In our 2018 forecast, we spelled out the five layers of a reference architecture to harness the potential of the confluence of technologies. We also talked about a progressive approach towards modernization for that future. In 2019, the structural relationship between the technological nuances of that architecture and its business implications will become exceedingly clear. Taking a leaf from the books of digital disruptors such as Amazon and Alibaba, the reference digital architecture in 2019 will evolve to embrace greater customer and business context as guiding principles of design and technology enablers. The following are the five pillars of this reference digital architecture:

• A deep business focus will be the central feature of a reference digital architecture in 2019 and beyond. In technological parlance, this guiding principle essentially translates to building an architecture that eliminates inadvertent technical debt. This dynamic architecture would allow fast refactoring without huge infrastructural expenses and business impact every time a new technology or requirements come along. Secondly, this reference architecture will be designed for collaboration, that is, considerations and requirements for active collaboration with ecosystem players, partners, and FinTechs will be an architectural principle, and not layered on later.

At the same time, it will allow and facilitate enhanced transparency for another crucial stakeholder, the regulator. Lastly, an architecture that enables all business applications to deliver the value they are intended for with the right process enablers must have four fundamental elements embedded in design. These are: ease of maintenance, ease of configuration, efficiency in deployment, and agility of operation. Failing to ensure these critical elements can undermine the results of the most efficient of architectural designs.

• Today, an e-commerce major is also a cloud service provider and a digital wallet also a leading payment bank. In this digital world of blurring industry boundaries, the reference architecture cannot be restrictive. It will be as easy to adopt for a telco offering financial services as for a challenger bank. Furthermore, in 2019 we will see digital reference architecture evolving towards the future-state of true agnosticism, defined as: being agnostic to the underlying stack, operating system, database, cloud environment, and technology.
• Taking the above principle of ‘path of least restriction’ one step further is the principle of ‘open architecture’. In an increasingly open future, an open reference architecture will be built for maximizing and optimizing the use of open source technologies as opposed to proprietary technology stacks. It will be designed for the four C’s of collaboration, co-development, coinnovation and co-creation with global developer communities.
• The fourth crucial guiding principle of a modern digital reference architecture in 2019 will be automation-bydesign. More than a design built for introducing RPA for rule-based repetitive tasks pervasively, we define automation-by-design as a more holistic concept that encompasses principles such as auto-healing, autocorrection, auto-prevention of potential cyber-attacks, and automated upscaling and down-scaling.

Spanning all the above will be the over-riding theme of comprehensive analytics – analytics that drive deep business focus with continuous insights across AI systems and IoT sensors for context-driven experiences; analytics that drive true agnosticism by dynamically provisioning resources on the cloud or comparing technology stacks, operating systems and database; and analytics for gleaning and disseminating insights across diverse ecosystems and supply chains to realize the expanding definition of banking that goes beyond financial services.

The five guiding principles and pillars explained above define the end-state digital reference architecture for seamless and frictionless user-driven experiences. However, the key challenge that banks will continue to face in getting there, is the challenge of transitioning from existing monolithic legacy estates to plug-and-play services that can be refactored dynamically in the future. In the new year, banks will ask themselves a few new questions and will continue to seek answers to a few old ones to define or course-correct their unique transformation journeys. Some of these questions include: What is the most suitable path for progressive transformation – monolith to modular to micro-services, or is implementing a new digital core system from scratch the way forward? What is the best approach to be cloudnative when all the applications are not entirely ready for the cloud?

2019 will be the year technology teams at banks accelerate their journey of architectural evolution to be completely hand-in-glove with business.