Data sovereignty: more than just the location of the data center

When talking about data sovereignty, they often think first of the physical location where data is stored. Data stored in a European data center is frequently considered secure and compliant. But this assumption falls short. What matters is not just where data is stored, but who can access it and under what legal framework.

How does international regulation affect digital sovereignty?

The U.S. CLOUD Act requires companies based in the United States to hand over data upon request by U.S. authorities—regardless of whether that data is stored in the U.S., Europe, or elsewhere. For European banks that use cloud services or software solutions from U.S. providers, this creates a structural conflict with the GDPR and other European data protection regulations.

Since January 2025, the DORA Regulation has further tightened the requirements for third-party risk management in the financial sector. Banks must document which third-party providers they use, where their infrastructure is operated, and the legal framework governing data processing. In addition, the EU Data Act has been fully applicable since September 2025, introducing, among other things, rules for switching between cloud providers and aiming to reduce vendor lock-in.

True data sovereignty requires a combination of technical, contractual, and organizational measures. A sovereign cloud is characterized not only by the location of the data centers but also by the ability to migrate data and applications as needed and to ensure that no unauthorized external access occurs.

Technological sovereignty: the type and origin of the tech stack matter

In addition to data-related issues, another question is coming into focus: Where do the technologies themselves come from? The risks of relying solely on non-European technology providers are manifold. They range from price increases and changes to licensing models to the denial or delay of security updates, and even politically motivated access restrictions. These risks can significantly limit freedom of action: If a provider acts restrictively when it comes to licenses or access, banks face a choice between acceptance or a costly migration.

What technological aspects strengthen digital sovereignty?

European software providers can offer an alternative here. It is crucial that the technology is not only hosted in Europe but also developed and refined there. This directly addresses the European legal framework and industry-specific requirements.

In the area of core banking systems, it is also advisable to examine the individual technological components. Proprietary interfaces, vendor-specific cloud platforms, and closed architectures exacerbate dependency effects—not only at the commercial level but also across the entire technology stack. Open standards, API-based architectures, and the use of open-source components, on the other hand, promote technological sovereignty. They enable the replacement of individual components without jeopardizing the overall system and reduce dependence on a single provider.

Operational Sovereignty: ownership structure as a strategic factor

One aspect that is often overlooked when assessing digital sovereignty concerns the ownership structure of the technology providers themselves. Whoever owns a software company determines its long-term strategic direction, investment priorities, and pricing policy. For banks that rely on a single provider’s solutions for their core processes, this issue is anything but abstract.

How do software providers’ ownership structures affect the degree of sovereignty?

In recent years, the European financial IT landscape has seen increasing consolidation. Private equity firms or large international players, often based outside Europe, are acquiring local software providers. What may bring capital and economies of scale in the short term harbors risks in the medium term: changed product strategies, the relocation of development capacities, rising license costs, or the discontinuation of product lines that do not fit into the portfolio.

For banks seeking long-term planning security and a reliable technology partner, the independence of the ownership structure is therefore a relevant selection criterion. A provider with a stable, independent, and ideally European ownership structure offers greater assurance that strategic decisions will be made in line with the interests of customers and the European market. During due diligence for potential providers, questions such as the following should therefore be addressed: Who owns the provider? How stable can these ownership structures be considered? What is the financial situation?

Key Takeaways for Digital Sovereignty in the Banking Sector

• Growing awareness: one of the top technology trends for financial service providers
• A process, not a condition: gradual improvement as an appropriate goal
• Synergy of measures: implementing data sovereignty technically, regulatorily, and organizationally
• “Looking under the hood”: examining individual components and development processes of software solutions for technological sovereignty
• Know the technology partners’ stakeholders: identifying ownership structures and deriving their implications

 

BANCOS, an independent European software provider based in Berlin, has been developing core banking and automation solutions for banks and fintech companies since 1988. Learn more online here and contact us if you would like a personalized consultation.

