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The majority of retail and commercial banks have set digitalisation as a priority alongside deriving deep data insights using sophisticated analytics to better target and service their consumers.
Covid-19 has exposed operational shortcomings and highlighted the continuing reliance on paper-based, manual processes and 'swivel-chair? integrations. Astonishingly, many institutions do not have adequate digital cross-channel capabilities. The risks are many: operational, market, reputational and not least, security.
In late 2019 as part of its Cloud Banking Innovation report, Finastra surveyed 200 banks and asked them to identify their key challenges. The responses were:
The fact that customer acquisition/retention came up as the highest priority reflects that established banks had perhaps not moved fast enough or invested enough to get the digital customer experience right. The impact of Covid-19 only exacerbated matters and we are seeing a rising wave of banks looking to transform. These banks are using On Premise legacy systems that have scarce resources. They are difficult, complex, costly to manage and have had operational gaps exposed by remote working due to the pandemic.
Because incumbents rely on legacy infrastructure, new products can take months to launch to market. This inevitably means that these institutions often miss the commercial opportunity; their ?market moment? has evaporated because it has taken too long to deliver. With cloud-based digital solutions, lead times can be reduced to days or even hours and banks are starting to recognise that and see the benefits.
In our opinion, most banks want some or all of the following:
Given the recent events - more than 15 months of a pandemic and a backdrop of latent transformation - now could be a good time for banks to evaluate what this has meant for them and for firms to assess how their priorities have changed and continue to change and where they should now be focusing their energy and direction.
We will discuss all of these questions and explore further in our forthcoming joint webinar with UK Finance, Banking technologies: changing priorities for challenging times? on Wednesday 30 June 2021 at 10am BST. You can register for your free place here.
Mary Connor, Director - Retail Banking Strategic Engagements, Finastra