By Niall Twomey, CTO at Fenergo
How do financial institutions stay competitive in the COVID-impacted marketplace? In today’s climate, financial institutions must switch to digital or risk becoming obsolete. As a result of the pandemic, recent research revealed that consumers use of mobile and online banking has dramatically increased with 30 per cent more people using their mobile apps and 35 per cent using online banking. It’s imperative during these trying times that financial institutions digitise in order to accommodate the needs of the marketplace, otherwise they risk losing customers – or worse, going out of business.
Before COVID-19, many financial institutions were putting aside digital transformation projects for a variety of reasons. For example, financial services have been slow to adopt cloud technology owing to a perceived lack of data security and control. Historically, building and maintaining in-house systems was considered the safest way of protecting business-critical sensitive data and applications. However, many of the key concerns associated with cloud adoption such as security and privacy have been addressed, and banks are now beginning to enjoy the advantages of cloud-based services. In the regulatory space, more and more banks are now forced to rapidly embrace the deployment of their regulatory applications on the cloud – in order to drive scalability, lower capital costs, ease of operations and resilience. It’s all about driving efficiencies by adopting technologies, to help give financial institutions a competitive advantage.
In order to be able to better serve their clients in the current climate, financial firms need to improve efficiency, drive better digital client experiences and focus on better value-added tasks by embracing innovative and highly automated technologies that can help ensure the optimal client experiences. In our connected age, clients expect and demand a faster, more efficient account opening process that lets them re-use the information they’ve already submitted and avoid repeated requests to the customer. Often, poor data management is where financial institutions become stuck. The inability to automate the consumption of customer information really hampers financial institutions’ abilities to expedite compliance and onboarding. Financial institutions of any size, and within any sector, need to recognise that introducing technology-enabled client onboarding solutions will give them the best possible chance of meeting the continuing regulatory challenges head-on.
Firms must prepare for the future and consider what the next 6-12 months will look like. They must contemplate how to best respond when relationship managers can’t physically reach out to potential customers. When face-to-face meetings are no longer possible, a digital-first strategy and the ability for clients to provide documents remotely via online portals is crucial. With increased automation, the middle and back-office no longer need to deal with repetitive, manual processes such as scanning documentation. Advanced technologies and capabilities such as natural language processing (NLP), machine learning (ML) and optical character recognition (OCR) allow firms to extract the required information and text from scanned documents which can then be cross-referenced against other data sources internally and externally.
The pandemic has accelerated consumers’ move toward online financial services. Today, customers are looking for remote services including online banking and mobile apps, however, it’s just a matter of time before the demand for more advanced services becomes the standard. For this reason, banks need to fast-track their digital transformation or risk being outpaced by digital-first competitors.