Christian Binderbauer (on photo center) will take over the position of CEO. He has many years of professional experience as a consultant and expert in the financial industry and technology (most recently at Google Cloud). In Christian, G&H is gaining a proven industry expert who will be directly responsible for sales, marketing and HR.

Oliver Wüst (on photo left), who has worked for G&H in various roles since 1988 – among that a board member from 2022 to 2024, is also appointed to the management board. As COO, he will assume responsibility for development and technology.

Karsten Reichel (on photo right) will remain part of the management board as CFO. In addition to finance, he will continue to be responsible for compliance and legal.

As part of the new appointment, Alexander Domene has left the company. The supervisory board would like to thank him for his valuable contributions to the development of G&H Bankensoftware AG and his great commitment to the company.

Banking APIs boost automation and a flexible IT architecture

APIs are an established and key factor that contributes significantly to increasing the efficiency and future viability of core banking systems. By automating processes, banks can reduce manual intervention, which not only minimizes sources of error but also cuts costs. Real-time access to data enables faster analyses and optimized decision-making processes. At the same time, APIs facilitate a modular architecture that allows banks to gradually modernize their systems without having to replace the entire core banking system at once.

Another advantage is the high scalability: API-based systems can be flexibly adapted to growing requirements, allowing banks to optimize costs and integrate new technologies more quickly. Cloud integrations are one option for further expanding this factor. As a result, institutions that rely on strategic API use gain agility and can respond better to changing market requirements.

More connectivity and better services

APIs enable banks to seamlessly integrate external services and open up new opportunities for innovative business models. Through open banking initiatives, financial institutions can expand their offerings and provide customers with applications such as multi-banking solutions. This not only fosters competition, but also opens up new revenue streams for banks through collaborations with fintechs and other partners.

Another key benefit of using APIs is the significant acceleration of banking processes, which enables customers to use financial services more quickly and conveniently. Transfers are processed almost in real time, credit decisions are made automatically within a few minutes and payments can be seamlessly integrated into digital platforms. This increase in efficiency leads to a significantly improved customer experience.

Improved personalization of offers is also supported via APIs. By using real-time data, for example, banks can offer customized financial products that are tailored to the individual needs of users.

Risks relating to security and regulation

The implementation of APIs in core banking systems requires the consideration and management of a number of security and compliance risks. Inadequately secured interfaces can allow attackers to access or manipulate sensitive banking data. Unprotected API keys, which can be misused by third parties, are particularly problematic, as are man-in-the-middle attacks if the communication is not sufficiently encrypted.

In addition to the technical risks, banks must also comply with strict regulatory requirements such as PSD2 or the General Data Protection Regulation (GDPR). A lack of auditability or insufficient control over API transactions can have serious legal consequences in some cases. On the other hand, the use of standardized API protocols can facilitate auditability and documentation.

Technical challenges: Third-party providers, performance and system compatibility

The use of APIs in core banking systems also entails technical and strategic challenges. Banks run the risk of becoming overly dependent on third-party providers, which can lead to problems with service outages or rising costs. There is also a risk of vendor lock-in if proprietary API solutions restrict flexibility.

Another problem can be performance and scaling issues. APIs can cause latency effects that have a negative impact on real-time applications. Under high load, bottlenecks or system failures can therefore occur, which are not only a problem within the bank, but also affect the customer experience.

The core banking system itself can also represent a significant technical hurdle. Older systems are often not designed for seamless API integration and thus become a major factor that restricts API usage. Different standards and incompatible technologies also make it difficult to connect external services and often require complex adaptations.

Our conclusion

APIs offer banks many advantages, but their introduction requires careful consideration on a case-by-case basis. Security risks, regulatory requirements and potential costs must be weighed against efficiency gains and innovation opportunities. A well thought-out strategy that considers both technical and economic aspects is crucial to successfully and securely integrate APIs into core banking systems.

 

Are you looking into options for modernizing your core banking system? Our BANCOS Core Banking software solution can put your banking processes on a proven and flexible platform. Find out more online here and feel free to contact us if you would like an individual consultation.

