New Delhi, May 27 -- Core systems are central to banking, financial services, and insurance (BFSI) operations. However, these legacy mainframe systems, often built with vast amounts of code, are expensive to maintain. Their complexity, coupled with shrinking expertise, hinders innovation and responsiveness. Faced with tightening IT budgets, BFSI organisations are increasingly leveraging cloud platforms, AI, and open-source technologies to improve agility, reduce costs, and mitigate risks, says Kiran Jagannath, Head of Financial Services and Conglomerates at Amazon Web Services (AWS) India and South Asia, in an interview with TechCircle.
He elaborates on why a core-to-cloud transformation is essential for BFSI firms that are aiming for agility and competitiveness, as well as how AWS supports clients in achieving a smooth transition. "Migrating core systems, particularly those developed over decades using legacy technologies, poses significant challenges. A mere lift-and-shift strategy is inadequate in this scenario, making modernisation crucial," he remarks.
Discussing the various migration processes, Jagannath notes that banks are adopting strategies such as 'hollowing the core', which involves extracting business logic to foster innovation while the core remains focused on transactional ledgers and data storage. Another strategy is the 'dual engine', which preserves the existing core for current customers while developing a new, modern core for new products and clients."We are working closely with independent software vendors (ISVs) to modernise their technology stacks, assisting them in adopting open-source technologies like PostgreSQL to replace less adaptable proprietary databases," says Jagannath.
On the client side, Razorpay has successfully migrated 100% of its databases to AWS Aurora to enhance resiliency, stability, and customer experience. Seta serves as another example; they provide modern code built on AWS, utilising our cloud-native services for improved security and resilience. The PayZapp application from HDFC Bank is constructed on Seta, Jagannath adds.
He states that AWS supports ISVs in modernising applications and assists banks in transitioning to contemporary technologies through its migration and modernisation program. This initiative encompasses solution architects and a worldwide partner network, facilitating auto-scaling and pioneering cloud architectures such as microservices and serverless frameworks. AWS tackles technical debt and the modernisation requirements of ISVs by offering partners, ISV solution providers, and training initiatives, having educated over 5.9 million individuals in India since 2017.
According to Jagannath, AWS incorporates generative AI to enhance its functionalities and assist clients, highlighting choice through Amazon Bedrock, which provides various models via an API approach. Security is of utmost importance, with a 'Zero Day' strategy and the utilisation of Bedrock to integrate models with customer data. "Generative AI simplifies data collection and consolidation, enhancing human decision-making and elevating customer experience. Companies are witnessing returns on investment, with Bajaj Allianz employing Amazon Bedrock for a customer service chatbot and Fintech startup Dhan utilising AI/ML to enhance KYC processes, thereby reducing waiting times and operational expenses," he informs.
This year, the company would remain committed to customers in their modernisation journey through its robust platform and extensive array of services, as part of the company's plans to invest $12.7 billion in India by 2030. "In the upcoming 12-18 months, enhancing customer experiences and accelerating product innovation will remain key priorities, with AWS facilitating modernisation and offering generative AI solutions for quicker claims resolution and increased productivity," says Jagannath.
Published by HT Digital Content Services with permission from TechCircle.