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How can Traditional Banks Improve Operational Efficiency?

Banks across the world are fighting to strengthen their positions. Digital transformation during Covid-19 has been essential. Banks all over the world have mastered some sort of digital sophistication over the last 12 months. While banks strengthen their digital offerings, operational efficiency is one of the areas that has also been in the headlines.

In February, McKinsey senior partner Katy George shared some of the challenges companies who are seeking for resiliency are facing.1 One of the important points that she highlighted was how the pandemic had: “demonstrated in the clearest way the direct connection between operational efficiency and economic prosperity”.

One area that, for many of the banks, is still a work in progress, is the customer experience throughout the whole digital banking journey. McKinsey highlighted this as an area to consider before the pandemic. They suggested that piecemeal productivity gains will not lead to significant bottom-line differences for banks.2

With this drive for efficiency, a lot of traditional banks are looking to emulate the approach to hyper-personalisation that Big Tech firms like Amazon, Netflix and Apple have used, successfully.

Although we may be a long way from this level of ‘hyper-personalisation’ when it comes to traditional banks, many of the fintechs are more successful in this space already.

One of the niche areas where traditional banks can use hyper-personalisation to greater effect is when looking at the revenues of their customers. Last year, we spoke to Ivan Dovica, one of the founders of Dateio, about how his StartUp is helping banks understand better the way they can personalise their offers to match customer behaviours:

Using the technology that fintechs like Dateio provide, banks can learn to more quickly and better anticipate what their customers need. It all sounds so simple.

What are Traditional Banks Doing About Hyper-Personalisation?

We spoke to Nanda Kumar, who has already navigated several digital revolutions, and has worked with banks across the world helping them with customer-centric software platforms and solutions. Kumar is the CEO of SunTec Business Solutions, the world’s #1 relationship-based pricing and billing company. More than 400 million end-customers benefit from SunTec’s solutions.

“Our first client back in 2000 was ING in the Netherlands. Today, we work with the Top 10 banks in the world. We have banking clients from Australia to North America including all the leading Indian banks.” Kumar shared. “Customer needs are constantly evolving.”

Kumar went on to explain how banks have had to evolve due to the evolution of customer needs: “The world has to come to them, rather than them coming to the world. We can’t take the bank to the customer. So we say to banks: ‘You keep all your core systems, we will help with intelligence to support them’.

“In our experience customers only worry about two things: What is the product or functionality you are delivering to me? And, how much does it cost? We help with the cost part of what customers worry about.”

Kumar points out some of the advances when it comes to engaging with customers and how using facial recognition by banks like HSBC has been a gamechanger in the digital approach taken by traditional banks.

While these initiatives show appetite to deliver products for customers which address both security and ease-of-access. Customers are also taking more care to protect their digital identity. Kumar believes that “When you adapt a manual system for a digital purpose this is where things can go wrong.“

“The correct strategy is really very simple. Anything and everything which can be completed by systems, complete with systems. Anything that needs humans, use humans for interface.”

Creating Value for Everyone you Interact with

A few weeks ago, in his 2020 letter to Shareholders, Jeff Bezos, Founder and Chief Executive Officer shared how:

“If you want to be successful in business (in life, actually), you have to create more than you consume. Your goal should be to create value for everyone you interact with. Any business that doesn’t create value for those it touches, even if it appears successful on the surface, isn’t long for this world. It’s on the way out.”

Kumar believes that Bezos concept is the ideal state one is looking for in any business. What SunTec does is go a little further and look at pricing.

“We start with value-based pricing. Value to every person, stakeholder or organisation you interact with. For instance, if the customer is not aware of prices in their market, you can choose what pricing to offer them. As an enterprise pricing master, our Xelerate platform complements core banking capabilities and enables contextual pricing.

“This gives banks a unique opportunity to provide value-based engagement and hyper-personalized services to empower their customers, help meet their short and long-term needs, and build and retain their loyalty and trust.” He concludes.

Banking as a Service

Over the course of 2020 the acronym for ‘Banking-as-a-Service’ or BaaS grew in popularity. #DisruptionBanking has been posting stories about this developing area of disruption since early 2020.3

While explaining how SunTec’s solutions help clients, it was necessary for Kumar to extrapolate a little about how his company operate as a BaaS provider:

“We know that everyone is moving towards banking as a service. One thing we need to remember is that banking and currencies are virtual by nature. And this commerce happens on the basis of trust.

“Successful banks are becoming more like technology development centres, and that is strategically easy for them to achieve.” Kumar explains.

“Regulation is meant to protect the customer, exclusively. There are benefits that customers are getting from within the app of a traditional bank. There is a convenience they are getting from the fintech app.”

Kumar goes on to point out how partnerships between traditional banks and fintechs are great examples of how to understand BaaS:

“There is a great example from a bank in India who did exactly that, partnered with a fintech who had a fantastic AI based system to integrate and identify people’s creditworthiness. It was designed for street vendors in Mumbai to help them finance bringing produce from the farm to the city. The fintech had stumbled onto a growth area, while for the bank, it was just corporate financing.”

“In the past,” Kumar explains, “It would have taken a bank many years to have the level of flexibility to partner with a fintech that we are seeing today. Ultimately it’s about one thing: ‘What is beneficial for the end consumer’.

When it comes to other Banking as a Service providers on the market, like Backbase, who are helping banks create a better digital experience for their customers. Kumar explained how SunTec’s solutions offer an area that these BaaS providers may not specialise in themselves, but they need.

“Most of them are taking some risk in their customer acquisition strategies. Losses are not unheard of. Which is where SunTec comes in. We can provide risk-based interest computation. We can provide risk pricing. So you can bring risk factors into your computation.” Kumar explains.

While these partnerships are growing, there is still concern about BigTech:

“While the fintech might be disrupting traditional banks, BigTech like Amazon and Apple can pretty much replace the entire banking system.” Kumar continues.“BigTech has the technology today to know your house parameters, they know everything you do through your phone. They are basically an intruder.”

How can Traditional Banks be Operationally Efficient like BigTech?

Amongst the companies in the market offering digital transformation tools, are companies that specifically look at revenues within their customers businesses. With BigTech firms, none of them are particularly concerned about which jurisdiction around the world they gain their revenues from, it is all about the system. Systems like the ones that SunTec offer.