 

As Alexander outlines, we are experiencing a shift towards seamlessly integrated financial services for everyday transactions: When booking a service, for example, there is a direct choice of credit financing, with all the complex banking processes running invisibly in the background.

This scenario is increasingly becoming a reality. It is not just a technological advancement, but a fundamental change in the way banking services are provided and experienced.

Karsten provides valuable insights into the regulatory environment and shows that the requirements for compliance with EU banking regulations are becoming more complex every year. While process automation offers promising solutions, a key challenge also lies in implementing them while maintaining strict compliance standards.

It is a delicate balance that requires careful planning. In the case of newly established banks, demanding compliance processes need to be implemented from scratch, while established institutions are working to modernize their existing workflows.

The trip of our board members to Georgia to visit our business partner Gegidze proved to be more than just a business trip. The experience provided a unique perspective on how different markets are adapting to global banking trends. Georgia’s position as a bridge between the European and Asian markets combined with its commitment to European standards is an interesting case study in international financial innovation. The podcast conversation with Valerian highlighted this and also showed the value of strong international partnerships.

Listen to the full podcast episode here:
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In principle, the SME customers we surveyed can very well imagine processing loan applications completely digitally and show very little reluctance towards such a process design. When it comes to implementation, however, the following challenges need to be solved for banks most of all. These are particularly often perceived as annoying in current practice.

Laborious disclosures for credit checks

The first major pain point is due to the provision of documents in order to comply with regulatory disclosure requirements for carrying out credit checks. Various factors play a role here. The volume of required documents and information from various areas of the company is high. For companies, this means internal research and coordination efforts as well as frequent exchanges with external partners, such as tax advisors. In addition, banks demand a high level of detail, which can result in lengthy question-and-answer processes.

Long processing times of the banks

Even if all documents relating to creditworthiness are complete, it usually takes a while before a credit decision – whether positive or negative – is made. The perception of excessive processing times varies. The bureaucratic document requirements on the part of the banks are also reflected in the corresponding processing time. The human factor also plays a role: if responsible bank employees are absent or on vacation, time-critical investment projects can be delayed.

Low transparency in the process

In the course of application processes, key questions often remain unanswered for corporate customers: What stage are the parties at? When can a decision be expected? Clear answers to these questions would significantly improve the customer experience. In addition, the credit decision is often a “black box” in the event of rejections. A non-transparent rejection is particularly frustrating after a long waiting period and a considerable amount of work.

The implication for banks: Removing these major pain points and barriers in the application process will have a positive impact on competitiveness. This is because the willingness of respondents to apply for a loan from a bank with a more convenient process would increase significantly.

 

Do you want to significantly boost the digitalization and automation of your loan application processes in the corporate lending business? Our BANCOS Onboarding software solution can support you. Find out more online here and feel free to contact us if you would like individual consultation or a personal demo.

 

Core requirements

The focus of the functionalities required in BANCOS Core Banking was on the management of various loan portfolios. This resulted in the following core requirements as part of the project:

1. Mapping of an external loan portfolio:
The core banking solution needed to be configured to interact seamlessly and automatically with the required external systems. To enable a holistic view of credit activities, data from external sources had to be integrated and updated.

2. Automated dunning process with creation of customer letters:
The efficient processing of reminders directly from the core banking system represented an important aspect. The corresponding implementation of an automated dunning process should enable the prompt creation and dispatch of customer letters in the event of payment arrears.

3. Mailbox-based workflow support for manual processing:
In addition to automation functions, direct customer contact is a key success factor for the dunning process. By setting up a mailbox-based workflow within the solution, employees should be optimally supported in their work in order to be able to efficiently manage and document customer communication.

4. Preparation for the integration of additional loan portfolios:
BANCOS Core Banking was implemented with future scalability and expandability. The architecture should be designed in such a way that it enables the efficient integration of additional loan portfolios.

