IBSi Blogs

Banks and financial institutions have been hesitant to adopt public cloud technology due to a fear of losing control. What are the psychological barriers facing financial services executives and how may they be overcome?

By Neil Vernon, CTO, Gresham Technologies

Accelerated by the global pandemic, the financial services industry is undergoing a period of intense technological transformation. The impact of Covid-19 is putting incumbent banks and financial institutions under cost, profitability, and operational stresses; regulatory requirements are growing in volume and complexity; and legacy systems are increasingly putting businesses at risk of service failure, loss events, and reputational damage.

In this environment, there’s no doubt that the future of financial services is in the cloud.

Its potential to deliver greater agility, cost effectiveness, efficiency, scalability, and speed to market provides new opportunities for growth and innovation. What’s more, a cloud-first approach offers firms the ability to better control their data and remain connected, freeing up highly stretched resources to focus on other business objectives. Migrating to the public cloud can play a critical role in strengthening operational resilience, too. In the face of increasingly high customer standards and, in the UK, new rules from the FCA coming into effect from March 2022, IT and system failures will simply not be tolerated in future.

So why are we still seeing a hesitancy towards cloud adoption among senior financial services executives?

Outsourcing functionality, not control

For the most part, it is the fear of losing control. Regulatory changes are increasing the pressure to meet a greater number of more complex requirements. In line with that, the risk of more severe non-compliance and the consequences that follow are also increasing. Exacerbating this problem is a pandemic-induced move towards working-from-home or hybrid environments, leaving outdated legacy systems unable to cope with the agility this demands.

Ultimately, the data that banks and financial services firms handle is very sensitive, either regarding customers’ financial information or traders’ operations. If compromised, this could present significant financial and reputational risk. Capital One Bank’s 2019 data breach, for example, which affected 106 million people across the U.S. and Canada, resulted in an $80 million fine. And the reputational consequences were tangible: in the days following the breach, Capital One’s stock plummeted from over $100 to $85 – both a consequence and catalyst of the reputational damage that the bank suffered.

All of this means that data control is more important than ever. But the truth is that moving to the cloud does not mean sacrificing control.

It is critical for business leaders to understand that leaving processes on legacy systems increasingly exposes you to loss and failure events, and that outsourcing your data and processes to third-party cloud providers is actually a more secure alternative. It can significantly increase efficiency and reduce costs by simplifying processes, as well as reducing the risk of non-compliance while simultaneously avoiding expensive in-house IT projects, both in terms of time and money.

Gaining insight through connectivity

In fact, moving to the cloud can put you in more control by facilitating a holistic view of your relationships as your business grows.

Connecting to an ever-changing array of trading partners, venues, clients, and regulators – and ensuring these connections remain valid – is a dynamic process. What’s more, firms must manage, map, and maintain the widely diverse and constantly changing data formats that flow between these parties.

Navigating this complex data landscape can cost millions every year in internal resources or point solutions that become stale. Moving this process to the cloud can give you the scalability your business needs to grow its network with speed and ease.

Work with the cloud, not against it

Despite a reluctance to overhaul existing processes and the temptation to bend cloud software to fit your own objectives, executives must understand that, in order to harness the power of the cloud, you must work with it – not against it.

A flexible approach, whereby firms understand that successful cloud migration might require some upfront work, is key. Integrating cloud with non-cloud, or different cloud services with each other, is often complex. A rigid attitude will likely result in disappointing results and data migration complexities, costing time and money better spent servicing clients.

Part of this flexibility is understanding best practice around how to use the cloud. The Bank of England (BofE) has warned that additional policy measures may be required to mitigate financial stability risks from the growing concentration of power in the hands of global cloud providers, such as Amazon, Google, and Microsoft. In response, firms should be looking at the ways in which cloud service providers are different and playing to those strengths to diversify their cloud portfolio.

It’s vital that firms have the right partner to help them navigate the application of their cloud technology across the major providers with relative ease, flexibility, and portability. What’s more, in addition to new BofE policy, big providers could be dictating cloud terms and conditions to major financial firms in future. Understanding and reporting on these requirements will cost valuable time, money, and resources that are much better outsourced to cloud-native technology experts.

Ultimately, a fear of losing control shouldn’t act as a barrier for cloud adoption. Once properly understood, the power of the cloud and its potential impact on business performance cannot be overstated, offering unparalleled benefits that, in an era where data control, integrity, and connectivity rule, could make or break financial institutions across the globe.