“I spoke to one of my customers in North America recently, and he was telling me how he didn’t consider another bank as a competitor anymore. Today, his competitors are Apple, Facebook and Amazon.” Kumar shared. “With Fintechs this is different. Fintechs are talking about the customer centric hyper-personalisation. They can lend to a person whom a traditional bank cannot. In time, banks will either adapt their technology to compete better or partner with the fintechs. Ultimately the fintech is taking the risk, you can finance them, and have the revenue without taking the risk.”

Kumar explains how with Traditional banks, they have gained their customers’ trust already: “Now they are expanding their horizons and looking at open banking. Some of our banking customers are creating their own marketplaces for niche customers like artists or SMEs. Within these marketplaces customers are transacting on the banks’ platforms, just like Amazon has created with their marketplace.

“Customers have the ability to transact through the bank, the bank has already established trust, searching for goods or partners through their app is only the next natural evolution. They could even go on and take on an Amazon tomorrow.

“Wouldn’t you prefer doing all your transactions on one banking app rather than scrolling Amazon, eBay, Klarna and a whole host of other ecommerce sites?4 As long as the bank arranges the best price for you based on your earnings or your monthly budget. There is a strong argument that the future could evolve in this direction.” Kumar concludes, raising a very strong defence for traditional banks against the incumbent BigTech firms.

Software is everything 

“Because today hardware is done in software,” Kumar challenges, whilst raising the recent case of Apple’s M1 chip as an example:

Apple’s system on a chip (SoC) is revolutionary in itself, and quite a lot better than the next best Intel chip. Kumar explains how everything is designed by software, and how just like Apple, SunTec are focused on software.

Software runs through the organisations DNA.

The competition between BigTech and traditional banks is complex and multi-faceted. Whilst banks are learning to adapt to the new challenges, they need help with how best to use systems and software available to them on the market.

Software can help drive traditional banks to find more operational efficiency, which in turn will help them better compete with BigTech in the market.

Partnering with Cloud Providers

SunTec is pivoting their model almost completely onto a ‘Software as a Service’ (SaaS) platform. SunTec has invested to ensure that it’s platform is secure and compliant to meet the needs of our customers. Kumar explained how: “One of the biggest partnerships we are forming this year is with IBM. While our primary offering is in AWS and IBM FS Cloud, we work with Microsoft Azure and Google Cloud too. It is really important for us to work with these cloud providers, this helps us to be more resilient.”

This is a big investment into infrastructure for SunTec, but Kumar understands how banks need this level of support when working with companies offering solutions like his.

Just this March, SunTec announced how they were co-locating their Xelerate platform on IBM Z.5

Likhit Wagle, General Manager: Global Banking Industry at IBM, commented, “In the current low-interest-rate environment, Suntec’s Xelerate solution enables banks to generate additional income through sophisticated product bundling and pricing. In a competitive marketplace, the combination of the functionally rich Xelerate suite and the robust IBM Z offers unparalleled performance and security levels. Co-locating Xelerate platform running on Red Hat® OpenShift® side by side with core banking workloads on the same IBM Z or IBM LinuxONE server is going to be a game-changer for large banks on their digital transformation initiatives.”

And this is just one of many innovations that Kumar has been driving within SunTec.

No Code Development Platforms

You may have come across the term “citizen developer” over the last few months. In January, Jennifer Cadence, Product Marketing Manager at Google Cloud mentioned how “hundreds of thousands of apps were built this year by non-technical ‘citizen developer’ app creators from around the globe.”

In her post, Cadence highlights some of the ways no-code application development has become an important part of digital transformation. One of them stood out:6

“It allows people to build applications and process automations without coding and therefore opens up innovation to a wider range of employees.”

Cadence concludes with how she believed that: “Analysts agree Gartner’s October 2019 report ‘The Future of Apps Must Include Citizen Development’ indicated that by 2023, ‘the number of active citizen developers at large enterprises will be at least four times the number of professional developers.’”

Kumar shares how SunTec’s Xelerate is a no-code platform, how it’s built to operate and collaborate effectively in multi-application, multi-cloud ecosystems: “We need to keep ourselves agile in the marketplace and be unique in our proposition.”

“Our platform can be adapted to any industry, because ultimately what we are looking at is: What is the value we are giving to the customer? How can we empirically compute that? And help you be agile in your marketplace.”

Signs would suggest that SunTec are certainly embracing the best solutions available to their global banking customers.

The future is operational resilience, and now the future is also operational efficiency.

This article was originally published in Disruption Banking, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’.

Sources

1McKinsey
2McKinsey
3Disruption Banking
4Disruption Banking
5Disruption Banking
6Google Cloud

Why It’s Time to Retire the One-Size-Fits-All Approach to Banking

Thanks to the COVID-19 pandemic, the Internet and anything digital has made deeper inroads into our lives and demand for digital banking services has accelerated manifold. Customers expect to be able to access up-to-the-minute and relevant information on their finances. Gone are the days where a banking customer will patiently wait multiple days for a transaction to process. This in turn has put immense pressure on banks to deliver real time and personalized services. How can banks address this challenge and make this a win-win for all?

Make the Most of the Core

Core banking systems handle a high volume of transactions and must function without interruption, as outages can mean regulatory issues, customer dissatisfaction and significant revenue and reputation loss. Large and small banks around the world are currently spending millions of dollars to maintain their core banking systems. The core is meant to be a system of record but has been stretched over the years to do more. It now delivers additional capabilities, but it often also acts as a bottleneck for banks due to its lack of agility and flexibility.

If banks want to deliver a new level of customer-centricity and personalization, they must strategically analyze what applications directly impact their customer and lift those out of the legacy core. In short, they must ‘hollow out the core’ so these applications sit in a digital layer above it, a layer that is intelligent, prescriptive and forms the bridge between current customer-facing capabilities and the legacy core. Introducing this type of middle layer will allow banks to simplify complex operations and infrastructure, embrace intelligent technology and forge partnerships that create the right service bundles for their customers. It will also allow them to understand how to leverage customer data to offer service-first models, stop looking at the legacy core system as a hindrance and identify ways to maximize the core to their advantage.

Say Goodbye to Large ERPs and End-to-End Systems 

Technology innovations continue to impact the banking landscape with platforms, products and interoperable point solutions created to address specific customer needs. That will only continue as banks are forecast to spend 11.4 per cent more on enterprise software in 2021.1 More banks will turn to digital operations platforms (DOP) that combine back-office business tools into a single product and are viewed as a replacement for legacy enterprise resource planning (ERP) software. New DOP offerings will become AI-based and ecosystem-oriented, tailored to industry and even micro-vertical use cases and requirements.2

Agreement from all levels (especially the top) is imperative if banks want their legacy system upgrades to be successful. This type of holistic buy-in and commitment is a must for such a significant transition – or else banks risk wasting their investments and damaging the customer experience. The foundation of any change must be focused on data, analytics and technology, but the human element cannot be ignored. Banks must augment legacy skillsets with fresh skills as they go digital and adapt to today’s fast-changing environment.

