The global banking sector has undergone some major upheavals just as we started settling into the year. Three mid-sized US banks have collapsed while one of the world’s leading investment banks has been taken over by a competitor. Not since the financial crisis of 2008 has the financial sector seen such uncertainty.
These incidents are not the only ones that have affected the global economy – the conflict in Europe, a potential global recession, and rising inflation and interest rates have added to the turmoil. Financial institutions must look beyond conventional approaches and standard business models to weather this storm. As the competition intensifies and provides consumers with more choices than ever when it comes to financial services, organisations can differentiate themselves from the rest of the pack through customer experience.
Hyper-personalisation for the digital consumer
By offering personalised services, financial services firms can drive growth and provide more value to their customers and stakeholders. They can use real-time data processing and analytics to establish a 360-degree view of their customers or use machine learning to gain deeper insights into their customers. Data will also allow financial services firms to have a single, consistent view of the customer.
In an era where consumers are spending more time on digital services, being able to offer a seamless, consistent experience across all channels that caters to all customers is crucial. This consistent experience can be extended to banks’ universal banking apps, which can also be used to offer personalised financial products or even bancassurance to users. Enterprises that use hyper-personalisation to improve the customer experience will build stronger customer relationships and brand loyalty while encouraging growth.
Building resilience through automation
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Automation can help organisations become more resilient, especially during times of uncertainty. Automating certain work processes allows employees to spend more time on higher-value tasks and reduce the time spent on mundane tasks. Through automation, financial organisations can focus on innovation by shifting more of their budget from business as usual tasks.
Financial service organisations can drive even more effective automation for faster and more efficient operations by employing the cloud. One of India’s leading private sector banks, RBL Bank, moved its Finacle core banking workloads onto a cloud-native architecture. The upgraded digital banking platform included a modernised private cloud architecture with highly scalable features. By automating certain banking processes, the bank reduced the time spent on customer onboarding, improved the efficiency of its electronic transactions and lowered operational costs.
Driving financial inclusion through digital solutions
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Banks and other financial services institutions are not only expected to meet society’s financial needs but have to cater to financial inclusion.
Doing so might even help uncover new areas of opportunity through innovation, as in the case of BTPN Syariah, Indonesia’s 12th Sharia Commercial Bank. The only bank in Indonesia that focuses on financial inclusion and serving productive underprivileged families, BTPN Syariah specifically designs its facilities and infrastructures to be different from conventional banking, to ensure effective and efficient products and services for the under-banked.
By utilising a modern and agile platform, the bank can now develop and deploy applications and digital solutions rapidly in an automated and secure manner. The speed of BTPN Syariah’s app development has increased by 70%, letting it roll out services faster and deliver better banking experiences. Using an open-source container approach, BTPN Syariah’s digital solutions have increased customer satisfaction by 25%.
Achieving customer-centric success and operational resilience with an open approach
Faced with an unpredictable economic climate, financial institutions need to leverage artificial intelligence and machine learning, automation, 5G and other technologies to stay ahead of the curve. Deploying automation and offering hyper-personalisation to customers can provide an edge to enterprises in a highly competitive landscape.
Adopting an open approach increases an organisation’s agility, letting it respond quickly to changing market conditions. By moving from a centralised, hierarchical structure to an agile model across the entire organisation, companies can set up cross-functional, self-managing teams that can respond quickly to changes in the landscape. This change in structure also requires a shift in organisational culture that is supported by the organisation’s leadership.
Making use of open-source will also let organisations lean on the collective talent of open-source communities to generate innovative solutions and ideas while ensuring that the underlying code is reviewed by a large community. Large communities working on open-source solutions ensure that these solutions are reliable and secure, with troubleshooting done quickly to resolve any issues. Organisations need to tap into the power of open-source and work with vendors to produce better software solutions that are more stable, secure, and innovative.
Arvind Swami is the director for Financial Services at Red Hat Apac