5. Complete implementation of the solution in the Hoist data center:
This requirement addressed the need for a secure and stable environment for the core banking system. In addition to installation and configuration, the work included an extensive test phase to ensure that the solution meets the requirements and guarantees smooth and secure operation of the loans management system.

Project process and implementation

The project implementation for the core banking solution was carried out by an agile project team consisting of experts and managers from Hoist Finance and G&H Bankensoftware AG. This type of collaboration enabled effective communication, continuous feedback and flexible adaptation to changing requirements during the implementation process.

Following a successful project launch, the core banking solution was jointly transferred to operational production. The approach of agile collaboration continues here: workflows and processes are continuously optimized and adapted to new requirements in order to ensure smooth operation and guarantee the best possible performance.

From the perspective of both project partners, the successful implementation of the project and the subsequent transition to operations essentially benefited from the following success factors:

Mutual trust: A trusting collaboration between Hoist Finance and G&H Bankensoftware formed the basis for the success of the project. This was demonstrated above all by open communication, transparent processes and a shared understanding of the objectives.

Clear focus on the functions absolutely necessary for the project launch: The guiding principle of a minimal viable product (MVP) made it possible to create value quickly and receive feedback at an early stage. This helped to minimize risks, shorten time-to-market and improve adaptability to changing requirements.

Agile, cross-company collaboration: This success factor made a major contribution to meeting the ambitious timeline. Short decision-making paths and continuous communication supported rapid decision-making.

Ultimately, the on-time completion of the project with the go-live of the first loan portfolio in BANCOS Core Banking marked a significant milestone in the collaboration between Hoist Finance and G&H Bankensoftware. The use of the solution is now being successively expanded, with further loan portfolios being integrated into the system.

 

 

SMEs are the backbone of the German economy and make a significant contribution to job creation, innovation and economic stability. In this context, they also make a significant proportion of annual investments. However, despite their importance, many SMEs face a variety of challenges when it comes to accessing credit.

Overcoming barriers to SME financing through loans

According to the KfW SME Panel, the majority of SMEs finance new investments primarily from their own funds. Despite historically low interest rates in recent years and the excellent potential for leverage effects, bank credit or loans were only used in second place as a source of financing. In fact, many small and medium-sized enterprises have not even attempted to negotiate a loan. In most cases, however, it was not concerns about their own creditworthiness that prevented companies from entering into loan negotiations. On the contrary, according to KfW research, 95% of SMEs have debt sustainability, i.e. they can meet their obligations from their current cash flow and are therefore creditworthy. Rather, the desire for financial independence, concerns about high costs or disclosure and documentation requirements were barriers to financing through loans.

Concerns on the part of borrowers, particularly with regard to the effort involved or the requirements for disclosure and documentation, are not unfounded. While banks have made enormous progress in the automation and digitalization of consumer loans in recent years, this progress is still significantly lower in the area of corporate loans. For example, some banks in the area of corporate financing already lack the simple option of accepting loan applications from companies online. For many banks, it is still common for SME customers to have to fill out forms and send them by post when applying for corporate loans if they do not choose to go to the branch.

SME customers also have to provide full disclosure of their financial circumstances, even for low-volume loan requests. They have to submit annual financial statements, figures for the year, lists of accounts receivable and accounts payable, order backlogs, information on collateral, etc. so that banks can review these documents in a laborious, manual and time-consuming process – and often make a lending decision based on a two-vote rule by the front and back office. This leads to process inefficiencies for the banks with long throughput and processing times and to long waiting times and a lack of transparency for SME customers. The consequences for banks are significant margin losses or, in extreme cases, a lack of cost coverage, which makes the business correspondingly unattractive. For SME customers, access to funding for investments is delayed.

Making companies attractive offers for corporate loans online

Business decision-makers are increasingly looking online for financing options and efficient, straightforward processes. The traditional SME customer, who once went to a bank branch in person to apply for a loan, is now increasingly using digital channels. There, loan comparison platforms and search engines are the first touchpoints for loan offers. Analyses by KfW Research show that personal interaction between SMEs and banks has steadily lost importance, personal contact with banks is being reduced and fewer branch visits are being made.

