Banking is not what it used to be. Once considered one of the most stable pillars of the economy, banking today is rife with disruption, competition and most importantly, changing customer expectations. With the emergence of new digital technologies, customers have become used to on-demand availability of services, hyper-personalized offerings, and relevant, ongoing engagement from providers. Naturally they expect the same from their financial institutions, but these traditional enterprises are often not able to meet their expectations. Fintechs, neobanks and technology giants are increasingly filling this void with their innovative, personalized, value-driven services and customers are not afraid of trying them. 22 percent1 of American customers intended to switch banks in 2020 and fintech adoption amongst SMEs has already surged to 25 percent2 and could go up to as much as 65 percent over the next few years. The writing is on the wall – banks must transform the way they strategize, operate, and engage to ensure lasting customer loyalty, grow their revenues, and retain their leadership position in the future.
Transformation Now, a Critical Business Requirement
Evidently, banks must accelerate their transformation journeys to grow their business in a complex and competitive market. But this transformation is not about technology alone. The process must start with an in-depth understanding of what customers want and how they can deliver it. Moving to a customer-centric, value-driven strategy and operating model is the only way forward for financial institutions. They must be able to move quickly and realign their business processes to suit customer requirements. Unfortunately, legacy banking platforms are not scalable or agile enough to deliver the on-demand, hyper-personalized banking experience that is required today. Of course, partnering with fintechs is an option that many banks are choosing, but it is vital to transform their own platforms and infrastructure. A sound way of doing this is by working with third party vendors who can implement a middle layer to sit over their legacy platform that is agile and scalable enough to help them adopt customer-centric strategies.
Working Collaboratively with Partners
When choosing third party vendors to work with, banks must remember that the process of transformation is a collaborative one. Banks need to work with partners who can lockstep with them to help realign processes and systems with a robust product infrastructure. And banks themselves must be willing to adjust or change their processes and systems to meet evolving client expectations. A comprehensive cloud-native, micro-services-based platform can help banks implement relationship-based, customer focused strategies. For example, a leading South African bank wanted to transform their pricing and billing functions to meet emerging customer demand for hyper-personalized, relationship-based offerings. This marked a significant acceleration in their digital transformation program, but in a fast-growing economy, it was a critical step for the bank to meet changing customer demands. They implemented SunTec’s cloud powered middle layer solution that helped them revamp critical processes. These included the accrual process that was used for finance tracking and was more accurate than conventional reporting. It helped automate consent-based debiting processes that was a regulatory requirement and digitized pricing letters that provided detailed pricing computation and transparency for the customers. The solution deployed by the bank also facilitated group pricing capabilities with tier-based pricing models.
Customer-centric transformation is no longer a good to have initiative for banks. It is crucial for protecting and growing revenues in a market characterized by unprecedented disruption. As more banks pick up the pace on their transformation efforts, they must ensure a razor-sharp focus on fully revamping existing platforms, processes, and systems to be customer-centric. An agile technology partner that is committed to helping them achieve their goals can be an invaluable asset. Together, they can usher in a new era of banking that is based on relationships and value.