Build Ecosystems and Embrace Personalization

Customer retention and trust are key to any bank’s overall success, but customer loyalty is fragile. Banks must therefore create ecosystems that provide value-based engagement and hyper-personalized services, empower their customers, and help meet their short and long-term needs to build and retain their loyalty and trust.

Banks can no longer afford to neglect their customers’ changing preferences. The post-pandemic world will force banks to remember the value of face-to-face service. For many, in-branch banking will play a pivotal role and will remain an important vehicle for banks to attract new customers, retain existing ones and engage more deeply with them. Bank branches are therefore likely to become experience centers like Apple Stores, offering a place for customers to explore products and services, and to solve more complicated banking problems.

These types of physical experience centres will offer customers the access they desire while also allowing them to perform their banking functions and transactions digitally via their mobile phones, tablets or laptops as they wish. Whether they opt for the physical or digital realm, customers want to be certain they will enjoy an enhanced level of security, comfort and confidence, especially when it comes to financial issues that can be complicated, highly sensitive or both.

Banks and financial institutions have already started to separate their external presentation layer from their back-office data layer to create enhanced digital consumer experiences. Take for example the collaboration Google has created with several financial institutions. Slated to roll out this year, Google Pay will launch its “Plex” bank accounts in partnership with 11 banks and credit unions in the United States – offering Google users an attractive chance to open checking accounts with traditional, trusted financial institutions.3

The concept of a bank has evolved past mere payments and transactions; it now represents so much more, including mortgages, education and healthcare. Future banks must also evolve to offer more than just financial products and embrace, build and orchestrate ecosystems and support integration with fintechs and other “non-banks.” If banks can build this type of integrated/ hybrid banking model, they will be able to move beyond pure-play banking and into needs-based banking – making the one-size-fits-all template redundant.

Banks must treat the customer as their guide to ensure they are successful and add real value throughout their digital journey. If they can evolve past traditional customer service models and adopt an empathetic mindset, they can fundamentally transform their offerings to deliver truly differentiated customer-focused services.

This article was originally published in Bankless Times, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’.

 

Sources

1Gartner
2Forrester
3Google Blog

What were the Biggest Takeaways from SunTec Confluence 2021

This year’s SunTec Confluence was online. The last event was in 2019, when  the event was held in Dubai at the prestigious Palazzo Versace with keynote speakers including Chris Skinner:

SunTec Confluence is an annual symposium which brings together the world’s leading technology executives and investment experts to debate current trends and to discuss how organisations can leverage technology to deliver more value to their customers.

This year marked the event’s tenth anniversary and the focus was on customer-centricity, accelerated digitisation, hyper-personalisation and the environment.

The event took place during the same week as Collision 2020 and Fintech Week Tel Aviv which raised the bar higher than normal.

Value Creation in a Turbulent World

Nanda Kumar, Chief Executive Officer of SunTec, kicked off the event with a fireside chat alongside Tony Zerucha, Managing Editor of Bankless Times. They discussed how the COVID pandemic had accelerated digital transformation. And regulation.

Kumar shared his philosophy with viewers during the chat: “You have to create more value than what you consume. And everyone who is in touch with your business has to receive value from their contact.” He went on to explain how this fundamental philosophy was particularly apt during the turbulent times of the last 12 months.

Kumar has some excellent examples about customer-centric business models. Apple is a company he particularly admires. He is also focused on setting short and medium term digital transformation goals, which he explained in more detail during the chat.

The New Goal Post for Digital Transformation – Customer Experience Transformation

An early session on the changing goalposts of digital transformation explored the challenges faced by many traditional financial institutions. How they are seeking to put the customer at the heart of digital transformation.

The panel was made up of James Fowle, Executive General Manager at the Commonwealth Bank of Australia, Steven Reiter, Lead – Business Consulting Practice for Financial Services at EY, and Soneel Raj, Global Head of Banking, Strategy and Solutions at Cognizant. Satish Chandran, President and Global Head – Demand Fulfilment Group, SunTec Business Solutions, moderated the panel.

The speakers all agreed that a top-down approach and commitment to cultural change throughout a company was a key component of successful digital transformation.

Reiter underlined the importance of compliance in the U.S. under the new Biden administration and highlighted that regulators are often more sensitive to GDPR and customer data than customers themselves.1

Fowle commented how the last year had accelerated digital transformation for the bank’s staff and employees. Customers who were resistant to change historically, have now learnt to interact digitally with financial institutions. “This virtual contact is here to stay. Customers will stay in the digital world they have embraced.“2

Raj commented how banks in the U.S. have realised how most of their customers have not visited their retail branches in over 10 months. And on the back of that revelation he suggested that banks need to ask themselves the following question: “Am I spending where I will have direct client impact?” It’s all about the experience your client will be delivered. The skills we need now to create this personalisation. Raj concluded by asking whether we have the employees to do it?

Creating the Cognitive Bank

The IBM Break-out session started with a small video explaining IBM’s LinuxONE enterprise platform. Likhit Wagle, General Manager, Global Banking Industry at IBM kicked off the discussion by explaining how banks had performed during the pandemic.

Despite the doomy post-pandemic predictions, economies in Asia are bouncing back and U.S. investment banks have recorded hugely impressive results in 2020 and this year so far.

Europe’s growth rate was described as showing ‘’pedestrian growth’’, banks were already struggling in Europe before 2020. The atmosphere in Europe will be more challenging than in other parts of the world during the next 12 – 24 months.

The panel went on to discuss the success of FinTech companies like Stripe, PayPal and Square, whose market capitalisations have all moved above that of incumbent financial institutions such as Goldman Sachs. Their success can be boiled down to 3 main ingredients: convenience, complete service and instant fulfilment.

In order to stay ahead of the game, banks need to switch their focus to front-office customer interactions and aim to match the higher expectations set by Amazon and other Big Tech firms.

What Does a Conscious, Creative, Connected Future Look Like?

Mark Stevenson, Advisor, Author and reluctant Futurist, concluded the SunTec Confluence event.

