January 18, 2022
Driven by emerging technologies, the rapid adoption of digital has empowered customers who expect seamless digital interfaces even when it comes to their finances. From a provider perspective, we have the traditional financial services firms on one side and FinTech’s, also known as neo-Banks, on the other.
Each is struggling in its way to acquire customers and retain them. To remain relevant in today’s increasingly digitised world, both are focused on consumer empowerment via multi-options services, a variety of products, and are creating a revolutionised hyperconnected value chain, a platform to provide niche and specialised product offerings.
At one point in time, they were at loggerheads with each other, vying to win customers. However, over a period, there has been a paradigm shift to collaborate and pursue newer opportunities. Transaction monitoring, business payment initiation, income verification, multi-banking payments, digital identity, and digital client onboarding are some of the business processes that have undergone cutting-edge NextGen makeover due to this.
Customer Experience Reimagined
Traditional financial services firms have been early adopters of technology. With every change in customer behaviour and expectations, they have implemented add-ons to their service portfolio by adding to their IT landscape.
Today, they have monolith IT landscapes that are not scalable and need a drastic makeover to make them nimble and agile. FinTechs, on the other hand, built their business, keeping technology at the core. They have significantly moved customer experiences by creating products and services at short time frames, ultimately making what was “good to have” turn into “must-have.”
Thanks to the diverse innovation approach shaping the consumer/producer marketplace, centered around different change levers, we now have more industry templates on “what good should be.” How quickly can these financial service providers adopt and develop newer products to determine who gets to stay in the long haul? Some approaches that can be adopted include:
Reshaping the Future, Digitally
From a technology standpoint, the following broad is leading to a permanent change
Given these developments, financial services firms, especially the traditional ones, need to innovate at a scale, which will help them ‘innovate beyond banking”. Next phase of innovation will continue to operate around these three scales, and possibly one feeding into other, spawning the assessment cycle again on “what good should be.”
Customer Preferences Will Be a Reality Tomorrow
There is tremendous pressure on traditional financial services firms to innovate at scale to retain and capture the customer wallet share. On the one hand, while they can do it all alone, on the other, they can forge partnerships with FinTechs to help scale the technology gap. Thanks to technology, one thing is sure that customer preferences, which are aspirational today, will be a reality tomorrow.
The author, Anand Chandra, is the Global Head Banking, Financial Services & Insurance Presales & EU/APAC Growth Leader at Accolite Digital
The article has been originally published in The Tech Panda.