Original text here from Patrice Bernard (LinkedIn)
When traditional banks shy away from modernizing their core banking systems due to the complexity and extreme risks associated with such projects, the British startup Monese boldly shifts to its in-house solution, only three years after its previous migration. This move stands as a testament to the importance of flexibility.
Monese had its reasons for replacing its IT infrastructure, especially since this was the second time it undertook such a task in its eight-year history. Back in 2020, Monese had adopted Thought Machine's solution to support its transformation from a payment account provider for foreign residents to a universal neo-bank with an expanded range of services (though it still officially holds the status of an electronic payment institution).
Since then, Monese has established XYB, a subsidiary focused on marketing its self-developed technology to the rest of the industry, better aligning it with its needs while utilizing some components from its partner. A core module is integral to this offering, and Monese is now implementing this component as part of a strategic move towards rationalization and strategic coherence.
While these developments might seem mundane, what should capture the attention of traditional financial institution leaders is Monese's ability to seamlessly transition from one system to another, without drama and without committing extensive resources (given its limited means). Some may argue that Monese's small operational scope is the key to this agility, dismissing the possibility of drawing inspiration from its approach.
However, overlooking Monese's example too quickly would be a mistake. The real differentiator lies in its inherently modular architecture. True to its theoretical benefits, this architecture allows Monese to add, remove, or swap out features as needed, adapting to its own evolution and that of its customers.
One might question the relevance of changing a proven core banking system for a stable entity, as opposed to a rapidly growing startup. The finance sector is evolving more than we realize, as illustrated by XYB's multi-asset support logic, accommodating any currency or valuable asset. Moreover, technical advancements in performance, reliability, and energy efficiency cannot be ignored, not to mention the need for skills available in the job market, at least for maintenance purposes.
Furthermore, adapting to different uses, like the shift to online services and their accompanying challenges, is crucial. Monese's initiative may not sway the more cautious, traditional banks to undertake the colossal task of abandoning their platforms. However, it exemplifies, on its scale, the tangible value of a flexible information system at all levels, which should be a primary goal for banks worldwide. Could this mark a step towards reevaluation in the banking sector?
Subscribe to our newsletter:
