The concept of the app store, which has taken the mobile world by storm, also has the ability to revolutionise core banking solutions, an expert on banking trends at Gartner said.

“This is the continuation of the consumerisation of IT. A core banking app store is like an iTunes for banking. It is a community developed market place,” said Mr Don Free, Research Director, Gartner.

Giving an example, he said that if a bank came up with an innovative way to reduce the time taken for a process from 20 minutes to five minutes, it could approach a vendor to put the code on an app store.

“The vendor would look at the code to check for regulatory issues and then put it up on the app store. The vendor would then get a share of the revenue.”

This is similar to the way Apple runs its App Store, where it takes a 30 per cent commission from application developers.

The app store concept will catch on because core banking solutions are getting more advanced, said Mr Free. Core banking solutions follow a component-based architecture and components can be sold as apps, he said.

“It, however, works better with advanced technology than with legacy environments,” he said.

But if a bank is not tied down by legacy applications, it can really benefit from the concept, said Mr Free.

“Using an app store approach, you can break down the core banking system into smaller parts and drive significant innovations for the business. The app store approach allows you to access components without developing them. You can now change business processes without involving IT.”

> balaji.n@thehindu.co.in

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