“Real change is afoot. The dose of reality we have all received has just exacerbated what we already knew before COVID.”

Great companies can thrive in a crisis, Stevenson argued, but only if they ask themselves the right questions. Are we being good ancestors? How can we use technology to solve the pressing issues of our time?

Stevenson concluded by talking about the 17 Sustainable Development Goals (SDGs) we all heard about in January. He challenges the audience to ask themselves where they will invest.3

“Technology is not the answer, Technology is part of the question. Given these tools you will be given by companies like SunTec, what will you do with them?”

“It’s time to be conscious, it’s time to be creative, it’s time to be connected.”

Although COVID did not lead to a bank crisis like we saw in 2008, something resonated from the SunTec event. It won’t surprise you to learn, that the successful bank of the future will follow Amazon and Apple’s lead to ensure customers receive a hyper-personalised experience where all their needs are met.

Interview with Nanda Kumar, Founder & CEO, SunTec

Established in 1990, SunTec is a global leader in the provision of revenue management, relationship-based pricing and billing. As an enterprise technology company, we work closely with over 130 high-profile companies, mainly banks. Our aim is to help these organizations develop enterprise capabilities so that they can deliver a personalized experience to their customers that enriches and strengthens their relationship with their consumers.

We work with seven of the top 25 banks in the world (by assets), one of the world’s top three travel companies and one of the largest international communication service providers. In the Asian markets we work with more than 50 financial institutions that use our Indirect Taxation solution. Our clients together handle more than three billion transactions every day, and we have offices in the US, the UK, Germany, UAE, Singapore, Canada, Australia and India.

When I first started this company, it was to predominately address the technology needs of India’s telecom industry. But as the internet started to make deeper inroads into our lives, SunTec underwent a complete shift growing from being a small telecom start-up to a multinational business technology company with customer-centricity at the heart of its ethos. SunTec then entered the financial services market in the year 2000, with a specific focus on banking to provide a value-driven, customer-centric pricing model to help banks transfer trust, convenience and security in a digital setting.

We want banks to evolve with the times and live on just as we humans do. If you look at the physiological process, the way for instance blood flows and is distributed through the entire system is fascinating. Various systems like the cardiovascular system ensure that the human body has good distribution of energy.

Similarly, in an organization the business value must be adequately captured and distributed through the entity. What would happen for instance in an Amazon situation if customers returned their products and the system did not complete the cycle with the manufacturer? There would be complete chaos not to mention financial losses. If you look at a business like this fundamentally there is value creation and value redemption happening seamlessly.

Therefore, at every stage of the process in a company, there must be value exchange to make the process smooth and seamless and the ultimate test of this value is when a customer buys a product or service which is a realization of the true value.

Our vision as a company is to be at the heart of every value exchange that takes place in the digital economy. We want to be facilitators and enablers.

Tell us about your new Client Advisory Board

Across diverse industries, there is a clear recognition now of the importance of driving customer-centric innovations throughout the value chain. Our vision for the SunTec Client Advisory Board (CAB) is to build a platform for further collaboration among global banking, insurance, telecom and travel industry leaders.

The inaugural board has members from ABSA, Bancolombia, Comcast, Commonwealth Bank of Australia, DBS Bank, First National Bank, Global Business Travel, Goldman Sachs, Kotak Mahindra Bank and Nordea Bank. The Board is scheduled to meet with SunTec twice a year to discuss and develop new technology solutions for the future and help shape what products businesses need to enable further growth and development.

Through this platform, we want to be able to empower each other to stay ahead of the market through a strategic alignment of our respective businesses.

What can we hope to see from SunTec in the future?

Now that we’ve established ourselves in the telecoms, banking and travel industries, SunTec is currently focused on expanding its offerings to other industries as well. This is part of the company’s next phase of growth. We believe that in the fullness of time there will be a convergence of industries because of business opportunity, market dynamics and customer demand and we are best positioned to enable value exchange in this scenario.

This article was originally published in Tech Round, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’

Preventing Remote Workers from Feeling Isolated

A global study by IBM last year – during the peak of the pandemic – found that there was a huge disconnect between what executives thought about how their employees were coping while working remotely, and how employees felt.

For working professionals, the greatest legacy of the Covid-19 pandemic is a universal acceptance of working remotely or from home. This acceptance was however forced upon organizations and their employees and thus has taken a toll.

Remote working has traditionally been alienating for employees even before the pandemic struck. A pioneering two-year study by Stanford professor Nicholas Bloom, published in 2015, found that more than half of remote working volunteers of a large company – those who took the option to work from home — changed their minds about permanently working from home, as they felt significant isolation. Several other studies since have corroborated this finding. We are social animals as a race!

If loneliness and isolation are such powerful triggers, what did organizations do to mitigate these, especially in the wake of the pandemic that forced all of us to work from home? On the surface, it appears that many organizations were not even aware of the magnitude of the problem. A global study by IBM last year – during the peak of the pandemic – found that there was a huge disconnect between what executives thought about how their employees were coping while working remotely, and how employees felt. While 80% of employers thought that their organization supports the physical and emotional health of their workforce, only 46% of employees thought so. 74% employers said they believed that the organization is helping staff learn the skills needed to work in a new way (remotely), whereas only 38% employees believed so.

Still, many organizations recognized early on that mandatory working from home for a prolonged period is problematic. For instance, providing mental health counselling and wellness sessions with qualified experts is an important aspect to prevent people from feeling loneliness and isolation. Employees should be encouraged to take small breaks during working hours to avoid feeling fatigued and also to refresh their minds. The leadership team further proactively suggested availing ‘from anywhere option’ or to plan short vacations.

A steady check on the health and wellness of employees through anonymous surveys were done and the results were gratifying – in a recent survey, over 80% of our people said that they are fully motivated to start work every day, while more than half said that their work arrangements are flexible and helpful to manage their other priorities in life. Importantly, only one in five respondents said they felt stressed.

There are many organizations who have taken similar proactive measures – Gitlab adopted “virtual coffee break” sessions on video calls where employees can connect virtually to take breaks and socialize- like water cooler breaks in an office setting. Basecamp has dedicated social media channels where no work-related discussions are allowed; topics are focused on food, sports, pets and humor. The channels are also free from talk about the pandemic.

Other companies have hosted virtual book clubs, team-bonding movie nights, virtual pizza parties or remote happy hours where employees dial in and share a cocktail over Zoom or Skype. Importantly, all these activities take care to avoid any work-related discussions, sometimes even going as far as avoiding any pandemic-related discussions.

