastructure. Furthermore, mapping out the strategic direction of BIAN.
Partnering with Thought Machine also benefits BIAN through its Coreless Banking Initiative. The aim is this will aid BIAN in reaching its goal of creating a universally compatible core banking infrastructure based on microservices technology.
“We are delighted to welcome the pioneer in core banking, Thought Machine, to the BIAN community.” Said , Executive Director at BIAN, “As they join, Thought Machine will bring their vast skills and expertise required to build and deploy Vault, which will be of immense value to the industry as we set a universal standard for modern, scalable core banking infrastructure.”
Thought Machine is a partner of our , , CTO at Atom Bank, discusses how Thought Machine has given an invaluable contribution to the bank’s digital transformation and how the company “has a pivotal role to play” in its future.
Zafin: Banking is now in the era of the tech ecosystem
The development of tech ecosystems is placing the future of post-COVID banking in jeopardy. At a time when Big Tech can replicate the functions of traditional financial institutions, what can banks do to retain a grip on the market?
John Smith, EVP Ecosystem at Zafin, has a few ideas. A SaaS cloud-native product and pricing platform for financial institutions, Zafin is preparing the next generation of banks to cope with this precise challenge.
Smith is responsible for the strategic and tactical management of the company’s ecosystem, including the creation of new business models to support growth and differentiation. We asked him four questions:
Q. Have the events of the pandemic caused an irreversible shift in the digitalisation of banks? If so, is COVID the sole cause or are there other factors?
It’s a great question and one that I am asked a lot. Without a doubt, the COVID-19 pandemic has driven a significant shift in the acceleration of digital. In fact, I’ve seen some estimates show there to have been as much as four to six years of digital adoption growth since the initial lockdown started.
While the pandemic may be the primary reason for this growth, two other drivers include fintech disruption and the high costs of operating a traditional retail bank. Both of these factors have caught the attention of banking executives as they set their minds on accelerating digital transformation with a focus on high return, low risk.
Q. Some commentators believe banks must learn from Big Tech in order to survive. Do you agree? Please expand.
I agree completely; we’re living in the era of the ‘ecosystem’. All the seismic shifts we’re seeing in technology, be it aggregation, embedded finance, DeFi or hyper-personalisation are all enabled by the foundation of an ecosystem.
When financial institutions work with a strategic partner like Zafin, which has made the strategic investments in a best-in-class ecosystem, they’re able to capitalise on opportunities more quickly and safely, and will be better positioned for growth now and at the other side of the pandemic.
Q. What are currently the obstacles to adopting Open Banking? Is it more likely to 'take off' in some regions rather than others?
I would argue that Open Banking has been in the US for some time and will only continue to grow there. By definition, Open Banking is about the secure sharing of financial information that customers are aware of and have authorised. Under that definition, we’re seeing aspects of this well underway even though its full potential remains to be seen.
Third-Party Providers are a natural outcome of Open Banking, whereby they can create propositions beyond what a bank normally does to enable banking functions such as payments, borrowing, saving and so on. Once again, some of these are already present through industry-led initiatives, whereas regions such as the EU have taken the pathway of regulation such as PSD2.
The industry-led initiatives we’ve seen in the US have also had the added advantage of guard-rails that regulatory bodies like FFIEC and CFPB provide. There are also other technology-led initiatives such as API definitions that are set out through the FS-ISAC.
I would argue the future of Open Banking in North America will be through the natural evolution of the guidelines and API definitions that have been published, as well as the natural progression of industry initiatives.
Q. Are there any other bank tech trends you'd like to discuss?
Coreless banking. Zafin has been pioneering some of the work around externalising functions out of the legacy core to drive a more ‘fintech nimble’ bank, while not having to deliver a ‘heart and lungs’ core bank replacement.
Real life examples of this include moving some of the core functions of a banking system, such as product and pricing to a platform like Zafin. Origination, onboarding, KYC, risk, and compliance are all other examples of externalising banking functions for added agility.