The COVID-19 pandemic has further accelerated this trend. Providers specializing in online lending to small and medium-sized enterprises are increasingly filling this gap. With a digital presence and simple, automated processes, they are creating new customer experiences and taking customers away from established players. These offerings can also fall under the embedded lending segment, where the conclusion of loans is integrated into overarching platforms. This is a process that has already been observed in the private customer segment in the past. The strategies of lenders in this segment vary. Some not only act as pure competitors to banks, but also offer them their automation solutions for white-label use. Some players also stand out due to their specific offerings and target group definitions, such as working capital loans or companies with low credit ratings, which are traditionally rarely among banks’ prioritized target groups.

Overall, these developments reinforce the need for banks to remain digitally relevant and to create correspondingly attractive offers and touchpoints for corporate loans.

Efficient use of omni-channel approach in corporate lending business

Offline touchpoints – such as a personal consultation – can also play an important role in starting the loan application process. Although the proportion is declining overall, according to KfW research, a significant proportion of SME decision-makers state that they visit the bank branch for their transactions. The key effect of automated processing following a personal appointment is to relieve the burden on customer service. The time and pressure involved in loan processing can be reduced, such as the reviewing of documents. This puts the focus on the consultation and strengthens the customer relationship.

In summary, it can be said that the automated application process for loans should be started flexibly from two starting points: initiated online by the borrower or offline as part of customer service. It is important that both sales channels are considered in the process automation.

Corporate loans as a building block of a needs-based banking offer

The automation of corporate loans holds great potential for banks, particularly in the SME customer segment. Nevertheless, there are still some barriers to leveraging this potential on both the bank and customer side. These include, above all, a lack of digitalization and automation, which lead to process inefficiencies, but also concerns among customers regarding the effort involved or the requirements for disclosing data to create ratings. Nevertheless, the use of digital touchpoints by SME loan customers is increasing. Specialized, purely digital players for loan financing are becoming increasingly important, so banks should invest in their digital competitiveness in this area. In order to offer customers the best possible individual experience, it is advisable to think “omni-channel” in terms of automation and thus combine personal and digital processes.

Overall, this market situation offers attractive opportunities for credit institutions to further develop their services in order to better meet the needs and requirements of their SME customers. The automation of SME lending can not only play a key role in promoting the growth and resilience of these important economic players. It can also help banks to unlock new potential in the SME financing business.

 

Do you want to make decisive progress in automating your loan application processes in corporate banking? Our BANCOS Onboarding software solution can support you. Find out more online here and feel free to contact us if you would like individual consultation or a personal demo.

A brief clarification of terms to get started: “Embedded finance” refers to the integration of financial services directly into the purchase process of products and services by companies that are not themselves banks or financial service providers. The embedded service can come from a wide range of options such as payments – including “buy now pay later” (BNPL) offers or purchase on invoice – loans, accounts, credit cards or insurance. The principle is fundamentally not new; car banks or comparable dealer financing are often cited as “early” forms of embedded finance. However, it is gaining enormous momentum as a result of digitization and automation, as well as purchasing and consumer behavior that is changing as a result of these factors. The growth potential is assessed as correspondingly large. The consultancy Bain expects revenues for the total market in the U.S. to increase from $22 billion in 2021 to $51 billion in 2026. McKinsey comes to similar figures: Starting from total revenues of $20 billion, they forecast a doubling in the next 3-5 years. Similar developments at corresponding revenue levels can also be assumed for the DACH region.