Customer-centricity and financial inclusion remain a challenge for the financial services sector. With banking products offered to customers becoming increasingly commoditized, AI-powered analytics can help banks differentiate themselves, provide competitive edge and enable personalised customer experience. The coming of age of such technologies allows banks to develop a strategic and organizational focus in analytics and adopt it as a true business discipline.

by Krish Narayanaswami, President & Global Head – Banking at Azentio Software

The analytics and business intelligence (BI) software market grew by 10.4% to $24.8bn in 2019. The world of banking has encountered unprecedented change over the past few years, and trends show that this will be the norm for a while longer. Modern BI platforms continue to be the fastest-growing segment at 17.9%, followed by data science platforms with a 17.5% growth (Source: Gartner).

Banks have been an early adopter of BI and analytics to drive business growth, reduce risk and optimise cost. With the rapid growth in digital banking, the velocity of transaction data has increased multifold. This data has now unlocked tremendous opportunities for banks in understanding consumer behaviour and tailor make specialised offerings by leveraging analytics as Decision as a Service

How will changes in banking laws and regulations affect profitability? Which stress scenarios should be considered? Who are the current ‘high-value’ customers? Which customers have the highest potential to ensure revenue growth? Can the bank create an early warning system to prevent fraud by identifying patterns? Increasingly, data analytics is seen as the answer that banking leaders are looking to, to successfully navigate this volatile environment.

Present Day Strategy and Key Drivers

According to a recent Deloitte survey, frontrunners benefited from early recognition of the importance of analytics to the overall business success. This recognition has helped them shape a specific analytics implementation plan that considers holistic AI adoption across the enterprise. The survey indicates that many frontrunners launched analytics centres of excellence and established comprehensive, companywide strategies for AI adoption for their internal departments, recognizing the strategic importance of AI.

The following strategies should be taken into consideration while adopting an analytics framework across the organization.

Prioritize the focus areas

Identify key areas where data and analytics can have the greatest impact and obtain leadership engagement from the start (for example, customer, risk, finance). This must reflect in the immediate goals and vision of financial institutions.

Streamline your data

Provide an integrated view of high-quality data vs. siloed pockets across product and business lines (for example, single view of the customer, aggregated risk exposure by product). Setting up a data warehouse/data lake and further creating specialized data marts to make the data more structured and easily accessible to the respective stakeholders.

Integrate with decision management systems

The key is to develop data-driven strategies at every step to arrive at smart decisions. Analytical insights can be plugged directly into decision management systems to arrive at the next best action.

Onboarding the right skillsets

Finding the right talent for statistical modelling little data and big data is one of the biggest challenges. Develop a talent plan that builds on both existing internal talent and external sources.

Leverage the power of cloud

Leading cloud providers like AWS, Azure, OCI and GCP are providing powerful analytical offerings as services and have the power to run heavy compute. The ability to scale up infrastructure to run high loads and to bring it down when not required helps in optimising costs.

What is the way forward?

According to a 2020 McKinsey study involving over 25 use cases, AI technologies can help boost revenues through increased personalization of services to customers (and employees); lower costs through efficiencies generated by higher automation, reduce errors rates and improve resource utilization. It can uncover new and previously unrealized opportunities based on an improved ability to process and generate insights from vast troves of data.

The potential value creation for banks is one of the largest across industries, as AI can potentially unlock approximately $1 trillion of incremental value for them annually.

Realising the need for going mainstream with AI, banks internationally have already started harnessing the power of data to derive utility across various spheres of their functioning, including sentiment analysis, product cross-selling, regulatory compliances management, reputational risk management, and financial crime management.

AI and analytics will eventually become a part of every major initiative, in areas ranging from customers and risk, to finance, workforce, and supply chain.

Personalised experiences and products powered by advanced analytics and machine learning will be key to wooing customers in this era of intense competition. Banks have a chance to overcome the hurdles and join the analytics arms race before the frontrunners extend the gap that would be too far to bridge.

Increased FX [foreign exchange] volatility and greater complexity in managing cashflow forecasting, is changing the way UK businesses are hedging.

by Richard Eaddy, CEO, Hedgebook

For a start, companies have moved from being hands-off to hands-on in managing their forecasts and FX hedging.  It is seen as a concern across the business, impacting sales, procurement, and the supply chain.  While the C-Suite are aware of the impact, it is often the board that is driving change in wanting to see a far more proactive approach in managing these risks.

