Cedar on Banking Technology

AI will fundamentally reshape financial institutions, their operating models, and market competition. Rather than a single technology, AI represents a set of capabilities predictive analytics, autonomous learning, and digital interaction enabled by ecosystems including cloud, blockchain, and quantum computing. Back offices will evolve into AI-driven “back-office-as-a-service” models, turning cost...

Variable pay is a powerful but sensitive tool that can motivate talent and shape organizational culture if designed well, or demotivate employees if handled poorly. Effective variable pay cannot be owned by HR alone; it requires leadership alignment to balance shareholder and employee interests. Four principles are critical: alignment with strategy and values, simplicity and transparency, meaningf...

Enterprise architecture is evolving as banks adapt to digital disruption, regulatory pressure and tech-savvy customers, accelerated by Covid-19. Legacy-heavy traditional banks face greater challenges than digital-native ones, as rigid architectures hinder agility and innovation. While earlier enterprise architecture focused on translating strategy into IT, it often became a constraint for rapid di...

The Core Banking System (CBS) life cycle has two phases: implementation and post-implementation, each requiring a distinct Centre of Excellence (CoE) operating model. Implementation is a major transformation, involving customization, process redesign and governance. Key challenges include prioritizing business requirements, ensuring service continuity, planning scalability and deciding on speciali...

Artificial intelligence, big data analytics and cognitive computing are reshaping the traditionally slow-to-adapt insurance industry. As customer needs shift toward on-demand, micro-duration products and real-time risk assessment, technology is enabling insurers to move beyond one-size-fits-all models. AI supports personalized, pay-as-you-go insurance through real-time pricing, chatbots and automa...

Machine learning (ML) is transforming financial services by enabling systems to learn from data and make predictions, improving accuracy, efficiency and customer experience. Banks are already using ML in areas such as fraud detection, cybersecurity, smart loan origination, collections, virtual assistants and portfolio management, with benefits including lower costs and reductions of over 35% in ba...

Cybersecurity in financial services extends far beyond technology, as the industry’s heavy reliance on digital transactions makes it a prime target for sophisticated cybercrime. While spending on cybersecurity is rising sharply, risks are increasingly driven by people rather than processes, with employees, partners and customers all forming vulnerable points in a highly connected ecosystem. Cloud...

Digital transformation in banking aims to fundamentally reshape customer experience, internal processes, and organizational models, yet not all initiatives deliver intended results. With global digital transformation spending nearing $2 trillion, success depends on more than technology upgrades. Using a Balanced Scorecard lens, four factors determine whether a bank becomes truly digital. First, ba...

Banks need a future-proof digital core banking system to meet rising customer expectations, accelerate innovation, and respond quickly to market and regulatory changes. Traditional monolithic cores are rigid, costly, and unable to support true end-to-end digital transformation, even if modern apps and channels exist. Real transformation requires digitisation across the entire bank, anchored by a m...

Islamic banking is growing rapidly, driven by wider availability, changing consumer preferences, and strong digital adoption. As digital transformation becomes a top priority, specialist Islamic FinTechs are increasingly critical to the sector’s evolution. While Islamic banks actively partner with FinTechs, many face challenges due to limited Shariah expertise among conventional FinTech providers...

Open Banking is a collaborative model that enables the secure sharing of customer-approved banking data through open APIs, fostering both collaboration and competition. This dual dynamic drives innovation, improves customer choice, and enhances financial experiences. FinTech's leverage open APIs to build user-friendly apps, deliver real-time insights, and create tailored solutions, while bank...

Artificial Intelligence (AI) is transforming banking by reshaping processes across data management, lending, security, compliance, and customer engagement. AI, analytics and automation enable banks to process large data volumes, predict market trends, and improve decision-making. Key application areas include automated data collection and analysis, AI-driven credit and lending decisions, process a...

Building a successful digital bank goes far beyond launching mobile apps or marketing campaigns; it requires a customer-centric value proposition, strong internal capabilities and an organization-wide cultural shift. The digital journey begins by clearly defining “what’s in it for the customer,” ensuring technology, operating models and capabilities converge to deliver superior experiences. As ban...