The lending business as an important market segment

In addition to payment services, embedding loans is a very relevant option for banks. The segment can be divided into further sub-segments, which also brings new market players and competitors onto the scene. The “buy now pay later” segment is dominated by specialized providers such as Klarna, Riverty (formerly Afterpay) or Affirm. In addition to BNPL, the areas of point-of-sale and B2B loans should also be considered. Particularly in the latter, fintechs are active that specialize in providing loans for small and medium-sized enterprises. Growth opportunities through embedded offerings exist with regard to the predicted market growth for banks in all lending segments. We will now go into detail on the risks and opportunities to be taken into account as well as the success factors in technical implementation.

What are the risks and challenges of embedded finance?

The diversified market and competitive environment and the distribution of own offerings on third-party platforms and channels indicate this: Banks need to manage risks with integrated financial products. A major one of these is the potential loss of the direct customer relationship. Traditionally, lending in particular has been a product segment where banks have been competing for customers almost exclusively. These customer journeys took place at the banks’ own touchpoints. In the case of embedded lending, this customer journey can now also take place at any company or retailer that embeds financial services. This gives rise to the risk that existing customers will take out loans with other providers without the knowledge of their bank. The overall increase in the intensity of competition results in a further risk, namely shrinking margins. This further increases cost pressure for banks.

How can banks benefit from embedded finance?

However, the new market environment that is developing also presents banks with a number of opportunities. They can additionally leverage existing competitive advantages. First and foremost is the opportunity to expand customer acquisition. Embedded finance offers a wide range of opportunities, especially in terms of digital touchpoints, through which banks can position themselves as essential partners and enablers or even open up new digital business models. In cooperation with the front-end partner, they are ultimately the ones who, for example, take the loans onto the balance sheet. In this way, the financial product becomes a payment method. The bank thus has the opportunity to become more closely associated in the customer’s perception with the actual purchase and the satisfaction of a need than “merely” with the provision of money.

In the battle for the favor of customers, banks can rely on two competitive advantages over many newcomers and fintechs. The first is their own brand strength. Trust plays a major role in financial services, which banks have generally been able to build up through many years of business activity and specialization. Secondly, in banking, the area of regulation cannot be forgotten. Here, too, established players can leverage their expertise and experience in risk management and compliance when implementing and handling the necessary processes.

IT success factors in implementation

For an embedded finance offering, there are basically three roles to be filled, usually by one actor each. One partner provides the offering (e.g., the bank), the second sells it or embeds it (e.g., a retailer), and the third provides the technical basis. In this context, the central question for banks is: To what extent can and do they want to become a technology or software provider themselves?

Banks therefore have the choice of either providing their own technology or software together with the financial product (banking as a service) or working with an external specialist as a partner. In-house development requires a great deal of time as well as personnel and financial resources. However, it also opens up the possibility of building up a completely new business area in-house. With a technology partnership, this responsibility can be shared and expenses reduced, in some cases considerably, if it is possible to rely on already established solutions and expertise. If the software solution is designed correspondingly, technology partners also offer consulting and support for the process and workflow setup in order to further relieve internal bank resources.

Irrespective of this strategic decision, the following factors are particularly important for the successful technical implementation of embedded finance offerings for banks.

1. Automate processes as fully as possible: This aspect is particularly important for integrated lending products in the retail/B2C segment, as margins on these products are relatively low. An ideally fully automated credit application process, including credit decisioning, can reduce costs and thus enable profitable high-volume business.
2. Master interface management: Due to the typical constellation of three partners, handover points between the players and their systems are more numerous and tend to be even more critical than in traditional credit application processes. Reliable API-based interfaces are therefore critical, as is a high level of problem-solving expertise when individual elements in the process malfunction or fail.
3. Reliably meeting partner requirements: The banks’ distribution partners can come from very different industries. What they usually have in common, however, is a high level of expectation in terms of cooperation. Embedded lending offers in particular are an essential part of the purchasing process as a payment method with a direct influence on the partner’s key KPIs such as conversion rates. The interaction of the mentioned factors, automation and interface management, can make a significant contribution to the reliable fulfillment of such requirements, especially in terms of stability, performance and transparency.

