Red Hat transforms banking with groundbreaking software solutions

Banks can cope with disruption through Red Hat's cost effective solutions.

With over 25 years of expertise in providing open source software solutions, Red Hat is the partner of choice for Asia’s top financial services industry (FSI) players when it comes to building a reliable digital banking platform. “Non-traditional banking players are blending and co-opting banking services through different routes. The problem space that we are addressing for existing financial institutions is to help them rebuild and modernise their existing core banking system,” explains Benjamin Henshall, General Manager, South East Asia, Red Hat.

Over the past few years, Red Hat has been at the forefront of helping banks accelerate their strategy of becoming a digital native in the marketplace. Its innovative open source solutions have helped banks such as DBS to expand in places like India and Indonesia, where the bank offers more of its digital-only services. “We help banks like DBS take software practices and new architectures and tools which otherwise they wouldn’t have gotten from other IT vendors,” Henshall explains.

Optimising existing processes
Red Hat helps banks accelerate their transformation journeys with how their people, process, technology, policies and culture come together to essentially deliver applications and services in a much faster lane and continuous secure way. When working with its partners, Red Hat recognises that banks have decades of software code database built on long-standing hardware and networking infrastructure that is not easily changeable and upgradeable.

“Any IT person, CIO, or business leader in a traditional bank who is trying to get a new project delivered knows full well the pains of delivering it on time or in a low-cost, reliable way because the IT systems are usually architected in a brittle, fragile, highly interdependent, highly coupled way,” Henshall notes. “Red Hat provides the ability and helps banks modernise their IT systems, typically front, middle and back office banking systems, through the model of an open-source multi-cloud architecture.”

Another important aspect of digital transformation is an organisation’s people, process, technology, policies, and culture. “Red Hat has a really unique and distinct way of bringing those five elements together to make a meaningful change within a bank or division to accelerate how those things come together to become a high performing software development team. How people actually work together to develop, post, test, and release software is a complex task. Red Hat brings those five elements together to make meaningful change within an organisation so that they can continue right behavioural changes, the right learning and the right culture in a much faster way, or what we call open innovation,” he says.

Dealing with disruption
Traditional banks are coming under pressure from the rise of new entrants in the market. Growing margins and staying profitable are becoming harder as the barriers to entry are lowered, and non-traditional banking companies such as Grab, Alipay and Ascend Money redefine what constitutes a bank or banking service.

“If you don't have the right software architecture, tools and practices in place, and if you don’t know the desired product and customer experience, then having a virtual banking licence is effectively going to render you useless because virtual banking is all about being a digital native, and a digital native is effectively all about mastering the delivery of software,” he explains.

Making banking a lifestyle requires integration, interoperability, and collaboration with others. Modes of engagement need to be frictionless, least disruptive, elegant and simple, secure, legitimate and expanding. “You need to have an outstanding set of APIs (application programming interface) that is relevant, useful, and integrated into other vendors, suppliers, banks, financial services, and/or social media platforms that typical consumers utilise,” Henshall says. “The focus is more on remapping a customer journey—what do customers want to make them want to interact?—rather than forcing a customer through a banking process that is more suited to an internal practice of the bank.”

“From a Red Hat perspective, having the latest cutting edge software, open-source, cloud-native architectures and tools, and software delivery practices will enable banks to be lean, agile, fast, responsive, and scalable—which are key to sustaining the business,” he adds.