Mobile has been the key driver for innovation in the digital space, and banks have long since moved from the "mobile-also" to "mobile-first" strategy. While this strategy has helped banks to transform for their digital journey, nowadays with the rapidly evolving capabilities of mobile phones, technology has proved to be somewhat of a moving target to keep up with.
Results tagged “banking innovation”
Has the milk-ordering-refrigerator symbolism of the Internet of Things distracted other businesses from seeing its true significance? As an example, consider the banking industry, which hasn't paid much attention to the IoT so far. A leading analyst's prediction that about half of all sensors installed by 2020 could be relevant to financial services, should make them sit up and take notice.
In the past year the banking industry has been buzzing with the benefits that blockchain technology offers and progressive banks took a step further to implement blockchain pilots to test out these benefits. 2017 is going to be the year when blockchain will move out of its pilot phase, and into production. This is going to be the year when blockchain will be mainstream, and the giants of the financial services industry have already indicated that blockchain is here to stay.
Blockchain has been a topic of discussion ever since its inception in 2009 as the underlying technology for Bitcoin. The industry has seen intense debate and deliberation on the potential of blockchain, with many claiming, that it is as foundational, as the internet. Some banks state that they have moved past deliberation stage on blockchain, and are starting proof of concepts around this technology.
On their journey towards a truly digital transformation, many banks stumble upon the barrier of outdated banking architecture. As Tom Groenfeldt, contributor to Forbes, says, "When 40-year old legacy banking systems meet the two-month old iPhone 6, the results aren't pretty." Banks are now looking for ways to bypass this barrier to keep up with the latest crop competitors and offer contextual customer experiences.
Banking as we know it will cease to exist in 2017, and regulators and governments have recognized the need for open banking initiatives in the current environment. The Indian Government recently launched the United Payments Interface (UPI), and the European Union passed the PSD 2 regulation to promote open banking. With open banking initiatives and regulations coming into play in the global arena, it is a clear sign for banks to change their traditional mindset and collaborate to innovate.
In the past few years there has been rapid evolution and adoption of digital technology that is disrupting established banking business. But digitization has also thrown open significant number of opportunities for banks to deliver sophisticated customer experience, smarter decisions and operational excellence. We believe that banks need to implement a bold and comprehensive "Truly Digital" transformation strategy to succeed in 2017; and we have identified six technology trends that banks need to address in 2017 to be #TrulyDigital:
- Unleashing innovation with open APIs and open banking
- Banking in cloud-first strategy
- Blockchain: The race to production begins
- AI - your sci-fi movie imagination is turning into a reality
- More things to bank on
- Banking Architecture - driving value with simplicity
The Infosys Finacle - Efma report on retail banking mentions that 53% of the banks feel that pervasive automation will be one of the key drivers for digital transformation in the coming year. While this makes a good case on behalf of automation, the foremost question on everyone's mind at the moment is, how are technologies like automation along with artificial intelligence, will impact the workforce.
Artificial intelligence (AI) is going to become the competitive advantage for banks in the future. In fact, a majority of banks feel that AI is going to have a significant impact in the coming year as a disruptive technology. Progressive banks are getting on board the AI train, and now intelligent digital assistants are omnipresent in banking - from payments, to money management, and financial advice as well. While progressive and challenger banks are already off the starting block, it is expected that their traditional counterparts will soon follow suit.
There is distribution, decentralization and disintermediation of assets brought on by digitization in today's world. This is the brave new world of the sharing economy, and businesses are partnering with other service providers to bring value to consumers in a scalable and flexible manner. When banking becomes truly digital, it will resemble the business models of today's successful platform businesses like Alibaba, Uber, etc. There is no other industry that is as pervasive as the financial services sector when it comes to consumers; hence this makes a solid case for having a banking service option embedded in all applications.
Customer experience has been the talking point whenever trends forecast for any industry come up. The fate of any banking institution largely depends on the quality of customer experience it provides and the year 2017 is no different. In the Infosys Finacle - Efma report on emerging banking business models, more than 70% banks mentioned that creating a customer centric organization and enhancing channels to give an omnichannel digital experience were top priorities in the coming year. However, it seems that banks are falling short on this objective; in a recent survey of about 700 millennials, 75% said that they were dissatisfied with their banking experience.