 

As a bank, you want to establish or expand your business via embedded finance? With our BANCOS Onboarding solution, we can support you as a technology partner. We have special expertise in the integration of lending offers in demanding e-commerce environments. Feel free to contact us directly to discuss your needs!

In the latest Digital Sentiment Survey by management consultants McKinsey, banking is rated as one of the digital winners. As part of the study, users across Europe were asked about their behavior with regard to digital channels. Compared with the previous year, a particularly strong increase in the use of digital channels was observed in Germany and Austria. This goes hand in hand with an already high penetration overall, which was driven by the pandemic years, among other things. These findings are supported by those of the Digital Banking Maturity Study conducted this year by consultants Deloitte Digital. Preference for using digital channels has increased by 7 percentage points in Germany compared to the 2020 survey, strong growth by European standards. In contrast, the “Digital Banking Maturity (DBM) Index” – an overall metric for assessing a digital maturity level – improved by only one percentage point, which is low compared to other countries. Accordingly, the gap between the demand for attractive digital banking services and a corresponding offer seems to be widening, especially in the German market.

Online banking as a driver of competitive strength

Online banking is a well-established and frequently used part of the customer journey for banking transactions and financial services. Accordingly, there is great potential here that banks and financial institutions can leverage to improve the digital user experience they offer. For traditional banks, the intensity of competition in this area is particularly high, especially from neo and challenger banks. With comparable products and services, these players place a strong focus on the user experience as a key factor for differentiation. This is also reflected in their lead over established banks in the Deloitte DBM Index in these areas.

Based on our experience in the development of online banking software, applications should be consistently geared to the needs of users. In this way, the digital product experience can be improved and competitiveness increased in consideration of the developments in customer behavior described above. The customer touchpoint online banking and its refinement are also a particularly effective building block of the digital transformation because it has a high and regular visibility in the course of customer journeys.

Three important factors for a good customer experience in digital banking

Time savings and user-friendliness are generally very important factors for digital banking and thus also for online banking applications. It is therefore essential for banks and fintechs to find out what is particularly valuable to their respective customers in the interactions surrounding their accounts and payments. Key questions include: What do customers want to see as quickly as possible after logging into the application? What exactly do they want to do frequently? The answers and data collected on questions like these can be used to derive specific points for designing the user experience in online banking. These can be summarized in three overarching factors that are closely linked: Clarity, relevance and accessibility. Users who have quick and intuitive access to the data and actions that are particularly important to them should develop a high level of satisfaction with the online banking service they use. This in turn strengthens customer loyalty and the brand perception of banks.

An often-mentioned buzzword in digital banking that is closely related to the topic of accessibility is “mobile first”. While mobile devices and apps are important and firmly established channels, individual customer and user orientation must not be ignored in this case either. According to the results of the McKinsey Digital Sentiment Survey, the website and computer are still the dominant ways users interact with banking services. The factors described for improving the user experience should therefore be addressed for all target group and customer segments so that individually tailored use environments can be offered. As a result, a consistent omnichannel brand experience can be built up in this way.

Accelerate digital transformation with external development partnership

With such a target scenario for the design of the online banking touchpoint, banks are faced with the decision of whether to implement it as an in-house development or by purchasing the software from an external provider. To accelerate their own digital transformation, the external “buy” decision offers clear advantages. This is particularly true for smaller to medium-sized banks and financial institutions that have only limited in-house resources for IT and software development – especially in terms of personnel. By leveraging an already developed and mature solution that relies, among other things, on proven standard components for easy implementation, time-to-market can be shortened and a new enhanced customer experience can be rolled out quickly.

Finally, there is one important condition for implementation in partnership with an external provider: It should be possible to make continuous customizations in line with customer needs via flexible white-label software. Depending on the scope and requirements, these can either be carried out directly by the banks themselves or implemented via individual software enhancements. Such individual tailoring of the customer experience can include, for example, product configuration, multi-language capability and adaptations to local standards, or different user interface themes for customer segmentation.