From overwhelmed to overachieving: Transforming bank operations with SaaS

Software-as-a-service (SaaS) enables banks to transfer the building and running of IT systems to the vendor. This shift in the hosting, management and maintenance of software offers a myriad of financial and operational benefits for banks. The #BankingOnSaaS blog series will highlight some of these key advantages.

In this first edition, we’ll discuss how SaaS can reduce a bank’s operational pain. This includes aspects such as maintenance, upgrades, updates, troubleshooting and ease of deployment in contrast to the potential challenges in an on-premise environment.

As the vendor owns and manages the infrastructure in a SaaS model, many of the logistical and technical burdens associated with managing software applications are alleviated – enabling organizations to focus more on their core business activities. This means that banks can benefit from improved functionality, security and usability, with uninterrupted access to the latest version of their solution.
 

Maintenance and upgrades

As previously mentioned, one of the most significant operational benefits of SaaS is the shift in responsibility for software maintenance and upgrades from the customer to the vendor. In an on-premise model, banks must allocate substantial resources for the upkeep of their IT infrastructure—this includes hardware maintenance, as well as software patching and upgrading. These activities not only consume time and financial resources but also pose a risk of downtime during the maintenance period.

With a SaaS model, providers take on the burden of maintaining the software, ensuring that it runs smoothly on their servers. Upgrades are also managed by the vendor, often implemented during off-peak hours, minimizing disruptions to the service. 

This seamless maintenance and upgrade process ensures that organizations always have access to the latest features and security enhancements without the need for significant capital investment or downtime. Both upgrades and updates are generally included in the subscription fee.

Updates and troubleshooting

Updates are crucial for the security and functionality of software applications. With SaaS, updates are frequent and automatic, ensuring that all users benefit from the latest improvements and security patches without having to manually install them. This contrasts with an on-premise solution, where updates can be sporadic and require manual intervention, often leading to version discrepancies and security vulnerabilities.

Moreover, troubleshooting in a SaaS environment is also seamlessly handled by the vendor. With a centralized support team and comprehensive knowledge of the software's backend, the SaaS vendor can quickly identify and resolve issues, often before they impact the end-user. This proactive approach to troubleshooting is difficult to replicate in an on-premise setup, where IT teams may lack specific expertise in the software they are managing.

Moreover, with SaaS, more than one customer accesses a shared application. This means that if a SaaS vendor identifies and fixes an issue impacting one customer, all other customers will benefit from that fix – meaning customers are always accessing the latest version of that software.

Ease of deployment

Deploying new software can be a complex and time-consuming process, particularly in an on-premise environment. It often involves hardware procurement, software installation, configuration, and testing, which can take weeks or even months.

With SaaS, on the other hand, deployment is simpler and faster: it is as simple as creating an account and configuring it to the organization's needs. There's no need for hardware procurement or software installation, and the process can typically be completed in a matter of hours or days. This ease of deployment not only reduces the operational burden on IT departments but also enables organizations to quickly adapt to changing business needs.

Conclusion

By outsourcing the complexities of software hosting, managing and maintenance to a SaaS vendor, banks can reduce their operational pain and focus on what they do best. In the next edition of the #BankingOnSaaS series, we’ll discuss how the flexibility of cloud-native SaaS solutions can increase business agility, allowing banks to better adapt to changing business demands.

To find out more about the key drivers of SaaS adoption in banking, register for our webinar on 9th July.