Data science has been evolving ever since it has come into the picture for businesses and the year 2017 is no different. This evolution is driven by the sheer volume of data being generated and affordable computing power along with maturing algorithms. Business analytics is borrowing analytical advances from pure science and is making strides in generating actionable outcomes.
One of the biggest challenges that banks face today in their digital transformation is the absence of right people, culture, and organizational structure. Hence, to complete a truly digital transformation one of the key priorities for banks in 2017 will be finding the right set of people, and empowering them to carry forward with the transformation strategy.
Banking is evolving continuously, and this pace will only be faster than ever in 2017. We, at Infosys Finacle believe that there are six strategic trends that will reshape banking in the coming year. Only banks that proactively disrupt themselves to manage these trends will be successful in their journey from digital to #TrulyDigital. Listed below are our top picks for strategic trends that will transform banking in 2017:
- Customer experience will make winners and laggards
- Economics of the business ecosystem will come into play
- Moving a step closer toward autonomous banking
- Security will be more pervasive, adaptive, and integral
- You must bank on insights - every time, everywhere
- Empower your employees for digital transformation
Businesses across various and diverse industries have seen rapid disruption in the past few years. One of the major drivers for this disruption is the consumer and how they are coming to expect a Frictionless approach. Some have called it the Uber effect. No cash is needed, it is on demand and simple to use. That experience is what customers are now expecting when interacting in the Ecommerce world. Many traditional corporates are playing catch-up and some like Sears, JC Penny's, American Eagle, Sports Authority and Barnes & Noble cannot pivot fast enough, leaving them in a position of reporting negative growth or closing all together. Players like Amazon are disrupting their business models by leveraging the latest in technology and rolling out customer centric digital offerings. These offerings appealed to the digitally savvy customers and those companies have grown rapidly over the past few years.
Banking will never be the same, with distributed ledger technology. The industry is changing very rapidly. Banks are dealing with the most sophisticated customers in history, whose basic demands include speed, convenience, and personalization. The banking sector is facing unprecedented levels of regulation in the wake of the financial crisis, with regulators demanding greater transparency in banking operations. Economic uncertainty and slowing growth around the world are straining the core business, forcing banks to look at shoring up non-interest income. Last but not least, new, non-banking players are rewriting the banking landscape with their innovative, often disruptive, business models.
Digital disruption is paving the way for newer, more agile banking models and India is becoming the poster child for banks all over the world. Between the innovations in mobile and social banking, and progressive regulations, India has managed to leapfrog the legacy systems and processes that burden most banks in the world. One of the most recent technology led revolutions in the banking front in India, was the launch of Unified Payments Interface (UPI), by the National Payments Corporation of India (NPCI). The UPI has the promise to be a game changer in the era of cashless payments. Imagine a scenario where you don't have to jump through all the hoops to make a payment, and just need a unique ID, similar to an email ID, to make a payment. Imagine a cashless transaction, that doesn't require you to type out your credit or debit card details.
Blockchain technology underlying the 'Bitcoin' crypto currency has created lot of buzz in the technology landscape compared to any other technology in the past. Perhaps, blockchain is considered to be the biggest disruption post 'internet'.
Every month your bank reminds you that your credit card payment is due. But on the rare occasion that you forget to pay, I really doubt anyone bothers to check with you once more before slapping that late fee. Isn't that strange considering your bank knows you intimately - your bank balance, creditworthiness, the fact that you always pay on time - and therefore knows with reasonable certainty that this is a one-off slip up? Shouldn't the bank have at least shown you the courtesy of a call?
A bank that truly worked for the wellbeing of its customers certainly would have. This is what separates the better bank from the rest of the field. Unfortunately most banks do not live up to their promise of customer-centricity, or to their customers' expectations. That leaves the door wide open for non-banking players, such as Fintech companies, to take a quick share of the market by offering products, services, solutions and experiences that really work in their customers' favor.
Some of you might have heard of Blockchain. You might have read that it could disrupt and change banking, payments and other financial services forever. Perhaps you are wondering how it might affect you, especially if you are employed in the financial services industry.
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