The increased volatility in financial markets, is matched by increased uncertainty in business. Once stable supply chains now operate on much shakier terms if they haven’t disappeared altogether.  It means there is no longer certainty around when you will be making a payment or how long you will need to hedge.

Businesses working on low margins can be significantly impacted. A cancelled order or significant swing in foreign exchange that has not been hedged, leaves the business dangerously exposed. All of this has meant UK companies are looking more regularly at their hedging positions and reviewing the risk.

Many businesses are acting responsibly and adding FX Management to their library of risk management policies.  This gives the treasury team some real guidance as to the risk tolerance the business is prepared to work within.  The ability to model FX hedging options against this policy enables faster and better decisions to be made – with minimised risk.

Remote working also removed the expectation of a monthly or quarterly meeting where such matters were generally discussed.  The traditional round-the-table closed door reviews essentially disappeared during lockdown.

Very quickly, companies realised the need to proactively review their FX hedging positions and that players across the company needed to part of that.  Over 80% of surveyed customers using our FX tools now engage with them at least once a month, with 10% checking in on a daily basis.

Working remotely has also seen companies move away from spreadsheets being the default tool for managing FX hedging.  This is largely due to the increased risk around version control and data security when shared across multiple screens and locations.

But it also highlighted the spreadsheet owner as a potential single point of failure in the organisation. In many cases they were the only ones who could successfully run the formulas and manage the complex hedging situations the business was facing.   As a result, companies have proactively started looking for online tools capable of managing this for them.

They want to view data in real time, have secure access to their hedging positions and for everyone involved to be working off a single version of the truth.   Companies now say using online FX hedging reports and modelling saves them half to a full day per month – but the exponential value is in greater accuracy and faster, better decisions.

It is these companies that are driving change.  They expect their banker to be able be onboard with managing foreign exchange hedging online.  They want their broker to see the same information they are and be able to guide them through the options – modelling the different rates and hedging percentages as they go.

Even though cloud technology has driven the access cost right down, online treasury management is new technology for banks to become familiar with. Perennial slow adopters, banks are now realising they need to get onboard fast, or their customers will leave them behind – quite literally.

It really should be a win-win for everyone.  Customers limit their FX risk and banks become even more valuable and responsive to their customers.   It enables much better FX hedging decisions to be made faster and strengthens the bank’s relationship with its customers.  A definite change for the better.

Financial inclusion: How digital lending can help

IBS Intelligence is partnering with Sopra Banking Software to promote the Sopra Banking Summit, which takes place 18-22 October 2021. The summit is tackling the biggest issues in the financial sector. This weeklong festival of FinTech will touch on the hottest topics in financial services and highlight the new paths industry leaders are taking.

The following article was originally published here.

Financial inclusion – its efficacy, implication and urgency – is becoming one of our industry’s biggest talking points. And this is a good thing. The more light that’s shed on the issue, the more likely we are as a collective to push its agenda.

by Nelly Kambiwa, Financial Inclusion Director MEA, Sopra Banking Software

However, there are still question marks over what exactly financial inclusion means. For some, it’s tied intrinsically to demographics; for others, it’s about politics. Most interpretations are not wrong, and almost all are well meaning, but perhaps the clearest and most succinct definition comes from the World Bank:

“Financial inclusion means that individuals and businesses have access to useful and affordable  financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.”

Without this ‘access to useful and affordable financial products and services,’ people may not have a secure place to store money, no effective and free means of receiving payment, and no safe, reliable way to make payments.

And while great strides have been made around financial inclusion, there’s still a long way to go. According to the most recent Findex data, there are still close to 1.7 billion adults in the world without access to basic financial services

Financial inclusion in Africa

Of course, financial inclusion is not a challenge limited to a particular country, region or continent; rather, it affects areas all over the world. However, for the purposes of this article, we’re going to look at financial inclusion in Africa, and how digital lending can help to improve the financial lives of millions of Africans.

According to Global Finance, 50% of the African population is unbanked, equating to 350 million people. This is already a problem that needs addressing, but with the African population rising quickly – it’s set to double over the next 30 years, adding an additional 1 billion people – it could quickly go from bad to worse.

The role of digital in expanding access

Extending access to borrowers who are otherwise unlikely to receive it is key to improving the health of a society. Among all financial services, access to credit is perhaps the most important as it’s a force multiplier. To this end, innovative digital strategies and new technologies are enabling lenders to reach traditionally underserved people while securing their own interests.