In general, several experts agree that any action plan for managers to beat loneliness and isolation must include regular check-ins by team leaders via group or 1:1 video calls to get a sense of how they are doing. Other best practices include prioritizing relationships and personal bonds, being better at communications and setting clear and explicit expectations for remote workers.

Finally, now that the pandemic is on a decline in India and the vaccine roll-out has also begun, the question is moot if we will see employees returning to offices in full strength in the near future. A majority of businesses are likely to allow remote working for at least some of their employees for few days every week – and the likes of Siemens, TCS and Infosys have announced this publicly. In other words, the pandemic may go away soon, but remote working or work-from-home is going to stay. Leaders of knowledge-based industries like IT in particular have to be careful to manage the imminent mix of onsite and remote workers as transparently and fairly as possible, without losing overall sight of productivity and results.

More pertinently, a 2017 study by Harvard Business Review revealed that lack of close contact with people inhibits the formation of trust, connection, and mutual purpose — three ingredients of a healthy social system. And herein lies a key test for businesses as they transition from 100% remote working to 60% or even 40%, can they ensure that those choosing to continue working from home are included in the mainstream?

This article was originally published in People Matters, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’

How Relationships Help Banks Revive In Post-Covid Days

The current financial market calls for the shift to a technology-powered business model.

Banks worldwide continue to grapple with the business pressures arising on account of the pandemic. According to Bloomberg’s 2021 Central Bank Guide, central banks are likely to continue with relaxed policies and lowered interest rates in 2021 in response to the Covid-19 related slowdown. While no European or American bank is expected to increase interest rates, central banks in India, Mexico, China, and Russia are expected to further lower their rates.

Even before the pandemic, banks were already operating in a complex market characterized by increasing competition from fintech and technology giants, eroding customer loyalty, and increasingly stringent regulatory frameworks. Now, they must also contend with lowered interest rates and the possibility of loan defaults, reduced lending, and significantly lowered payment transaction volumes, thanks to the pandemic. Between 2020 and 2024 they are expected to lose $1.5 trillion to $4.7 trillion in cumulative revenues. As their revenues and profitability take a hit, banks must fast-rack their digital transformation efforts and take a second look at their pricing strategies to maximize revenue generation.

Most traditional banks followed a flat pricing structure, or at best leveraged simple customer clusters like geography as a basis for their pricing strategies. But the uberization of services has left no sector untouched, banking included. No longer content to be relegated to the periphery of the banking system, modern customers expect a far greater degree of personalization when pricing. And they are not afraid to shift loyalties if their expectations are not met. At this juncture, when the macro environment is fraught with risks, banks must focus on a customer-centric revamp of their pricing approaches. Effective pricing of services is directly proportional to top-line growth, and research shows that even a 10 per cent increase in price can increase profits by 25 per cent.

Data Holds the Key to Effective Pricing

Despite the challenges facing traditional banks, they still have a few key advantages. After decades of operations, most traditional banks now have an incredibly vast and deep repository of customer data. This is an invaluable asset for banks trying to move to more customer-centric models. Customer data forms the basis for smarter and more effective pricing strategies.

Relationship-based pricing models put the customer at the heart of the business. By analyzing data across touchpoints, these models provide a holistic insight into the customer relationship and a deeper understanding of customer engagement across the system. This then forms the basis of a value-driven, focused, and customer-centric pricing strategy.

For example, a bank can base its pricing on a combination of different parameters such as the overall business relationship, the type of services available, and even ancillary services that may prove beneficial to the customer. A centralized relationship-based pricing framework also helps financial institutions navigate internal organizational hurdles such as product or information silos. It can also help identify and develop new innovative products and revenue streams and optimize the true profit potential of their digital channels.

Cementing Customer Relationships

Traditional banks still enjoy significant customer trust. And an effective relationship-based pricing strategy can help banks build on this to drive greater loyalty and satisfaction. After all, the cost of acquiring a new customer is far greater than the cost of retaining an existing one. A greater understanding of customer engagement and behavior will help banks create focused bundling options, hyper-personalised offers, and value-added services. They can reward customers for loyalty with attractive offers and even offer prices proportional to the customer’s potential to generate revenue. An effective relationship-based system must even be able to automatically detect a change in the customer lifecycle stage or commitment level and re-price the transactions as per established rules. Customer loyalty and retention are crucial to survival, and even growth in the current market context and relationship-based pricing models are essential for driving greater loyalty.

The Technology Foundation for Relationship-Based Pricing

Of course, such pricing strategies need a solid technology foundation to be implemented. If banks are to leverage their data to refine their pricing approaches fully, then they must consider adopting advanced data analytics platforms, and artificial intelligence powered solutions.

Legacy banking core infrastructure cannot support such cutting-edge technology. And modernizing the core is not only time and cost-intensive but also risky given the vast amount of sensitive data it holds and the stringent regulatory environment that banks operate within.

Banks can consider deploying middle layer platforms that can sit on top of their legacy cores and support advanced analytics platforms, as well as products that can automate pricing processes. With effective pricing solutions, banks can create contextual strategies and models, improve governance, and enhance revenue generation. By automating pricing processes, such solutions can help drive better agility and manageability and ensure seamless auditing.

The current financial market situation is not as dire as it was during the recession of 2008. But it is still serious enough for the banking sector to consider alternative and more effective revenue generation models. Now is the time to make the transition to a technology-powered customer-centric business model. While most traditional banks have already embarked on their digital transformation journeys, they must now speed up technology adoption to enable relationship-based pricing strategies. A greater connection with customers via hyper-personalized offerings and deeper customer loyalty are the keys to a faster recovery in the post Covid-19 era.

This article was originally published in Outlook Money, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’

Banking-as-a-Platform: Delivering a New Era of Customer Experience and Value

Only a year ago, few of us could have predicted the significant impact COVID-19 would have on the global economy and the disruption it would wreak on our daily lives. Now that there is light at the end of the tunnel, it’s important that we focus not solely on the pandemic’s negatives but rather examine the opportunities that it’s afforded banks to add new and real value for banking customers.

Every business needs a banking service. If banks can make those services as frictionless and “as a service” as possible, they can seamlessly meet a key customer need: the provision of hassle-free, easy banking. The pandemic may have forever altered the bank’s traditional relationship with its customers, but it has also opened doors to empathetic, value-based banking. It has forced banks and their customers to adapt quickly to newer ways of interacting with each other instead of depending purely on the traditional physical approach.

