Accenture Banking Blog    

If you’re like me, you’re always looking for the most expedient way to get things done right. However, to my mind, what’s even better is finding a way that may offer a faster result and puts me in a favorable position to adjust as needed in the future. It’s like with home renovations. I ask myself what I can do today to make my home more livable, without necessarily tearing the house apart. Can I work on one room at a time or is the house a complete gut job? 

For auto and equipment finance organizations, the way to get fast results might not be immediately clear. Many companies I talk with know they need to modernize their core, but it takes time to get the business case together and to share it with stakeholders to gain consensus. So, what if there was something they could do in the meantime to gain momentum now? 

Enter, microservices. 

What are microservices? 

As my colleague Miha Kralj says, microservices are “an architecture pattern that describes independent, fine-grained, loosely coupled code components that typically handle a single business capability. This business capability could be accepting a payment or issuing a boarding pass, for example.” 

Legacy auto and equipment finance core systems tend to be monolithic applications. They consist of tightly coupled modules with hard-coded links. This means that a simple change to one module can have an enormous impact and even break things across the system. One small tweak can turn into a gut job! 

Microservices, on the other hand, are independent, interoperating services. Miha uses the example of a shopping cart on an e-commerce site. When you select an item to purchase, the shopping cart ‘service’ stores the item in the cart. When you’re ready to check out, the payment ‘service’ performs the financial transaction. Each of these services can be modified without affecting other parts of the system.  

If you remember my recent post about the opportunities for embedded lending and leasing, you’re probably having an a-ha moment. Embedded finance would be a perfect application of microservices—small, independent functions that can be called throughout the financing journey. 

A quick, low-risk solution: how you can apply microservices for maximum impact today 

Auto and equipment financiers are using microservices today and seeing quick results. Here are a few different ways of applying them that you could adopt, too. 

  1. Enabling a new product or market. For companies that have been wanting to explore a new market or launch a new product (maybe green loans?), microservices offer an easy entry point. They’re low risk, because they don’t impact your existing capabilities and offerings. And they let you try something new without you having to invest a huge amount of money up front. 
  2. Delivering improved customer experiences. Microservices are also a fantastic way to improve customer experiences. They let you create a new customer-facing layer, on top of your existing core, which can later be incorporated into your core modernization effort. Because they are built using modern technology solutions, they are relatively easy to integrate with whichever core solution you happen to have. Plus, they let you provide your customers with faster and more streamlined services to help meet their evolving needs as quickly as possible. 
  3. Carving out high-cost areas and shielding the business from obsolescence. The third area where I see microservices offering a great return is in operations you might already have identified as high cost. Rather than waiting until your core modernization is underway, why not replace these expensive operations now, with microservices? They can make a significant difference to your bottom line. And because they are independent and interoperable, you don’t need to understand your entire IT ecosystem to get started. 

Microservices offer the potential for a big return on investment 

In the digital world, lenders and lessors need to be agile. Expectations of commercial and retail customers are changing at a rapid pace. So, financiers need solutions that can help them to quickly deploy new offerings, engage with customers on new channels and make the credit application and approval process as painless as possible. 

Because microservices can be added alongside your existing system without requiring a wholesale upgrade, they can help jumpstart your core modernization and cloud migration efforts, and lead to a path of continuous improvement. All without the fear that you might be heading off in the wrong direction. They’re small, flexible and cost-efficient, and they can help you gain impetus fast. 

If you’d like to talk about how microservices could fit into your broader business strategy, reach out to me today. 

Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. Copyright© 2022 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.