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Jacobus Eksteen, senior scoring analyst at Compuscan and Scoresharp.
Jacobus Eksteen, senior scoring analyst at Compuscan and Scoresharp.
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Banks are saddled with legacy systems that make it difficult to pivot their business models and implement digital solutions that can rival new and nimble fintech providers.

"Cloud computing has been a significant catalyst for digital disruption in the banking and credit sectors," says Hans Zachar, MD for technology strategy at Accenture South Africa.

"While banks grapple with their legacy systems, new cloud-native solutions are emerging that are decoupled from the core banking system and help the incumbents keep pace with digital disruption in the sector."

Jacobus Eksteen, senior scoring analyst at Compuscan and Scoresharp, explains that data, data processing and modular credit management solutions provisioned from the cloud improve accessibility, scalability and security.

"Local businesses are increasingly embracing off-premise hosted solutions as part of a hybrid cloud model, which serves as a stepping stone towards full cloud enablement."

According to Eksteen, competition will increase once Microsoft Azure, Amazon Web Services and Google Cloud establish local data centres.

Once in the hosted environment, providers of financial services can create new platforms to drive business, broaden their reach and revolutionise the customer experience by expediting risk assessment and credit granting processes.

"The technologies applied in this decoupled context are easy to access, and operate within an open API ecosystem. This makes it simpler to integrate additional solutions such as data analytics, applied intelligence and back-end automation," says Zachar.

And it is on the back end where efficiencies and all real-time capabilities are realised.

"Once you remove back-end friction from systems, you create seamless customer experiences that can meet consumer expectations in the new digital economy. Back-end automation also controls costs by reducing the administrative burden and improving regulatory compliance."

In terms of analytics, Charles Nyamuzinga, senior business solutions manager, pre-sales risk practice at SAS, explains that technology helps credit providers make objective and more accurate lending decisions.

"Credit risk analytics help providers manage the credit lifecycle to determine the appropriate lending criteria, including factors such as customer default probability and the appropriate terms on which to grant credit."

An open API cloud ecosystem makes it possible for banks to reimagine their offering beyond just lending, adds Zachar.

"With the right technology, banks can enhance the value chain and own the customer relationship from end to end, which is a powerful value proposition."