Results tagged “trends in banking”

Technology Trends Reshaping Banking in 2017

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
You can read in detail about the top trends reshaping banking here.

Moving a Step Closer towards Autonomous Banking

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.

AI - Your Sci-fi Movie Imagination is Turning into a Reality

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.

Economics of the Business Ecosystem will come into Play

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 will make Winners and Laggards

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.

You must Bank on Insights - Every time, Everywhere

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.

Banking in Cloud-First Strategy

Cloud first strategy is no longer a pipe dream, but a reality. Banks are still coming around to the idea that with the digital disruption of business models, the new open ecosystem will be banking on the cloud. Cloud will be the biggest driver for technologies that are currently changing the face of business - - blockchain, artificial intelligence (AI), open APIs, server - less computing, IoT etc. Progressive banks will move beyond non-mission-critical systems on cloud to supporting production workloads on the cloud.

Trends Reshaping Banking in 2017

From a bank's perspective, the glass is both half empty and half full as we head into a new year. The financial services industry continues to experience unprecedented change. One set of factors is purely environmental - sluggish global macroeconomic growth that shows no signs of picking up, rising regulatory capital and operating costs, depressed interest rate environments in developed markets, large non-performing assets in developing economies, and devalued currencies in several pockets, to name a few. This is putting further strain on the banking business, which is already bogged down by a marked slowdown in growth and profitability. 

Defining Digital

An effective digital strategy can boost profitability by 40 % or erode it as rapidly as 35% in the next 5 years - if you don't get it right, says one study. Another says digitization is at top the agenda at retail banks, ahead of all else. There is universal agreement that the future of banking, indeed every business, is digital. Most banks you speak to are cognizant of the need to digitize, and fast; a number of them have already got a plan going.

Open Banking

Last year the European Union Council passed the revised Payment Services Directive (PSD2) that mandates the opening up of banks' payment APIs. The National Payments Corporation of India has introduced unified payments interface APIs, wherein anyone can initiate a payment transaction and create unique payments experiences.

Insights drive all aspects of banking

The Fintech revolution is threatening to completely disrupt conventional banking models. But for most Fintech startups, access to consumer data is still a huge challenge. In contrast, the incumbents have a wealth of transactional and behavioral data at their disposal. In the digital paradigm, the flow of data will only increase as each bank accumulates terabytes of data from a variety of external data sources.

Automation in the Truly Digital Bank

The banking back-end is no stranger to automation. However, in a digital banking model, automation will play a more prominent role both in terms of scale and sophistication.

Bank in an Ecosystem

Creating the world's largest transportation company without owning cars or the world's largest hospitality company without owning a single property - digital technologies have not merely transformed entire industries, they have managed to upturn many established business models and mindsets.

The customer isn't one

Identical individuality is a pre-digital concept. Digital customers expect their banks to recognize their individual identity, their contextual needs and create personalized solutions that are relevant to their unique financial life stage. Customers want financial partners, rather than financial service providers, who will help them achieve their financial goals and aspirations. And so forth.

Partnerships are the Future of Banking

Mobility is no longer a concept whose potential can be defined merely by enumerating handsets shipped, connections created, apps launched or data consumed. It is a phenomenon that is estimated to have generated a total economic value of almost US$ 10 trillion last year, which makes it the third largest economy in the world after the U.S. and China. I should also probably mention the 11 million jobs that it was directly responsible for creating around the globe.

Where Products and Services Get More Innovative

Innovation has become the leitmotif of the global retail banking industry. Changing trends in consumer expectations, competitive dynamics and new technologies are compelling banks everywhere to focus on innovating on everything, from products and processes to channels and business models.

Modernization without the mayhem

On the one side there is the legacy; a complex patchwork of disparate technologies integrated at random, upgraded incrementally and rooted in an era when product-centric silos were avant-garde. On the other is the new paradigm of banking under unrelenting pressure from customers, regulators and competitors.

Finding value in simplicity

Every year strategic branding agency Seigel+Gale compiles a Global Brand Simplicity Index, across 25 industries, to generate separate brand and industry simplicity scores. In 2012, retail banking came in at #15 on an industry simplicity listing headed by online retail and closed by health insurance. This year, that ranking has slipped to 19th. And some of the industries that beat out retail banking? Shipping/mail and automotive!

Coping with compliance

Banking's systemic complexity is often cited as one of the principal causes of the 2008 financial crisis. But the tidal wave of regulation set off by that event is, ironically, secreting a new layer of complexity on the business. Apart from adding complexity, emerging regulatory norms will considerably inflate the cost of compliance for banks. For instance, US multinational JPMorgan Chase now expects compliance costs to touch US$2 billion in 2014, almost doubling its previous projections.

From big hype to big value

According to a 2013 analyst report, the banking sector ranked second, behind media & communications, in terms of Big Data investments. The report estimated that 34% of banks were already invested, while an additional 24% expected to do so in the near term. 

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