Indeed, the use of big data, artificial intelligence, machine learning and open banking-enabled solutions is expanding the scope of what’s possible. Thanks to new products and soaring internet penetration rates, geographical limitations are being overcome. More sophisticated data analysis tools have come online and are enabling easier credit decisions in lieu of traditional credit scores.

This is particularly relevant to lending in Africa, where access to physical branches is an issue for many people. A recent white paper published by Sopra Banking explained how the rise in mobile money users in Africa is an opportunity and challenge that many incumbent financial institutions have yet to rise to.

Thankfully, that is changing, and many lenders are coming up with solutions that will allow them to provide digital loans to their customers in a safe and effective way for all parties. With the introduction of video KYC and account aggregators, lenders can easily access permissioned customer data and conduct better due diligence. And the digitization of the entire loan application lifecycle means that borrowers can apply for loans remotely—a benefit both in terms of reducing friction and expanding reach.

New-to-credit (NTC) customers

Historically, credit institutions have been cautious with NTC consumers, due to the lack of credit history to assess their probability of default. However, given technological advances, lenders can now more confidently lend to NTC borrowers. They can do this by leveraging some of the solutions mentioned above, solutions that afford new ways of analysing data, predicting a customer’s creditworthiness and gauging the risk involved in lending.

Analysing mobile and web data makes it possible to offer credit to individuals and SMEs without financial footprints. Over the past decade, this practice has emerged and really caught on in Africa, where FinTechs, microfinance institutions and traditional financial institutions like NCBA Group, Equity Bank and Orange Bank use SMS data to inform credit decisions.

While alternative credit scoring systems show great promise, they also bring up privacy and data reliability concerns. And in at least one case, have led to a large group of digital borrowers taking on unsustainable levels of debt.

Open banking as a catalyst

On the regulatory side, open banking is also driving improvement in lending processes. With access to more data (including non-financial data), lenders can do enhanced credit scoring and risk assessment. This provides additional insight, allowing lenders to assess a borrower’s eligibility more accurately. This not only drives down costs for the lender, but it improves the customer experience and, because it’s digital, it works in places without existing infrastructure.

For those most likely to be denied credit, the sub-prime loan application process can still be paper-heavy, involving the manual submission of payslips or statements. Furthermore, Covid-19 has underscored just how inefficient traditional loan processes are.

As an antidote, open banking is pushing financial inclusion solutions that make it easier to verify customer details in real-time—in some cases, going as far as automating the entire interaction. This makes the process easier for the user and significantly increases the chances of applications being accepted.

The good news is that African banks are taking notice of open banking and starting to take huge strides in furthering its implementation. For instance, in 2020, the Central Bank of Kenya – a country where 44% of the population is unbanked – included open banking as one of its main strategic objectives; and last year at the height of the pandemic, Nigerian startup Okra announced that it had received significant funding to develop an open banking infrastructure.

Such developments are becoming increasingly common throughout Africa and bode well for the future of financial inclusion across the continent.

Looking ahead

Digital lending is redefining the dynamics of the credit market in Africa. With a lower cost base and improved reach, financial institutions – including banks, MFIs, neobanks and Telcos – can simply do more with less. Digital lending cuts the cost of offering services and streamlines onboarding. It also enables instantaneous and remote approval and supports data-driven mechanisms to initiate repayment. At the same time, open banking facilitates greater access to data than ever before and unlocks new use cases.

Ultimately, expanding access to credit requires careful planning and is more of a journey than a destination. The use of alternative credit scoring is still in its infancy, and open banking is only a few years old. At its best, digital credit can be responsible, inclusive and affordable. And it’s something every financial institution should strive for, as it not only helps individuals and communities, but it drives economic growth, too.

Cloud is one area of innovation that holds huge potential for the financial sector and that can offer significant cost savings if used effectively.

By Tom Schröder, Director International Partners and Strategic Alliances, Serviceware

According to McKinsey’s Consumer Pulse Survey, digital engagement levels among European customers have increased by 20% since the beginning of the pandemic. However, despite the need to innovate, many financial organisations are yet to fully recover from the full impacts of Covid-19. Whilst vaccine roll-out has signalled fresh hope for some, recovery will be by no means immediate. With further economic turbulence on the horizon, it is crucial that financial services businesses leverage strategic cost measures to not only mitigate the impact of short-term pandemic fallout, but most importantly recover and succeed in the long-term.

