How traditional banks are unlocking new digital capabilities

Digital transformation done right. From a traditional bank to a competitive digital powerhouse enabling financial services at fingertips

Our client’s backstory

The client is one of the largest banks in Austria serving 2.5 million customers. They provide a wide range of retail and corporate banking products, comprehensive savings, lending, leasing, investment, building society and insurance products and services through various online and offline channels. The bank operates primarily in Austria but has also a strong presence in Germany and Switzerland.

A few years ago, the bank management analyzed their digital capabilities and noticed several challenges in areas of customer experience, sales and advisory capabilities, and software implementation and efficiency. To stay competitive and relevant in the era of rising neobanks, they decided to extend their services to attract new and retain old clients and leverage new technologies to increase ROI.

They decided to unlock new digital capabilities to prevent existing customer to churn and attract new ones by building a new and simple financial service platform to make the lives of their customers easier. This would allow them to create holistic customer journeys through omni- channel experience, real-time, mobile and contextual sales of bank products and extend their business model with 3rd party offerings. 

The challenges

One of the big conversations taking place in the finance industry is about neobanks and/or challenger banks. Compared to a traditional bank, a neobank (also known as an online bank, internet-only or digital bank) is a type of a direct bank that operates exclusively online without traditional physical branch networks.

They’re offering no-fee accounts, a high-speed signup process, an intuitive user interface and are disrupting the way people save and spend their money. The growth in digital banking is showing no signs of slowing down. As a rule, traditional bank institutions struggle to build a loyal customer base, while the newly emerging digital-only banks have all the attributes of a strong brand and can keep customers both happy and engaged with their product.

To be able to compete with such services, our client had to move away from the legacy system, but building a new platform on an infrastructure running on an IBM mainframe-based banking system and dozens of legacy applications would be very hard, slow and expensive, so the team decided to build a new system and use the mainframe just as a tool to access the core business system.

Another challenge was to transform a traditional bank culture into an agile-driven organization and empower teams to take ownership of assigned business challenges and introducing a more autonomous approach. 

Klika solution

The main goal was building a new system from scratch that supports adding new features and third-party integration that reduces maintenance costs and improves overall performance. To ensure flexibility and scalability of the new system, we designed and implemented a modern microservice-based architecture.

Having had previous experience in building similar microservice architecture solutions for both traditional and neobanks, Klika was part of the core development and quality assurance team in charge of the successful implementation. We used Kubernetes, as a container orchestration platform for a domain-driven microservice architecture, while Java/Spring was used for creating the microservices.

We split the platform into two sets of domain services and specified product domains, where each domain is responsible for one product, like onboarding mobile customers, loans for web customers, etc. On the other hand, we defined a set of domains that are used internally and can be shared across different apps and channels.

To get the team going and support faster time to market, we decided to use a Spotify-like agile model that focused more on behaviors and principles. It helped us release software faster and track progress better. We relied on Continuous Integration/Continuous Delivery coupled with other changes primarily in business operations, tech practices and culture to bring agility into a traditional bank setting .

We implemented most of the shared domains , SaaS Fast Loan products offered to the bank’s partners (like Saturn and Mediamarkt), as well as various tools used by the Marketing Department (integration with Loyalty providers, CRMs, etc.).

Our team also developed a robust and highly functional mobile app for both iOS and Android (frontend and backend) with all the functions and features relevant for the modern user. 

The result

It was quite fulfilling to witness and be a part of this transformation and see a traditional bank evolve into dozens of agile product and development squads working together and releasing products on an almost weekly basis.

The new platform reduced redundancies and duplication of software implementation and overall maintenance costs, allowing the bank’s team to perform better with higher autonomy and more clarity.

In the end, the whole system consisted of roughly 200 microservices and the bank was able to offer a holistic customer journey through omni- channel experience, real-time and customer-centric products that can parallel any neobank service.    

Technology stack

Java/Spring, Swagger, Oauth2/JWT/2FA, Kafka, Azure Cloud, Docker/Kubernetes, ELK stack