Although digital transformation tops most banks’ agendas, only about half achieve success because digital banking is often treated as a technology project rather than a business transformation. Technology is an enabler; true success depends on customer engagement, experience and continuous innovation. Banks must dispel key myths: digital initiatives cannot be deferred, as rapid technological and c...

Core Banking Systems are critical to a bank’s competitiveness, and selecting the wrong platform can lead to major opportunity losses. Despite many vendors offering proven solutions, success depends on choosing a system that truly fits the bank’s business strategy and future needs. Based on extensive regional experience, Cedar outlines a structured, objective approach to selection. Key steps includ...

Insurtech are firmly established and are reshaping the insurance industry, forcing incumbents to choose between competition and collaboration. Insurtech's add value through innovative product development (such as micro-duration and on-demand insurance), digital distribution and disintermediation, peer-to-peer models, and advanced technologies including analytics, AI and IoT across the insuran...

Sanjiv Anand, Chairman, Cedar Management Consulting International A study of small and mid-size U.S. banks shows a widening analytics gap versus large banks. While big banks invest heavily in enterprise BI, predictive analytics, and large teams of specialists, smaller banks remain constrained by Excel-based reporting or limited BI tools with narrow adoption and high costs. Even mid-sized banks str...

Covid-19 and low interest rates have squeezed margins in corporate banking, accelerating a shift from interest income to fee-based Global Transaction Banking (GTB). GTB services—especially cash management, payments, collections and liquidity—are expected to contribute 60–70% of GTB revenues, representing a $1 trillion global opportunity. FinTech's are disrupting GTB through digital, blockchai...

Robust quality assurance (QA) is critical to the success of large core banking transformations, where banks often face tough trade-offs between speed and system reliability. A well-planned, integrated QA approach reduces cutover risk in these complex, high-stakes programs. QA must go beyond basic user acceptance testing to include factory testing, system integration, UAT, regression, performance a...

The rise of FinTech incubators has led to diverse accelerator and lab models designed to help start-ups scale. Accelerators typically offer time-bound, intensive programs (3–6 months) focused on mentoring, networking and early-stage funding, often in exchange for equity. Unlike traditional incubators, they emphasize business development over long-term physical infrastructure and aim to make start-...

Banks must modernize legacy core banking systems to enable innovation, meet rising customer expectations, and respond quickly to change. Traditional cores are rigid, fragmented, and unable to support true end-to-end digital transformation, even when modern channels exist. A future-proof “Digital Core Banking” approach embeds digitisation across the bank, not just at the front end. The Digital Core...

The Covid-19 pandemic has accelerated ASEAN’s digital transformation, building on the region’s early adoption of digital banking and fintech innovation. ASEAN’s 10 nations show uneven banking penetration, with over 150 million unbanked adults and a young, mobile-first population, creating strong demand for digital financial services. Regulatory support has been pivotal, with countries like Singapo...

A Program Management Office (PMO) is critical to the success of strategic initiatives such as new product launches, market expansion, cost optimization, or large IT programs. A PMO need not always be permanent; it can be temporary or project-specific. However, it creates maximum value when it has enterprise-wide authority, reports to senior leadership, and aligns initiatives with organizational st...

Digital payments are transforming everyday commerce, with even small street vendors adopting QR-based transactions for low-value payments. While payments span P2P, C2B, B2C and B2B models, it is low-value, high-volume P2P and merchant payments that are driving mass adoption. India’s UPI exemplifies this shift, crossing USD 1 trillion in transaction value by March 2022 and enabling fee-free merchan...

The insurance industry, long viewed as highly traditional, is facing a period of transformation similar to banking, driven by digital disruption, changing customer expectations and the need to improve penetration efficiently. While core insurance processes will remain, their execution is being reshaped by technology and data. Four innovation trends are defining the future. First, digital and onlin...