Balancing cost and innovation

Many financial institutions already use cloud-based software for business processes such as customer relationship management, HR and financial accounting. However, the opportunity for cloud within core activities such as consumer payments, credit scoring, statements and billing is endless. In fact, from 2016 to 2018, Deloitte Global saw a threefold increase in the number of financial organisations adopting cloud to promote innovation.

Cloud-based services can reduce internal costs and optimise business growth by offering a much more scalable and reliable IT infrastructure that is specifically designed to streamline performance and support development and expansion. Cloud technology gives financial institutions the opportunity to continuously refine and improve services, according to changing customer demand and business need, whilst enabling them to assess how much is being used versus how much is being spent. For many organisations, cloud also provides the opportunity to achieve better value for money, as businesses only pay for what is being used.

With cloud now being seen as the digital backbone of many financial businesses, cloud solutions will continue to evolve. However, with this change will come increasing complexities – both in terms of the services available and also the variety of operating models. It is therefore essential that financial institutions have the right tools to continually monitor and analyse cloud spend (on average, 23% of IT expenses), in real-time, and with accuracy. Those who do will effectively pave the way towards growth.

Managing legacy spend

In today’s current economic landscape, optimising budgets is an absolute necessity. However, traditional ways of managing IT spend are simply not working. This is where maintaining a complete view across the whole organisation is required. The ability to manage cloud costs will be unlocked by reliable financial management tools, which can empower the financial industry to truly understand and evaluate cloud spend. By gathering real-time operational, project and vendor cost data, financial institutions will be well-equipped to make fact-based decisions to drive down costs – both now and in the future. From our experience, we’ve seen our clients easily shrink their running costs by 5% and reallocate these resources to more appealing and business-driving growth initiatives.

In light of these changes, financial companies must now take advantage of the tools that will enable them to evaluate the implementation and operational costs of technology to help stabilise business – including cloud, on-premise and even shadow IT. Whilst in theory, all software and IT assets within a business should fall under one centralised IT department, providing the CIO with ultimate visibility, the reality is often very different. Shadow IT, incurred in part by bring-your-own-device increase and the explosion of remote working, has seen a rapid rise and Gartner predicts it now accounts for 30-40% of IT spend in large organisations. As such, this is causing an ongoing headache for the people that are in charge of technology, security, and compliance, who need transparency across all applications to ensure cost transparency against value, not to mention security.

As we look to the year ahead, and competition within the industry continues to rise, it is vital that financial institutions free up budget to invest in digital programmes and secure growth. To achieve this, it is imperative to gain total transparency over business costs. This will be essential for companies to not only stay afloat, but also build for a successful future.

For many businesses, an integrated, high-performance and, above all, flexible solution is needed to create a holistic overview of business spend, on which decisions (about cost, process, operations and more) can be based. If that means an initial investment to analyse the value of legacy systems vs cloud-based solutions, then it’s a cost easily justified. Put simply, financial institutions that maintain an end-to-end view across their entire IT portfolio will be able to take back control of their running costs and streamline their budgets towards future growth – this year and beyond.

Digital-first pressure for banks is well and truly on. Leading financial institutions know they must lead in both customer experience and operations en route to a digital-first future, while also recognising these as areas of strength for digital-native challengers and FinTechs.

by David Murphy, Head of Financial Services EMEA & APAC, Publicis Sapient

Today, almost everything is digital. The way we shop, interact, how we bank. A global pandemic made digital capabilities mission-critical, enabling banks to continue efficiently serving their customers remotely. And for the most part, this has been achieved with a great deal of success. However, before the pandemic, many banks were sceptical about their ability to pivot so quickly to a digital-first approach. They knew they needed to, but the ‘How?’ proved difficult as they were bogged down by legacy technology and cultural debt.

Banks have been aware of their digital-first future for quite some time, but many have simply struggled to get there, stalling at the first hurdle and giving away valuable market share to a wave of digital natives that are more agile, innovative, and free from the weight of traditional restraints; adapting and pivoting as required. So far, the market has been theirs for the taking, inspired by the likes of Amazon, Netflix and Airbnb which have disrupted entire industry sectors with their digital-first platform approach. They have successfully leveraged technology to create a superior customer value, offering slick and frictionless experiences that have appealed to a new generation of financial customers.

