Today’s banking is running on code. It would only be fair to say that the quest for a competitive edge in the financial sector has shifted from relying on manual manpower to the strategic mastery of computer code. How so?
Let’s take a moment to step back in time, to an era before the advent of tools like cloud computing platforms, mobile apps, and artificial intelligence models. During that period, if banks aimed to enhance efficiency or improve customer satisfaction, their only option was to expand their workforce (and invest heavily in training).
These days, however, banks are developing — whether independently or in collaboration with companies providing financial custom software development — cutting-edge software capable of facilitating employee workflows, streamlining customer journeys and introducing previously unimaginable business opportunities.
But how does this work, really?
What is banking software development?
Generally speaking, banking software development is the process of creating, testing and maintaining software applications and systems used in the banking and financial industry. To put it differently, it involves creating software solutions tailored to meet the distinct needs and challenges faced by banks, financial institutions and their customers.
The primary objective of banking software development is to create software solutions that are robust, secure and capable of streamlining banking operations and enhancing customer experiences — while ensuring compliance with industry regulations.
Banking and financial software development covers a broad spectrum of applications, ranging from core banking systems and online platforms, through payment processing software to customer relationship management tools.
As you can imagine, this field is dynamic and continually adapts to incorporate emerging technologies, meeting the ever-evolving demands of the financial industry. Taking all of the above into account, it’s not difficult to conclude that the role of software development in banking is particularly important today.
What software is used in banking?
Financial institutions rely on various software to enhance their operations and improve customer service. However, some areas receive more focus than others. Here are four of the primary software domains that banks particularly prioritize:
- Financial operations management software, which handles tasks like balanced scorecard systems, financial planning and budgeting, while ensuring transparency and coordination in banking activities.
- Document management software that streamlines (as the name suggests) document-related processes, not only diminishing paperwork but also accelerating the decision-making process.
- Administrative management software (including tools like financial calendars) that assists banks in organizing employees’ workdays, distinguishing between weekends, closed days and open days to maintain smooth operations.
- Customer Relationship Management (CRM) software that helps banks personalize interactions at every stage, from attracting customers to post-sales service, addressing the challenge of understanding customer intentions, and tailoring services to individual needs.
What banks can also do is to use open banking to facilitate seamless integration and collaboration with third-party developers and fintech firms. This strategic move empowers financial institutions to actively encourage innovation and the creation of beneficial financial tools like those listed above.
Popular banking software development models
In banking, creating systems and applications involves employing at least one of various development models. Choosing the right development model for software creation can be challenging, given the distinct approach each model brings to organizing and overseeing the software development process. Yet, with a clear understanding of each model, banks are equipped to make informed decisions and choose the most suitable option.
Take a look at some of these models.
Let’s start with the Waterfall model, which can be described as a step-by-step software development process where planning and testing phases are completed first before moving forward. This method proves to be highly effective when all project requirements are crystal clear at the initial stages.
Conversely, the Agile model introduces a more flexible and iterative approach that effectively accommodates evolving project needs. It’s particularly well-suited for projects with dynamic requirements, allowing for seamless adjustments as the project unfolds.
Then there is Scrum, a more specialized form of the Agile model that breaks work down into fixed-length cycles called sprints, fostering collaboration among teams to deliver specific project increments.
Banks also have the option to adopt the DevOps model which puts a strong emphasis on close cooperation between development and operations teams. In the DevOps framework, teams collaborate throughout the entire life cycle of a software application, covering everything from development and testing to deployment and operations.
Other banking software development models include the Incremental Model, Spiral Model, Rapid Application Development (RAD) and Kanban.
Read also: What is branchless banking?
What programming languages are used in banking?
Banks and financial institutions utilize various coding languages such as Java, Python, C++ and Scala. While all these languages can be effective, Java stands out as the most commonly used.
The predominant use of the Java language in banking is attributed to its exceptional security and portability features. Java comes equipped with built-in support for data encryption, ensuring secure information handling. Its capabilities extend to having a secure network database and facilitating secure communication, which adds an extra layer of reliability to its user-friendly features.
Plus, Java is known for its straightforward learning curve and ease of use for anyone, distinguishing it as a simpler language when compared to others such as C and C++.
How to find banking software developers
While some banks opt for in-house software development due to ample resources, others choose to collaborate with vendors providing banking software development services. Choosing the right vendor involves assessing their expertise, regulatory compliance, solution scalability, ongoing support and reputation. A careful review of customer feedback and alignment with the bank’s specific needs is essential for a successful partnership.
At Software Mind, we specialize in providing all companies — including banks and financial institutions — with the support of dedicated software development teams.
Get in touch with us and our experts will reach out to learn more about your case and identify the most suitable development model.. Together, we can create distinctive, secure and efficient software tailored precisely to meet the requirements of your banking operations.
About the authorSoftware Mind
Software Mind provides companies with autonomous development teams who manage software life cycles from ideation to release and beyond. For over 20 years we’ve been enriching organizations with the talent they need to boost scalability, drive dynamic growth and bring disruptive ideas to life. Our top-notch engineering teams combine ownership with leading technologies, including cloud, AI, data science and embedded software to accelerate digital transformations and boost software delivery. A culture that embraces openness, craves more and acts with respect enables our bold and passionate people to create evolutive solutions that support scale-ups, unicorns and enterprise-level companies around the world.