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Today, consumer digital preferences encompass the entire financial journey, from origination through account and loan management. In addition, consumer demands are growing for ancillary financial services, such as budgeting tools and savings apps.

So, what’s a credit union to do when the closed ecosystems of most core providers lack the product diversity and operational strength that’s currently in high demand?

Fortunately, a new alternative has emerged, making it possible for credit unions to open the product ecosystem through composable architecture. By seamlessly appending products to the core, credit unions are meeting the needs of more members, without the outsized cost and timelines associated with core transformations.

The inner workings of composable architecture

A composable approach allows credit unions to access an open ecosystem of products that can be connected directly to the core. The magic takes place through something called an abstraction layer.

A simple way to understand the concept is to think about driving a car. Most people push a button or turn the key to start the vehicle, thinking little about what goes on underneath the hood. An abstraction layer brings the same experience to banking, allowing credit unions to focus on adopting modern products without worrying about the processes necessary to run each feature.

It’s the same with composable architecture. Products sit on top of the abstraction layer and are seamlessly connected to the inner workings of the core via APIs. Credit unions realize seamless access between products and data, enabling streamlined performance as well as rich reporting capabilities.

Composable architecture offers additional advantages as well. Unlike the closed loop system provided by most core providers, new applications are selected from an open ecosystem of products. These cover all key digital functionalities, such as online account origination, as well as add-on capabilities, including detailed analytics.

Because the composable approach isn’t reliant on modernizing the core, time to market and the costs associated with new product development are also drastically reduced, allowing credit unions to deliver the same digital experience of larger financial institutions at a fraction of the overall time and cost.

Finding the right fit—Your partner is key to success

While a composable architecture can quickly and easily modernize today’s credit union, solutions are only as good as the provider partner delivering the service. That makes provider selection one of the most important decisions a credit union can make when adopting new technology products and services.

Providers of composable architecture should have a long and storied history in the financial services space, and with credit unions in particular. Don’t forget, there are a number of applications available today, but in the end, you’re building products that simplify entire customer journeys.

A lending product, for example, might need to provide online and mobile origination while seamlessly facilitating back-office digital servicing and ensuring regulatory compliance. Your provider should have the product engineering experience to select the right technology applications and to develop an end-to-end solution that meets the needs of your institution as well as those of your members.

Persistent Systems, a 32-year old system integrations firm, and Mambu work together to provide the core infrastructure and managed services and support to stand up a financial institution looking to advance their digital offering. With our partnership, customers go to market quickly - onboarding their first customers in just four-five months. Mambu’s cloud-first, API-first, gen 3 core is flexible and we can integrate very easily - taking something from concept to reality in a short timespan.

Eighty-six percent of credit unions now recognize that digital is the key to competitiveness. In the hands of the right partner, composable architecture shortens the transformation runway and puts credit unions on course to expand revenues and meet more member needs.

Learn more about the inner workings of composable banking and open ecosystems in an upcoming NAFCU webinar featuring League Data and Mambu on February 14: “Competing for the future: Executing a successful core modernization program.”

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Persistent Systems
With over 22,000 employees located in 18 countries, Persistent Systems (BSE & NSE: PERSISTENT) is a global services and solutions company delivering Digital Engineering and Enterprise Modernization. We work with the industry leaders including 14 of the 30 most innovative companies as identified by BCG, 80% of the largest banks in the US and India, and numerous innovators across the healthcare and software ecosystems.
Persistent Systems