Modern banks offer standardized products hard-coded with specific rules and benefits. A lot of back-end operational roles are required to support these products and to manage the rules governing them. Today, a variety of these activities are being automated using technology, while employee roles are shifting toward product development. Instead of deciding on mortgage approvals and evaluating credit risks, operations staff will work with automated systems to enable banks to offer its customers flexible and customized services. For example, a digital loan-closing and fulfillment system, will speed the process and give customers the flexibility and freedom to view and sign documents online or on their mobile apps.  

However, leveraging technology has its challenges as it keeps changing at a very faced pace. What is new technology today could become obsolete in 2 years. Therefore, banks need to optimize their technology spend in a sustainable manner, whether it is modernizing their application landscape or creating immersive customer experiences, it has to be driven by application managed services (AMS). 

NextGen Application Managed Services 

In the complex technology environment, AMS is a simple solution to manage and support a bank’s applications portfolio. Typical AMS solutions are a comprehensive package of support, maintenance, change, and build services. These services are delivered for all types of applications (like COTS or SaaS portfolios, banking and financial services specific solutions or custom-built applications) and technologies (like legacy platforms, cloud-native applications or enterprise technologies). AMS also give organizations the flexibility to plan resource staffing to meet seasonal peaks and valleys. The benefits of a managed service model like AMS include:  

  • Operations integrated quality management and continuous process improvement 
  • Efficient management of applications and infrastructures 
  • Predictable costs for services 
  • Protection of mission-critical operations 

Recommended Read: How to Build Tomorrow’s Bank: The Way Forward with Next-Gen Digital Banking

Why Embrace Application Managed Services 

It is extremely vital for a bank that the banking applications work as expected and not be the cause for an interruption in work or loss to customers. Not only do banks need to maintain the trust of their customers by meeting their expectations in terms of reliability, but they must also constantly iterate and improve the applications to stay abreast with changing technology and customer expectations. Relying on an AMS provider to maintain applications saves the overhead cost of a full-time IT team support. The AMS provider provides a team with individuals who are each specialized in a different suite of apps, programming languages and have the database expertise to manage the applications. This team can also be scaled up or down as needed ensuring there is no excess or shortage of resources. A recent study shows that companies using AMS can yield a decent 50% to 75% savings over a period of five years. 

Outsourcing AMS 

The decision of choosing between in-house IT and outsourced IT, needs to be made based on the complete understanding of the core applications. There is no ‘one solution fits all’ offer with technology. What works best for some applications may not be suitable for some other applications. Therefore, a correct balance between in-house IT and outsourced AMS provider must be found. For example, if the in-house IT capabilities are occupied on tasks as simple as helpdesk support, then outsourcing those tasks into the hands of a trusted IT services partner can free up those in-house resources. The AMS provider will relieve the in-house IT team of unnecessary pressures.  

Just think about all the tasks that go on behind the scenes to maintain an app. Now multiply that several times, as almost all banks use multiple applications. This would put a lot of pressure on the in-house team and also make it difficult for internal teams to constantly maintain the security and overall stability of the applications for a smooth and efficient practice.  

Whether a large bank or a neo/challenger bank, the cost of maintaining an efficient IT team is huge and may eat into the growth of the business. Then, if in the midst of all these a vital team member quits, finding a replacement with the set of skills capable of handling that role is not going to be easy. Considering an AMS provider can help businesses avoid such sticky situations. 

Application Managed Services is not just a cost-effective solution to maintain an environment, but provides an organization the freedom needed to focus on growing its core business or introducing new tech-enabled solutions. Trying to go for AMS alone can be challenging, but partnering with an experienced and trusted AMS provider like Aspire systems maximizes any bank’s valuable technology investments. 

Recommended Read: Digital Banking Reimagined: Neobanks vs Challenger Banks

Latest posts by Shuvro S. Sarkar (see all)