Features > Finance
“Post-Next Generation Financial System” for the Next Decade

Financial companies upgrade their entire IT system every decade. A large-scale upgrade called the “next generation system” took place in the 2000s, and now is the time for another big upgrade to what’s called the “post-next generation system”.

The “post-next generation system” promises more innovation and change compared to the existing “next generation system”. Rapid digitization and individualization which occurred around 2010 reinforced consumers’ right to choose and influence the market.

As a result, companies needed to make their systems more client-oriented to emphasize closer communication with clients. Facing low economic growth and interest rates, financial businesses turned to the international market, which made them desperate for a flexible and expandable finance IT system.


ICDMS (IoT, Cloud, Big Data, Mobile, and Security) that are commonly mentioned as the signifiers of IT innovation which changed every industry are now followed by fintech, blockchain, and chatbot which are playing the central role in the new digital financial innovation.

Discussions on innovation, which promoted distributed management of financial data, made it possible to fundamentally reconsider the conventional centralized control system. Therefore, the post-next generation system needs to promise changes and innovations that reflect the new demand.

A financial company’s IT system can be divided into the channel line which is like the window through which clients contact for service, CX hub implementing services provided to clients, data line for data analysis and marketing, account line for functions fundamental for a financial company, and IT infra and development/operation.

Financial companies’ investment for IT systems and the next generation systems have been conducted based on the account line. Due to changes in the IT world, major innovations for the post-next generation system are expected to be made around the channel and data lines. In order to provide the best digital customer experience through diversifying channels, moreover, a CX (Customer Experience) hub which connects services and processes of the account and channel lines is required.


The account line also needs to be prepared for core-based simplification and globalized support. For the infrastructure line, switching to the x86/OSS (Open Source Software) and MDD (Model-Driven Development) should be considered while implementing a cloud network.

Let’s have a look at what each line will look like in the future more specifically.

The channel line has already made most of the changes by switching from branch, ATM, and PC channels to mobile channels for smart phones and tablets. Mobile apps with standard information and functions have become the central points of customer experience. In the near future, however, chatbots with artificial intelligence through which voices and natural languages can be understood will lead the interface, and smart phones will be functioning only as a hub for information exchange.

Furthermore, financial companies will have to open their data and services to the public, while preparing for open API platforms through which they can cooperated with partnered services that have secured clients.

CX hub should provide financial transaction services as well as sales, marketing, and fintech services based on the infrastructure so that channel processes can be easily connected, and play a role as the integrative manager for client and financial instrument information.


Unlike the existing system which integrated all functions through the account line, the new system needs to leave only fundamental functions to the account line, and separate other shared functions such as client and financial instruments. It should also get ready for globalization through multi-language service, multiple currency service, and multi-platform service so that it can expand the business to the global world.

The data line should support behavior-based marketing and individualization by building a big data-based infrastructure and developing event processing technology, rather than simply collecting data and analyzing it behind the account line.

An infrastructure architecture environment is expected to be implemented not only on x86 channel line which is considered the post-architecture, but also on the account line. Open source WEB and WAS can be used in all fields of business, and some leading financial companies are upgrading their systems by applying them already.

Even though we have to wait a bit longer for open source DBMS to be applied due to its stability issue, it won’t be long until it’s implemented on the account line.

Lastly, MDD that has been applied and proven for each financial field is necessary for post-next generation system development. The MDD method is known to be service-oriented, and it automatically generates the output and program source from a design model. It helps understand the system better and secures quality, while making it easier to maintain and adjust it according to global standards.


I look forward to seeing how the companies going through or planning to conduct an upgrade toward post-next generation systems will consider the newest IT trends and market changes to lead the next decade

Written by Honggeun Kim, LG CNS

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