Handling costs of transactions through Internet are up to a factor hundred less than those of a traditional branch personnel-based transaction. Outsourcing has become a quite common phenomenon in the finance industry, for example payment systems. Financial institutions have to deal with market risks, business risks, and even operational risks, and indeed, selling and repackaging risks is one of the core competences of the financial industry. However, we still have to find the right mathematical models, which calls for expertise in areas like stochastics, numerical analysis, partial differential equations, and optimization. The second, external wave has fundamentally changed the way in which we distribute our services and gain access to our customers.
Electronic money is a reality and E-finance solutions are rapidly gaining customer acceptance.
The world is changing before our very eyes. The following examples illustrate the issues coming up. First, there is an enormous problem with legacy systems. Several assumptions underlying the traditional approach turn out to be false, for example that old legacy systems should be fully replaced, and that systems are best designed in their entirety first and then constructed. Our experience is that in view of the rapidly changing environments the system should be modular.