During such times of uncertainty, customers often rely heavily on their financial institutions to help them navigate the landscape and ensure their financial security. But if financial institutions aren’t sensitive to their customers’ needs during such times, they risk losing them to banks and other providers that are more in tune with the evolving needs of the end consumer. The opportunity is ripe for banks to pivot their range of services, earning their customers’ loyalties by providing tailored solutions that are easy to access, and to deliver a new level of experience and value.

That said, banks cannot build every single product and service required to solve customers’ broader challenges themselves. What they can do is streamline the process and end-user experience by partnering and collaborating with institutions within the financial-services industry and beyond. This forms the essence of platformification: a single platform that solves a specific problem for a customer by integrating services from banks, fintech (financial technology) companies and “non-banks”. Banks are uniquely positioned to map a customer’s end-to-end journey and effectively knit together an ecosystem of partners that will further enrich the customer journey.

Demystifying Banking-as-a-Platform

Technology has drastically changed customers’ expectations and how their needs are met. With banking-as-a platform, banks can focus on their core capabilities—designing and delivering banking products and services—while leveraging a software/technology partner’s expertise, functionality, infrastructure, platform and scale. This means less time and cost to develop those products and services and also offers relationship managers a 360-degree view of the bank’s customers. All of this can be achieved by simply installing a common platform across most products and services.

Honing the Art of Alliances 

Advances in technology will always produce a corresponding evolution of customer preferences, and the pandemic has significantly changed customer behavior within online channels. We expect platformification to become more relevant this year, particularly as customers seek additional credit and flexible payment options and as brands promote financial wellness, given the macroeconomic circumstances.

A good example is the partnership between popular online furniture store Wayfair Inc. and Citigroup Inc., which have launched co-branded and private-label credit cards to offer seamless financing options to their US customers.1 Another is the partnership between Chase Bank and American Express.2 With fewer people dining out during the pandemic, these companies collaborated to offer bonus rewards for food-delivery services. With the surge in e-commerce due to ongoing restrictions, private-label credit cards will continue to grow in number as the demand for online shopping and food delivery continues to soar throughout 2021.

Moving forward, financial institutions may separate their external presentation layer from their back-office data layer to create enhanced digital consumer experiences. This trend is already gathering steam with the collaboration between Google and several financial institutions. Slated to roll out this year, Google Pay recently launched its Plex bank accounts in partnership with 11 banks and credit unions in the United States.3 The service will give users a chance to open digital bank accounts with traditional, trusted financial institutions.

Payments processor Stripe Inc., which aims to be the internet economy’s financial supermarket, recently announced that it would team up with leading US banks, including Goldman Sachs Group Inc.4 and Citigroup Inc. Stripe will soon give its customers the option of offering insured, interest-bearing bank accounts, debit cards and other cash-management services to merchants and vendors that do business with Stripe’s customers. Stripe’s customer Spotify will begin offering the service to its merchants early this year.

Banks need to take the lead in embracing innovation and collaborate with other industry players to unlock the power of their respective ecosystems, deepen their existing relationships and design ways to serve a new generation of customers.

Taking the Lead on Delivering a Value-add Experience 

Uber is an excellent example of how institutions should “ideally” interact with their consumers. When an individual books a car, his or her main purpose is to get from point A to point B. Historically, a customer would worry about the route and how to pay the driver at the end of the journey. Uber translated this challenge into an opportunity by ensuring that once a customer books a cab, he doesn’t have to worry about other aspects, such as navigation or payment—the Uber platform does all that.

Uber set its wheels in motion by bringing new specialist partners on board to help the company integrate each of these specific needs. By collaborating with such partners, delegating operations and creating a customized service for its consumers, Uber built a platform that instantly appealed to the public. And as its customer base grew, the company collected more and more data about their preferences and gathered insights into what additional services would benefit them. This eventually helped Uber venture into other areas and launch Uber Eats, Uber Business and Uber Health, among others. Without owning a single “asset”, Uber provided its customers with the easiest and simplest travel solutions while revolutionizing the transport industry. This “uberization” has allowed Uber to pivot the customer-experience model by not just collecting—but strategically using—consumer data. Uber developed the confidence to increase its customer offerings. All it took was the right platform.

Striking the Correct Balance 

To create the most successful business model, banks must realize that the end customer is not their only important stakeholder. The ecosystem that provides these customized products and services to consumers and the multiple business partners included in it also do their part to ensure a flawless customer experience.

Banks now need to strike the right balance between their customers and their partners to drive additional value. Successfully curating an ecosystem of partners is critical to knitting together a seamless customer journey. As more and more banks and companies create their own ecosystems, we will soon reach the point at which one ecosystem collaborates with another to create a web of services that will add intrinsic value for the consumers within those ecosystems.

Banks can no longer afford to merely design products and services that meet today’s customer needs; they must radically innovate and transform for the future. Customers have become accustomed and are increasingly loyal to service providers that solve a broader spectrum of their needs. That means banks of today must embrace a cultural and mindset shift and transform to adopt a more platform-centric approach that allows them to solve broader lifecycle needs and deliver experiences that customers truly value. This choice will enable banks to evolve toward collaborating with a host of partners and create broader ecosystems. Banks that fail to shift gears soon enough will run the risk of being left behind—with little opportunity to catch up.

This article was originally published in International Banker, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’

Sources

11Citi Group
2CNN Underscored
3Google Blog
4Stripe

Syncing Traditional Banks With Their ‘Challengers’

Traditional Banks and Smaller ‘New-Age’ Banks have Much to Gain by Joining Hands

The emergence of challenger banks over the last decade has changed the banking landscape significantly. Challenger banks are comparatively small retail banks that have emerged thanks to newer regulations that facilitate open banking. They typically operate in areas underserved by traditional banks and leverage technology to deliver a level of hyper personalised services that the traditional banking sector is unable to.

MyBank, WeBank, PayTM are some examples of challenger banks that have changed the name of the game. This fast growing space is expected to reach $356 million by 2025. So does the emergence of challenger banks necessarily mean the end of the older banking structure?

The ‘Challenger’ Model

Challenger banks start by focusing on a single product and then branch out to other offerings and services. They keep operating costs at a minimum which allows them offer services to customers at significantly lower price points than traditional banks. Today digital savvy youngsters carry out routine transactions with a challenger bank without ever having to step into a physical branch. Despite their success, challenger banks are still trying to figure out the best way to capture a small segment with a different value proposition and still scale.

