Speed has become increasingly crucial in leasing, lending, and factoring services. What do we mean by that? Business financing providers are moving faster than ever to innovate and optimise their digital customer journey. They want to bring it to a level that better serves the current market. And that’s a good thing because we still regularly come across examples that are – to put it gently – in need of considerable improvement. Speeding up financial servicing innovations is perhaps going to be the number #1 key to success going forward.
Innovating with older IT systems is difficult, as we can tell you from experience. Trying to upgrade an old system to the latest features and functions is nearly always a long, complicated process. And it’s time most companies don’t have to spare. Their customers expect to be able to access personal information online. As well as to do everything they need to do all in one go. The time to market for a new feature is now increasingly the NUMBER ONE KPI for steering innovation projects.
How do you speed up the process of financial servicing innovations? That’s what this blog is about. We have some important considerations and tips we would like to share with you.
Fail fast but learn faster
This often-quoted concept from Gary Burnison, CEO of Korn Ferry, is very applicable to time-to-market efforts. The best way to speed an innovation process is to spend enough time at the start to define expectations in detail, and to set out the criteria that should be met for the project to be considered a success. Then, you should let your team loose to develop the best possible solution as quickly as possible. This is a better approach than operating according to a set plan of action. Step-by-step action plans are far too easy to follow mindlessly and for far too long. If at any point it becomes clear that success, as defined, isn’t going to be possible, just stop and try something else.
Shorten the customer journey with agile development
Old systems usually consist of proprietary or tailor-made software solutions. To make matters worse, customer processes are usually supported manually with Excel spreadsheets and Access databases. Innovating in this kind of IT landscape takes a lot of time, and even tiny changes can mean big investments. Updates and risky upgrades can get postponed and become enormous by the time they finally happen.
Agile development turns this idea on its head. It releases small bits of functioning software continuously instead of waiting for large and exhaustively documented updates. Agile processes are much easier and allow for new features to be introduced quickly.
The most important goal of agile development is to shorten every step of the customer journey, regardless of how small. That is the thing that makes your users happy. They have little patience for long, drawn-out, and complicated online services.
Make more possible with open API
Before there were APIs, systems communicated with each other through FTP, webservices and files. Those methods can work fine – until there’s a change in one of the systems. Getting the different systems communicating with each other again can get very costly very quickly.
The fact that maintenance is much less expensive is a decisive advantage of using APIs. You can build them both inside and outside of a system to help it communicate with other systems. Flexibility and collaboration are key.
Communication using open APIs allows each individual system to be the expert in its own area. By working together, the result is much stronger than attempting to acquire the necessary in-house knowledge and expertise to – sometimes well, sometimes poorly – build an application on your own. The collaborative flexibility of open APIs lets you use top-quality modern systems built by the best experts available instead of DIY.
Using open APIs lowers the barriers to communication between systems, simplifies integrations and saves money.
Build an innovation roadmap for now and for later
Standardised systems use roadmaps to keep track of which new features and functionality is coming and when. This helps the organisation to keep developing and ensures they are always prepared for the future.
Modern SaaS technology eliminates obstacles
Factoring companies that base their services on modern SaaS technology instead of cumbersome old IT systems have a big advantage when it comes to innovation. Digital customer processes offer a much more efficient, flexible, and intuitive way of working.
On the technical side, SaaS and the open APIs it uses offer much more flexibility for changing your service offering and for adding or replacing external systems and services. With open APIs, it’s relatively simple to switch between providers of credit scoring services, for example. Onboarding customers who use different bookkeeping systems is also much easier because there are no proprietary links that need to be built first.
And finally, there is the financial hurdle that often accompanies maintaining and updating old systems. As often is the case with financial servicing innovations, there will be some initial costs to set up a SaaS solution. How high that cost is will depend on the levels of complexity and functionality needed. However, these costs are often compensated by no longer needing to invest in hardware and software development. In addition, SaaS usually means working with systems that are continuously updated and upgraded with the latest technology.
Aptic provides the solution for modern factoring
Aptic has two types of factoring systems, one of which is SaaS. Cloudware, our digital solution for modern factoring in the cloud, is a brand-new system. It is fast, flexible, and intuitive. You can usually set up this system with a relatively small initial investment. In addition, it usually only takes 1-2 months to implement it (depending on complexity). Our ARC is an extended platform with solutions for Invoice to Cash, Lending, Leasing, Factoring, and Debt Collections. The ARC platform also offers solutions for e-commerce and POS payments.