Greetings everybody!
In today’s episode, I will continue addressing the incumbent dilemma: how to deliver short-term business results and compete aggressively against new “digital-born” players.
I will refer to the financial industry segment as many professionals agree they have a complex scenario between incumbents and new players. (FinTechs)
You may revisit the previous episode by clicking on the first episode or second episode.
Let’s talk about initiatives the incumbent typically explores that is not self-centered.
As companies are getting ready with their self-centered improvement plan and becoming Digital Players, they will need to decide how to tackle new scenarios due to new customer expectations, business opportunities, or competitive digital-born players with disruptive business models.
Some of the alternatives they will explore will come with new risks.
Acquiring a new solution (siloed)
Hold your horses, Jose. Would you mind defining what a Siloed Application is in this context?
Sure, to me, a Siloed Application is such a solution that is not mapped as part of the Enterprise IT Architecture or those that cannot interchange information freely with the rest of the IT infrastructure.
Several SIs and trusted organizations recommend building new functionalities by acquiring self-contained (composable) applications that exchange information effectively via APIs.
This is a practical decision in many cases, but it is not risk-free: Having new IT assets in your IT platform increases the risk of being attacked by hackers.
This week Microsoft confirmed it was breached by a hacker group (Lapsus$) who also claimed they recently penetrated other companies like Okta and Nvidia.
A couple of recommendations:
1. It is essential to develop a new Enterprise Architecture based on real-time interaction between customers, partners, and the company in an Omnichannel environment.
2. It is important to double-check all IT Assets’ integrity due to new Digital Transformation related vulnerabilities.
As we include new assets in the IT enterprise platform, it is required to validate that only approved interactions between the company, its customers, and partners are allowed.
Hold on, Jose, all organizations have a security team responsible for ensuring that on a 24×7 basis.
Why do you see this as a new exposure?
You communicated to customers using a few channels in the past, but now social media is opening multiple new potential vulnerabilities. The new defined architecture must include ways to handle this new kind of vulnerability due to Social Media channels and composable applications using APIs (Identify, Protect, Detect, Respond, and Recover)
Any other recommendations?
One more time: testing, testing, testing. Practice makes Perfect.
Any comment on typical areas where customers (Finance) are exploring building functionalities with composable applications?
Currently, there is growing interest in the following areas:
- Enhanced Customer Relationship
- Embedded Finance
- Embedded Finance – Investment and Brokerage Products
- Embedded Finance – Insurance Products
- Bank-to-Bank Payments
- Open Banking Solutions for Corporate Banking
- Focused Point Solutions
One final comment, moving in any of these directions will require your organization to have a comprehensive Application Quality Management approach.
If this is a theme you are interested in knowing more about, please let me know; I am glad to assist.
Good enough?
Imagine three episodes to talk about one topic!
Many of the topics we will be covering in this Newsletter can be revisited many times to build additional deep knowledge, but this is not about my preferences but yours.
I appreciate your letting me know if you see value in me continue developing these topics.
Would you mind helping me with the following?
– What questions do you have for me? Feel free to add your questions and comments.
– Do you like this episode? Please click on Like. I need your feedback to validate if I am giving the correct value and find ways for continuous improvement.
Cheers,