Despite growing popularity of challenger banks, traditional banks aren’t really losing large numbers of customers. Even now, most people choose to continue with core banking services like savings and investment at traditional banks while using challenger banks for others. Traditional banks enjoy a large amount of customer trust, especially for large financial commitments such as home loans.

Additionally, services like overdraft which still hold value with businesses and households are not available with the new players.

It is time for traditional banks to step-up the digitisation drive and move to customer centric business models. With the right digital infrastructure, along with customer trust, they will have a distinct advantage over newer entrants.

Currently, they must focus not only on technology powered transformation to retain and grow their customer base, but must also re-establish their work-culture to attract the best talent to optimally use the new-age technologies.

To leverage technology, traditional banks must first abandon the idea that mobile apps are the only construct of digital transformation. They must instead begin by overhauling their systems, processes and even core banking strategies to put the customer at the heart of everything they do. Technology is the tool with which they can deliver the seamless personalised customer centric experience.

Banks must leverage customer data they hold to provide contextual and personalised customer experience in every product and service they offer. The focus must be on providing customers a seamless and personalised experience across all channels including, ATM, branches, website, mobile app, and other touchpoints. Even physical branches can be modernised using technologies including, robotics, Virtual Reality, Augmented Reality and AI.

Symbiotic Partnerships

Access to capital is a significant challenge for new-age banks. The pandemic has impacted venture investments in riskier assets affecting plans to scale up their business. This opens opportunities for symbiotic relationships between traditional banks and challengers. Traditional banks can invest in or acquire challenger banks based on their business synergies. This will help challenger banks with capital needed to grow and give them access to a deeper customer pool. The technology prowess of the challenger banks will help traditional banks digitise their business.

Symbiotic partnerships like this are already in play. Open banking regulations across the world will pave way for many third-party developers to build applications and services around banking customers. Banks can look out for many collaboration opportunities in the new scenario.

While government measures like the Jan Dhan Yojana have helped about 80 per cent of the population into the formal banking system, there is room for more.

The Bank-Fintech partnership can help further the financial inclusion and digital payment agenda in India. Small finance banks enjoy the trust that fintechs need, while FinTech’s digital capabilities help users bank from anywhere on any device. Their easy systems and processes will make the experience of opening and managing a bank account much easier for an illiterate and remote population.

Partnerships like this are already underway. For instance, PayTM Payments Bank recently partnered with Suryoday Small Finance Bank to facilitate low value fixed-deposit services to its account holders. By partnering with fintechs, traditional small finance banks can help further their financial inclusion agenda.

By collaborating, the traditional banks and challengers can prepare for a new post-pandemic ‘no-touch’ economy fuelled by services that deliver hyper-personalised customer experiences across multiple channels.

This article was originally published in The Hindu Business Line, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’.

Hybrid Banking: Customers and Tech Take Center-stage

In the recent past, when a consumer completed a banking transaction it could take up to five days to show in their bank account—and that was perfectly acceptable. Flash forward to today when the internet has made deeper inroads into our lives and the demand for digital banking services has significantly increased. Customers now expect up-to-the-minute information about their finances. Thanks to the digital services these customers enjoy in their daily lives from the likes of Apple, Amazon, Netflix and Spotify, they also expect the same type of seamless and frictionless banking experience.

There is no doubt that the COVID-19 pandemic has upended societies across the world and the new era of omnichannel banking has put immense pressure on banks to deliver an integrated and personalized customer experience. That means they must re-assess their existing systems and capabilities to deliver true integrated banking with a human touch.

Maximizing the Core 

Core banking systems handle a high volume of transactions and are expected to function without interruption, as outages can mean regulatory issues, customer dissatisfaction and significant revenue loss. Banks around the world, both large and small, are now spending millions of dollars to maintain their core banking systems. The core is meant to be a system of record but has evolved over the years into something much more critical. While it’s true these systems now deliver additional capabilities, they often also act as a bottleneck for banks due to their lack of agility and flexibility.

Banks can maximize core systems and deliver a new level of customer-centricity if they strategically analyze what directly impacts their customer and lift those applications out of the legacy core. In other words, ‘hollow out the core’ so these applications sit in a digital layer above the core. This digital layer is intelligent, prescriptive and forms the bridge between current customer-facing capabilities and the legacy core. If banks introduce this type of middle layer, they will be able to simplify complex operations and infrastructure, embrace intelligent technology and forge partnerships that create the right service bundles for their customers. It will also allow them to understand how to leverage customer data to offer service-first models. By doing this, banks can cease looking at the legacy core system as a hindrance and identify ways to maximize the core to their advantage.

Understand that the World of Large ERPs and End-to-End Systems are Over

Technology innovations have disrupted the banking solution landscape with platforms, products and interoperable point solutions that are well placed to address specific customer needs. That will only continue as banks are forecast to spend 11.4% more on enterprise software in 2021.1 More banks will turn to digital operations platforms (DOP) that combine back-office business tools into a single product and are viewed as a replacement for legacy enterprise resource planning (ERP) software. New DOP offerings will become AI-based and ecosystem-oriented, tailored to industry and even micro-vertical use cases and requirements.2

If banks want their legacy system upgrades to be successful, there must be agreement at all levels—starting at the top. Without holistic buy-in and commitment for such a significant transition, banks risk pouring investments down the drain and further damaging the customer experience. There is no doubt that the foundation of any change must be focused on data, analytics and technology, but the human element cannot be ignored. As more banks adopt digital, they will need to augment legacy skillsets with fresh skills to adapt to this fast-changing environment.

Orchestrating Ecosystems and the Rise of Personalization

Customer loyalty is fragile, and customer retention and trust are key to any bank’s overall success. This gives banks a unique opportunity to create ecosystems that provide value-based engagement and hyper-personalized services, empower their customers, and help meet their short and long-term needs to build and retain their loyalty and trust.

Banks cannot afford to neglect their customers’ changing preferences anymore. As they adjust to the post-pandemic world, banks must remember the value of face-to-face service. In-branch banking will continue to play a pivotal role for many people and will remain an important vehicle for banks to attract new customers, retain existing ones and engage more deeply with them. We see bank-branches becoming experience centers like Apple Stores, offering a place for customers to explore products and services, and to solve more complicated banking problems.

Customers want to have access to these types of physical experience centers while also being able to perform their banking functions and transactions digitally via their mobile phones, tablets or laptops. With both the physical and digital realm, customers want to know that they will have an enhanced level of security, comfort and confidence, especially when it comes to financial issues that can be complicated, highly sensitive or both.

