What is Composable Banking?

Composable banking is a modular approach to financial services where banks can dynamically assemble and reassemble their products and services using interchangeable components, often facilitated by APIs and microservices. This model enables greater flexibility, faster innovation, and improved customer experiences by allowing banks to quickly adapt to market changes and integrate new technologies.

In the lending industry, composable banking, or more specifically, composable lending, is crucial as it allows lenders to rapidly deploy new loan products, integrate with third-party services, and provide personalized lending experiences, ultimately driving growth and customer satisfaction.

What are the key benefits of composable banking for financial institutions?

Composable banking offers several benefits, including increased agility, reduced time-to-market for new products, and enhanced ability to meet customer demands. By using modular components, banks can quickly adapt to regulatory changes, integrate innovative fintech solutions, and create personalized customer experiences.

This approach also reduces operational costs by enabling banks to reuse modular components across services. A recent McKinsey report highlights that adopting composable architectures allows banks to enhance existing platforms with new capabilities, rather than building from scratch, cutting IT costs significantly and speeding up time to market by up to 30%

How does composable banking differ from traditional banking models?

Unlike traditional banking models that rely on monolithic systems, composable banking uses a modular architecture. Legacy systems are often rigid, making it difficult and time-consuming to implement changes or integrate new services. In contrast, composable banking allows banks to break down their services into smaller, independent components that can be easily modified, replaced, or scaled. This flexibility enables banks to respond more quickly to market trends and customer needs.

Anne Boden, founder and CEO of Starling Bank, stated in an article for The Financial Brand that “composable banking is the future of banking (…). With the right technology, banks can easily plug and play services, creating a truly customer-centric ecosystem”

What technologies enable composable banking?

Composable banking is enabled by several key technologies, including Application Programming Interfaces (APIs), microservices, and cloud computing.

• APIs allow different software components to communicate and share data seamlessly.
• Microservices architecture breaks down applications into smaller, independently deployable services.
• Cloud computing provides the scalability and flexibility needed to support these modular components.
• Technologies like containerization and orchestration tools facilitate the management and deployment of these services.

How can Jifiti’s platform support banks in adopting composable banking for their lending services?

Jifiti’s white-labeled lending platform is designed with modularity at its core, aligning perfectly with the principles of composable banking. Banks can integrate Jifiti’s components into their existing systems, allowing them to offer a wide range of lending products quickly and efficiently.

Whether it’s embedding loans at the point of sale or digitizing direct lending channels, Jifiti’s platform enables banks to assemble and reassemble lending services as needed. This flexibility helps banks stay competitive, meet evolving customer expectations, and drive growth in their lending portfolios. By leveraging Jifiti’s technology, banks can accelerate their journey towards a fully composable banking model.