Aligning Software Contracts, Pricing, and Service to the Fintech Era
The way in which banking software is being designed, written, deployed, maintained, updated, and replaced has accelerated due to cheaper storage, faster computer processors, componentized software design, microservices, and cloud deployment. New market entrants—including new fintech software vendors and challenger banks—have entered the banking industry specifically because of, and to take advantage of, these new capabilities.
The lack of budget, insufficient expertise in new IT, and legacy technologies can slow down the pace of technology evaluation, selection, and implementation (i.e., innovation) at financial institutions. However, two less often discussed issues are frequently at the heart of slow IT transformation:
1.The software contracts, terms, and obligations that fintech vendors and financial institutions negotiate and sign. For example, many existing (heritage) systems are on multiyear contracts, which inhibit the ability of financial institutions to switch solutions.
2.Many software products need to interoperate together in real time, which means that when one system changes, they all need to change together to continue interoperating.
To solve these software development transformation problems, FIS announced in August 2020 its new ClearEdge solution, an innovative new software contracting and product bundling offering targeted at community-based FIs in North America. This Solution Brief assesses FIS ClearEdge.