How SaaS helps banks navigate disruption and stay competitive 

Software-as-a-Service (SaaS) in banking is gaining momentum, and it’s clear to see why.  Banks are under constant pressure to modernize, stay competitive, and meet new regulatory demands.   

SaaS is emerging as the answer for those seeking the benefits of the cloud without the complexity of making such a transition. SaaS solutions are pre-built, ready to deploy, and managed, whereas cloud transitions often require a significant platform migration.  

Based on my conversations with banks, the shift to SaaS boils down to three factors:  

1. Predictable cloud adoption   

Banks recognize the benefits of the cloud, including cost and operational efficiencies, as well as agility. However, some have been hesitant to adopt cloud technology, primarily due to regulatory, security, and operational concerns.  

SaaS provides a structured path to cloud adoption, minimizing risk and accelerating modernization through standardized deployment models, established migration frameworks, and streamlined operations.    

2. Future proofing against tech disruption  

The financial industry is always evolving, with new technologies and business models emerging, such as AI and BaaS respectively. With ongoing upgrades to address the latest innovations and business models, SaaS clients always have access to secure and compliant technology without the need for cumbersome and costly migrations. They also benefit from access to the expertise and manpower required to deliver these advancements. 

3. Regulatory readiness   

Regulators are imposing stricter standards on resilience and security. Europe’s Digital Operational Resilience Act (DORA), which came into effect in January 2025, is a case in point. Regulation that aims to standardize IT operations, like DORA, is becoming as crucial as standardizing technology solutions.  

By adopting SaaS, banks are better prepared to address potential regulatory shifts, with automated and customizable compliance processes as well as enhanced security, among other supporting benefits.  

In a recent conversation I had with a Tier-1 bank, the executive told me that it’s easier for their bank to point regulators to a proven market product than something they built themselves. This made me realize that a similar shift could happen in IT operations.   

With technology disruption and regulatory change inevitable, banks are seeking solutions to navigate these shifts. For example, AI is a key focus today – presenting opportunities and challenges – as banks assess the impact of AI through both a strategic and regulatory perspective. 

 With software vendors like Temenos, which infuse AI into SaaS banking platforms, you can leverage new technology without taking on complex infrastructure. 

Stay competitive with SaaS  

Amid growing regulatory demands and rapid technological change, banks are re-evaluating their IT strategies. However, many find themselves caught between Tier-1 banks – with deep pockets and economies of scale to compete – and fintechs with no legacy systems holding them back.   

If you’re stuck in this gap, adopting a SaaS operating model that’s supported by pre-built, managed, and ready-to-deploy solutions can help to level the playing field, providing you with the same advantages that the larger players and more agile fintechs enjoy (such as a faster time-to-market and greater agility).  

So, by managing the disruptive forces of change, SaaS allows you to focus your resources on market opportunities, customer experiences, and business growth.