Recent research by Publicis Sapient showed that 83% of  banks already have a clearly articulated digital transformation strategy in place, but the pandemic acted as a catalyst to act faster. According to the study, 81% of banks say the pandemic has made improving their digital skills and capabilities more urgent, and 70% say it highlighted weaknesses in their customer experience. Covid-19 has only served to reinforce the gaps in legacy banks’ customer experience and operational transformation. Banks are accelerating to compete with digital-first challengers like Monzo, Revolut, Chime and Nubank, while developing partnerships with FinTechs that can accelerate the provision of new customer propositions. Personetics, a firm that uses data and AI to enable banks to provide personalised insights to their customers is a great example.

Incumbent banks are however, far from complacent. Most say they must do more to keep up with these nimble, digital competitors while appealing to a new breed of digital-native customers. Leaders from the Global Banking Benchmark Study ranked digital-first challengers, FinTechs and consumer tech companies among the top five influencers of their own digital transformation strategy. “FinTech is the future,” as JPMorgan’s CEO, Jamie Dimon, wrote in a memo to shareholders ahead of the bank’s earnings numbers release.

Put simply, banks need to stop aspiring and start acting to counter the new competition ‘head on’ by transforming their technology, investing in appropriately skilled talent needed to make this technology work for them, and emulating the digital-first mindset and culture of the challengers. Crucially, they must digitalise and become truly customer centric. At the most basic level, they need to provide access to their services online and efficiently to customers entirely via digital channels. Not only basic services such as checking balances and making money transfers, but also more complex transactions such as mortgage lending. In this rapidly evolving environment, banks need to deliver superior customer experiences while being operationally agile enough to drive growth and give themselves a fighting chance to compete, which is not always easy. Look at N26, Starling, and Revolut, who have clearly demonstrated their ability to achieve a high level of digital maturity by creating digital-only propositions at speed while innovating on the product cycle in their area of specialization.

Banks need to optimise all areas of their customer experience and operations – from their business models and technology to their products and services and even their people in order to achieve both revenue growth and cost reductions in a post-pandemic world. This will also enable them to compete in an increasingly complex, digital-first financial services landscape. Banking of yesterday has gone, and to cement themselves for the future banks must innovate with customer experience top of mind.

How can banks learn from FinTechs?

Accelerate into a digital-first future. Know the competitive landscape. Banks need to understand their competition, then invest heavily in digital innovation to keep pace with them as digital-first challengers, FinTechs, and new entrants continue to reshape the financial services outlook.

Transform both people and culture. Leading banks recognise that investing in developing talent and skills to transform culture goes hand-in-hand with technology investments – they are not siloed. Lack of skills can be a key barrier to transformation.

Invest in a partner ecosystem and distribution network(s). Building partnerships will allow banks to scale and pivot at speed to compete with digital-first competitors.

Be agile to move and innovate at speed and scale. Leading banks have already grasped this shift and are now focused on building urgency – 40% of banks believe that agile product development is the key trait for digitally innovative financial services firms.

Move to a cloud-based model. Cloud is central to banks’ digital transformation strategies, whether for core modernisation, enabling personalisation or real-time payments. However, banks need to look beyond infrastructure and cost efficiency. Opportunities for customer innovation and cloud-enabled services must be seized. That said, adaptation will take time as sentiments steadily rise, 29% of bank leaders say cloud investment will be central to their digital transformation plans over the next 3 years.

Banks are aware of the impact that these new challengers and market entrants are having on the pace and priorities of their own digital transformation. In turn, flexibility is becoming increasingly important for digital competitiveness in the market. Banks need to prioritise investment in agile capabilities which will allow them to accelerate the rollout of new customer features and innovations.

While banks should not necessarily flock to follow the internal structures of digital competitors, it is crucial that they realise what has made them so successful: customer obsession. They have an established customer-led culture; a 360-view of customer data; they deliver omnichannel servicing and offer personalised experiences and products, but most importantly, they have a platform-based approach. The types of institutions that will be successful in the next 3-5 years are going to be institutions that integrate different parts of a large ecosystem into a platform experience. Banks must use data to deliver an in-depth understanding of the customer and their wants and needs, and banks must service those needs in a streamlined, seamless, ethical, and engaging way.

By learning from challengers on how to become customer centric, they can invest in and improve on their own CX. This requires investment into digital innovation to keep up. The good news is that it can be done. The pandemic has shown that banks can move incredibly fast when required and support their customers almost entirely digitally with no branch access. Customer needs and demands are constantly in flux. An iterative approach which works constantly to improve, update, and respond to customer desires is essential. This approach will see today’s banks best position themselves for the digital-first future.