By Dmitry Reshetchenko
What is Scalability? Types of Scalability
Today’s financial sector faces lots of challenges like security issues, differences in operational processes, regulatory uncertainty, and many others. Each day financial organizations look for new ways to grow their business and provide services of high quality. Scalability is one of the key needs of banks, credit unions, loan associations, investment companies, insurance agencies, and mortgage companies. In this article, you will learn what scalability is, why financial companies need scalability, and how to scale up properly.
First off, let’s define scalability. Wikipedia determines scalability as a system’s ability to cope with the huge workload simultaneously with the increase in resources. Simply put, it’s the ability to increase productivity within the company. Scalability can be of two types:
Vertical – When the productivity of every single component of the system is increased to reach the scalability of the whole system. In this case, each component of the system can be replaced with a more powerful component to reach the desired results faster.
Horizontal – When the system is divided into smaller structural components. To reach the scalability of the whole system means to add some new structures, processes, servers to it.
Financial companies can use both types of scalability to grow up their services and management resources. Let’s figure out, why companies operating in the financial sector may need scalability and why they need to think about it beforehand.
Why Do Financial Companies Need Scalability?
Complicated document management
Often, financial institutions face the difficulties in organising their document flow in a proper way. They have piles of papers and files that are to be processed, stored, shared and analysed. Thus, today they are starting to use more robust management information systems (MIS) that can provide for flexibility, speed, user-friendly interface, etc. What is also important about these systems is customisation, security, and scalability. These parameters should be kept in mind if you want to have a system which is fully personalised according to the company’s needs and requirements. No off-the-shelf product could offer you that. Therefore, the majority of insurance companies, banks, and other financial organizations contact software development partners to build their corporate technology products.
Huge client base
For financial companies like for many others, generating more revenue means increasing client base. The ever-growing number of customers requires a highly scalable system that will be able to manage communication, services, and other important processes within the company. Thus, fintech companies strive to provide the software that could cope with the high workload in the time when others can’t continue their work. Scalability is your key to success in the competitive market.
Wide range of product offerings
Banks as well as insurance agencies, for example, have lots of product offerings for their customers. To remain competitive, companies generate ideas and create innovative and sometimes even disruptive products for their clients. To manage all these products and organise them into a certain structured entity, they use up-to-date technologies that allow to process Big Data and manage enterprise resources correctly. Scalability is the number one functionality for ERP systems. If you want to get your system developed the right way, your technology partner should undertake a thorough business analysis to identify the scope of your product offerings in order to know how scalable the system should be.
Efficient services and risks management is impossible without professional manpower. Financial organisations engage lots of human resources that’s why it’s important to manage them effectively. HRM systems for banks, for example, provide such features as planning, acquiring people, training people, performance management, communication management, etc. To manage the ever-growing number of human capital, branches, departments, you should think of scalability in advance.
The process of financial management is quite complex. It includes multi-processes and tasks related to the above-mentioned operations. To process all this stuff, the fintech system must be really powerful and scalable. The ability to grow simultaneously with the growth of human resources, product offerings, services, assets, and other things is of crucial importance for the financial sector. Thus, companies must consider scalability as the key parameter when developing their software systems, applications, and other technology solutions.
Effective Ways to Manage Increased Workload
How to grow your systems effectively? What methods and tools to use? Modern technologies allow scaling up without compromising the high quality of services and security. Here are the main ways you can grow your systems:
Artificial intelligence technology allows using neural networks for detecting images (documents) and identifying customers. AI-enabled applications can significantly automate the processes of documents scanning or customers’ authorization along with providing a high level of security for personal data. Among the other AI-based features that are currently popular for implementation by banks, there are chatbots, fraud detection, personalization, voice, and digital assistants. All these functionalities can reduce time, efforts, and money allocated by financial institutions for proper operations management.
Blockchain enabled by peer-to-peer (P2P) technology is becoming popular in the finance sector. This technology is one of the most powerful tools for providing scalability. Banks, for example, are interested in using blockchain as it could reduce the time for operations processing as well as it could reduce administrative expenses. The integration of Blockchain with current payment systems could make payment processes more secure and fast.
As you can see, considering scalability will help you plan your future with regard to many factors affecting the revenue. Thus, think carefully before developing any software products for your company. Plan, conduct a business analysis and make a list of all the operations you plan to perform in your company.
Sponsored Guest Post
The post What You Should Know About Scalability in the Financial Sector appeared first on The Fintech Times.