Banks and financial institutions have already started to separate their external presentation layer from their back-office data layer to create enhanced digital consumer experiences. One good example of such a trend is the collaboration between Google and several financial institutions. Slated to roll out this year, Google Pay is all set to launch its “Plex” bank accounts in partnership with 11 banks and credit unions in the United States.3 This service gives Google users an attractive chance to open checking accounts with traditional, trusted financial institutions.

The concept of a bank is no longer about mere payments and transactions but represents so much more – think mortgages, education and healthcare. Banks of the future need to go beyond providing just financial products. They must embrace, build and orchestrate ecosystems and support integration with fintechs and other “non-banks.” By building an integrated (hybrid) banking model, banks have a significant opportunity to go beyond pure-play banking and into needs-based banking, making the one-size-fits-all template redundant.

Essentially, if banks want to move the needle as they set out on their digital journey, they must treat the customer as their guide. That means they must go beyond traditional customer service models and adopt an empathetic mindset that will truly drive their customer-focused activity.

This article was originally published in Financial IT, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’.

Sources

1Gartner
2Forrester
3Google Blog

India’s Banking Sector is Staring at Another Cycle of Creative Destruction

Back in the 1990s as India’s economy began taking off following the liberalization, the banking sector had responded by giving birth to a new league of private banks.

These young startup banks quickly began taking market share away from the incumbents, largely by delivering to their customers innovative products and unexpectedly high levels of customer service. In the end, it only took about a decade for these startups to dethrone the incumbents and emerge among the largest banks in India in terms of market capitalization.

Three decades later, the question is moot if we are about to witness the same cycle of creative destruction repeat itself. The leaders of today along with the legacy players face a growing threat from a new generation of innovative fintech startups, including neobanks and payment banks, who are yet again disrupting the customer expectations about banking products and services.

Once again, the customers will decide if the present incumbents end up ceding ground to the next generation of disruptive banking providers. And this presents a big question to the incumbents; do they really understand their customers as well as they believe they do? After all, the incumbents will necessarily have to embrace the methodologies of their innovative startup competitors if they are to plug the exodus of customers as well as revenues.

To be sure, India’s banking customer of 2020 is remarkably different from her counterpart of just a decade ago. A striking socio-economic transformation of India over the recent years is today characterized by the near ubiquity of smartphones; one in three Indians owns one; nationwide availability of cheap 4G connectivity and an ever-growing adoption of e-commerce and other digital transactions. Banks too have seen the dramatic shift in transactions from the physical channels – branches and ATMs – to digital, enabled by NEFT and IMPS first and increasingly UPI of late.

The ongoing pandemic has further ensured that a whole new segment of customers have had their first taste of all-digital banking, allowing them to even open a new account remotely from their smartphone. This continuous interplay of customers and technology with both transforming each other is simultaneously creating new challenges and opening new opportunities for the incumbent banks.

Redesigning Customer-centric banking

To defend successfully against their innovative startup competitors and to secure their future revenues and growth, the incumbent banks must start with putting their customers in front and centre of their innovation and transformation strategies. At the foundational level, they ought to reimagine how they can extend their value proposition beyond core offerings – the utility banking services.

In my view, the banking leaders of the future will be those who can offer and deliver a whole new level of customer engagement that is at par with or exceeding their most innovative competitors. To do so, they will need to deliver truly hyper-personalized services with enhanced transparency to their customers.

This radical transformation into customer-centricity can only happen if banks rethink their core technology, foster strong partner networks and understand the true meaning of digital transformation, all the while placing empathy and agility at the heart of their strategy to humanize the banking experience.

Transforming customer’s experience – the key to success

The incumbent banks already have an unbeatable asset in the reams of customer data available with them. This data holds the key to understanding a rapidly changing customer behaviour. An important task for the banks is to break open their organizational silos in order to gain access to end-to-end customer data, and then use advanced data analytics technologies including Artificial Intelligence and machine learning to understand what the customers want.

These insights must then form the crux of all strategic decisions made by the bank, ranging from pricing, offers, products, bundling, and even marketing outreach, engagement, and even further digital transformation of crucial touchpoints and processes. By carefully curating products and services into hyper personalized bundles, incumbent banks can ensure a rich customer experience across touchpoints that rivals their more nimble counterparts.

As a case in point, banks can model how their services are used by their customers across multiple activities and transactions – from online and offline shopping or ordering food via apps to buying health insurance – and consider expanding the scope of their services to cover these non-core transactions.

Their focus must be on building and leveraging a comprehensive ecosystem around the customer to maximize the impact of personalization. To do this they must consider strategic partnerships with other players in the customer’s ecosystem. Such value driven offers and personalized outreach will go a long way in delivering the immeasurable wow factor that today’s banking customers are looking for.

A natural progression of this comprehensive customer ecosystem is that of platform banking. This is a digital marketplace or ecosystem created and managed by the bank in association with key partners to provide comprehensive services that go beyond just banking. For example, after approving a car loan, a bank can also help customers find the right insurance plan, car servicing providers and even recommend offers and discounts at car accessories retailers –all within the app.

While platform banking is still in a nascent stage the world over and even more so in India, early efforts have demonstrated high levels of customer interest in such a holistic ecosystem. Within India, many fintech startups are already looking at opportunities to sell their technology platforms as a service directly to large- and mid-sized corporates. Incumbent banks too can tap into this trend through open banking and API-enabled innovations.

For older banks, executing their customer-centric strategies through holistic transformation of core technology may seem daunting, especially given the concerns around security, compliance, and continuity. But the right technology partner can implement a middle layer on top of their core infrastructure and enable them to build new products and services on top.

With help from a suitable partner, these banks can effectively leverage customer data to not only offer hyper personalized services and products but also work on offering a seamless digital experience across the banking ecosystem.

Nonetheless, a complete customer-centric transformation of an incumbent bank’s systems, processes and people is complex and can be both time and cost intensive. However, in an environment where digitally-native fintech startups and tech giants are already offering such an experience, this is one investment that banks must prioritize.

Customers are increasingly demanding an empowering, easy, and seamless experience from all service providers and are not hesitant to switch providers if their expectations are not met. In a market scenario characterized by increasing competition, customer retention and loyalty will ultimately determine the banking leaders of tomorrow.

This article was originally published in Express Computer, Read More

“The views or opinions expressed in this article are those of the author. They do not purport to reflect the opinions or views of SunTec’’.