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A British company has solved the greatest challenge in fintech: how to replace the core software that retail banks have clung onto for decades. Vault OS elegantly fills this vacuum and enables a bank of any age or size to deliver innovative end-to-end financial systems that run smoothly in real-time.
The one area of finance unimproved by technology is people’s everyday experience of retail banking. Any mobile or online services that do exist are weak compared to those in other facets of modern life. They are all stunted by the underlying software written by banks decades ago which is no longer fit for purpose. It’s impossible to build great customer experiences on shaky foundations – and millions of people suffer when this software melts down. Treasury Committee chair, Andrew Tyrie MP, demanded bank regulators act to improve the resilience of these systems, saying: “we can’t carry on like this”.
The solution is Vault OS, the first ‘next-generation’ operating system for banks. This was built from the ground up by Thought Machine, a fintech firm that has worked on this project in stealth for two years. It was established by a core of ex-Google engineers and has a team of 50, all based in east London.
Vault OS was created with private blockchain-style technology and has cryptographic ledgers for watertight security. It enables a bank to scale from one customer to tens of millions without expensive in-house data-centres because it runs in the cloud as a software-as-a-service. This removes the need for the large operations teams that banks typically employ purely to keep legacy systems from failing.
As you’d expect of an operating system, Vault OS is hugely flexible and handles any standard banking functions or business models. Best of all, it employs smart contracts and machine learning to enable banks to offer a vast array of financial products – or roll out new ones in days. It is 100% future-proof.
Vault OS provides banks with relief from the challenges of compliance because its treasury and risk functions provide accurate and up-to-date reporting. Every transaction is reported in real time and so within seconds of, say, a customer swiping a credit card, the effect appears on its balance sheet. This means bank officials can determine its exact financial position at any moment. These tools are in the core of Vault OS, making implementation of capital-adequacy standards such as Basel III automatic.
On handing RBS a record £56million fine in 2014, Andrew Bailey, the chief executive of the Prudential Regulation Authority, warned of a “very poor legacy of IT resilience and inadequate management of IT risks”. The premise of legacy systems failing is unthinkable but Vault OS fixes broken banking forever.
BENEFITS FOR BANKS
- Scales from one customer to tens of millions without fixed costs because it runs in the cloud
- Fundamentally secure due to private blockchain-style technology and cryptographic ledgers
- Supports full array of bank services (e.g. current accounts, mortgages, loans, credit cards)
- Flexible set-up for any type of bank, from pure digital challengers, building societies, private banks, business banks, or international universal banks with branches or call centres
- Handles millions of transactions per second, captured in real-time on a single unified ledger
- Accurate risk-reporting and full compliance with capital-adequacy standards such as Basel III
BENEFITS FOR CONSUMERS
- Reliable banking services that accurately group all spending or income into 60 categories
- Real-time transaction information as opposed to current ‘batch-processing’ overnight
- Comprehensive overview of all personal finances with insights including ‘safe-to-spend’
- Smart contracts enable genuinely bespoke financial services such as ‘payment holidays
