Software-as-a-service, or SaaS, delivers software and applications over the internet, via a subscription model. It is one of the three constituents of cloud computing – along with infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) – and
has revolutionised business operations; mushrooming from its market valuation of $237 billion in 2022 to an expected
$908 billion by 2030.
For financial institutions, SaaS can be deployed in numerous scenarios – in the front or back-end – including email provision, billing, communications, customer relationship management (CRM), enterprise resource planning (ERP), financial management, human
resources, sales management, and more.
With Saas comes a raft of
benefits, drawbacks, and a wide range of costs. This article explores how financial institutions should begin choosing a SaaS solution. Here is a list of questions to be asked by technology officers, before a partnership is formed with a third-party provider.
10 Questions:
- Does the product meet our needs? If a solution purports to do
everything, then I cannot be great at anything. Rather than purchasing the Swiss Army Knife of SaaS solutions, it is better to pick the best-in-class tool for a specific job at hand. This could mean running numerous SaaS solutions simultaneously,
which is why integration becomes increasingly important. More on that in question nine.
- How usable is the solution? This may sound obvious, but too often it is not practiced. The best SaaS products are easy for staff or customers to interact with – and will help them complete their tasks efficiently. Other questions to ask
include: How reliable is the solution? How steep is the learning curve? Or, are there any other applications?
- Does the subscription price include unlimited and continual software updates? As part of most SaaS models, recipients should automatically receive the latest version of the software. This can be conducted over the cloud, by the provider,
and version control and system compatibility should be maintained.
- Is there built-in horizontal and vertical scalability? Adding further databases, or more computational power, should be actionable on-demand and at speed. The best SaaS products remain relevant and useable as markets grow and evolve.
- Will users benefit from broad access? One of the benefits of SaaS is that, in a world increasingly populated by remote workers, users need only have internet connectivity and a web browser. This means that in order for the solution to be
effective, no plug-ins or installation processes should be necessary. If there is an onboarding element, is it personalised?
- Are the regulations of numerous jurisdictions factored in? For a financial firm that operation across numerous regions, a range of measures may have to be taken in order to remain compliant – particularly when it comes to data handling
and storage. In Europe, for example, the General Data Protection Regulation (GDPR) privacy law compels constituents to hold their data in the same place as their work. This could limit the extent to which the remote benefits of some SaaS solutions can be exploited.
- What are access controls like? With SaaS, a firm’s assets no longer sit within the internal network, so stronger-than-usual access controls may be required. A robust SaaS solution will ensure that those with the right credentials
see the right information. No ifs, no buts.
- How reliant would my organisation become on this solution? Overreliance on a single IT provider is known as a ‘vendor lock-in’. This can happen if areas such as security and compliance are outsourced, wholesale, to a single provider. It
may be worth asking how easy it would be to move the organisation’s database to another provider, if the appetite arose.
- Is there potential for integration with other solutions? In some cases, integration is foundational to a service’s success. What other in-house tools must this solution work alongside? Indeed, instead of diluting quality, firms may wish
to expand functionality by layering integrations with numerous products.
- Is there a mechanism for feedback and technical support? Whether the SaaS solution is for the front or back-end, all end-users must be able to submit their thoughts on the product in some form, so that continual fine-tuning can be undertaken.
Providing a financial institution’s goals are clear – and the right questions are asked – SaaS partnerships have the potential to revolutionise operations, across departments. Whether deployed in cybersecurity,
payments, or the
customer segment, SaaS is booming and showing no signs of slowing down.