Why banks and credit unions are switching to managed integration in 2023

February 1, 2023
7 mins
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It’s no great surprise that the global economy remains fragile going into 2023. Decade-defining inflation, rising interest rates, bear market conditions, ongoing supply chain disruptions, and skills shortages are all prevalent issues that banking and credit union leaders must prioritize and take action against. This includes reassessing technology spending to find new efficiencies and sources of value. 

At the same time, customer and member expectations are only increasing. The demand for highly personalized, seamless experiences (driven by data-rich insights), is at an all-time high with banks and credit unions looking to drive down switching costs whilst promoting brand loyalty. 

So how can banks and credit unions successfully navigate these uncertain waters? 

In this article, we’ll cover how banks and credit unions are looking to reduce their total cost of ownership and promote more data-driven decision making through a managed integration approach. 

What are the different integration approaches for banks and credit unions? 

Most banks and credit unions work across dozens (if not hundreds) of platforms and technologies. Unfortunately, most companies find it difficult to seamlessly connect these solutions, prohibiting data-driven decision making. This is where a good integration strategy comes into play.

So which integration strategy is right for you? Between point to point, Integration Platform as a Service (iPaaS), middleware, and managed integrations, there’s many options out there. Let’s start with the basics:

  1. Point to Point (most complex and time consuming): This involves the use of custom code to connect two platforms together.
  2. Middleware (scalable but can be costly): A software that acts as a ‘middleman’ between two or more systems to help them communicate with one another. 
  3. Services (leaving it all to someone else): A services approach involves working with a cloud-based service to help you manage the connections between your applications and technologies. This could include an iPaaS or managed integration service such as Propel Integration Partners.

There’s a lot more to unpack when talking about different types of integration approaches. We take a deep dive in our blog here. But for now, we’ll focus on number three, managed integration for banks and credit unions. 

What is managed integration?

Managed integration covers everything you need to create connected, trusted data and systems. This can include everything from platform management, data strategy, and infrastructure setup, to integration, maintenance, and troubleshooting. 

Unlike traditional iPaaS solutions, that only provide a platform and leave the rest up to you, managed integration includes:

  • Platform management
  • Licensing costs 
  • Build and deployment of custom solutions
  • Dedicated resourcing 
  • Ongoing maintenance and improvements
  • Regular support check-ins

Why is managed integration a good option for banks and credit unions?

For banks and credit unions, many of whom still utilize legacy technologies, effectively connecting, managing, and utilizing all their rich data is a complex and costly task. So how can a managed integration approach help banks and credit unions thrive in 2023? 

1. Building economic resilience

According to Gartner, while growth in banking and credit unions is a top priority for 2023, the need to do so efficiently through cost optimization and risk management also requires new technology innovations. While most banks are on sound footing, ongoing supply chain and energy shocks, persistent inflation, and tightening monetary policy will be felt across the industry.

To navigate these challenging times, banks and credit unions should be considering the total cost of ownership across their IT systems whilst reassessing traditional product, service, and industry boundaries to create new sources of value. 

If we compare total cost of ownership for integration approaches (iPaaS/middleware vs. managed integration), we can see that whilst iPaaS may have once been a good option, due to the higher costs and internal team requirements, it may hinder resilience for banks and credit unions in 2023.

2. Solving the IT skills shortage

According to a recent report, finding and retaining IT and technology talent is becoming increasingly difficult for financial service leaders. Add the current state of economic uncertainty, rising inflation, and a looming recession, and the situation goes from bad to worse. 

A managed integration approach removes the burden of finding and retaining IT experts. You’ll work hand-in-hand with a dedicated integration team who’ll proactively manage your integrations and identify, diagnose, and troubleshoot potential errors before they become a problem. They’ll also recommend best practices, install updates, and optimize integration performance.

3. Staying on top of data, security, and compliance regulations 

Highly regulated industries like financial services rely heavily on compliant data practices and security. And according to Salesforce, data security is now the leading pain point for IT leaders—taking the lead from “digital transformation” for the first time in years. 

To stay competitive in a digital-first world, banks and credit unions must be able to build trusting relationships with their customers and members. To do so requires IT governance at scale and the highest levels of IT security and compliance. Today’s hybrid workplace has made this harder than ever for IT leaders. 

Managed integration helps banks and credit unions create secure and seamless integrations across their most critical systems, providing ease of mind that customer and member data is safe. By leveraging industry-leading data platforms, they maintain the highest security and compliance standards, so you can focus on providing the best customer experience.

4. Migrating off legacy technologies

With the proliferation of cloud computing in financial services came a SaaS integration boom. These legacy SaaS integration platforms such as BizTalk, TIBCO, IBM Integration Bus, and Red Hat Fuse were helpful in solving simple connections. However, effectively connecting the ever-expanding financial services ecosystem can be expensive, complex, and time-consuming. 

On top of this, many banks and credit unions lack the skilled IT staff to maintain each integration, resulting in clunky, inefficient systems and unreliable data.

We know migrating from a legacy platform is never “easy”. However managed integration allows you to offload the task onto someone else. Managed integration also grows with your system complexity. With ongoing support, updates, and enhancements, you can rest easy knowing you’ll always have an elegant system you can trust. 

Get started with managed integration for banks and credit unions

Great customer experiences start with good data and connected systems. By working with a managed integration partner, banks and credit unions can accelerate modernization, streamline costs, and alleviate resourcing challenges. 

Propel Integration Partners is North America’s leading managed integration provider. We handle everything from strategy and solution to support and scale, modernizing and connecting your most critical systems, so you can get more out of your data.

True business propulsion starts with well connected data.

Get started