FlexFinance Lending - "Component-based solution generates added value for loan processing"
Ready-made standard software packages (“buy”) always have to be adapted to the bank’s structure. In development projects, however, functions are often developed (“make”) which are already available on the market. There is a third option that helps to achieve the objectives, e.g. process optimisation, short project times and investment security by combining the advantages of both strategies. FERNBACH calls this model “buy AND make”.
The integration of new functions or partial processes into standard software is often more complex than expected. Particularly the connection of customer databases often presents a challenge, but changes and enhancements of the standard software’s scope of functions often include major efforts and can cause problems with regard to release upgrades. Quality assurance for “customised standard software” is time-consuming. Price and time advantages are lost if the standard software has to be changed. This makes these projects as complex and time-consuming as individual project solutions. The actual value added of a standard solution is thus lost.
Component-based solutions are offered on the market as an alternative to so-called “out of the box” software solutions. The idea of this “component kit” is to close gaps by using existing functions and data as far as possible. The component kit approach was developed more than 20 years ago. This approach can only be applied by all banks and providers if processes are standardised from both a technical and business perspective. The principles of SOA (service-oriented architecture) should be used as the technical basis to enable seamless integration into the existing system landscape and to adapt the IT more flexibly to the business processes. New business processes can be introduced and existing ones adapted during ongoing operation thanks to seamless transfer of existing (and established) services and their data without migration. In this context, SOA does not only work as a technical but also as a business paradigm. SOA thus requires clearly-defined structures on a business level to map the business projects to the technical environment.
BIAN (www.bian.org) provides a business service model which will cover the complete banking business as an industry standard. This approach significantly increases the possibilities to exchange services which in turn increases agility. The purchase of existing and proven components (“buy”) and orchestration with existing services (“make”) on the basis of structured and standardised approaches (SOA and BIAN) enables the integration of individual functions and processes during on-going operation and avoids big bang scenarios in a project. “Buy and make” is an innovation model which will succeed due to the short time to market and immediate ROI.
FlexFinance® Lending provides the component kit for all functions, process parts and object structures for managing various lending transactions. It is integrated using a workflow management system. The modular structure allows individual applications, which have been adapted to a bank's requirements for layout, process flow, data set, functional scope etc., to be combined.
