Digital banking platforms will help banks to deploy technology quicker and more cost effectively, helping them better compete with challenger banks, according to a new blog post from Nucoro.
It’s no lie to say that challenger banks are very popular. In the UK alone, there are a number of major players in the industry, including the FinTech unicorns Revolut and Monzo. They are popular as they are offering consumers simplified and easy ways to engage with their finances.
Nucoro also claims their success is down to the fact they are run more like a tech company than banks, meaning they are designed for scale, efficiency, agility and have a lower cost of operating.
In its blog post Nucoro said, “Incumbent banks are well aware that technology deployment and digital transformation with a customer focus are key to successfully retaining market share. Large banks spend billions on IT each year, with an average of 5% of total revenues being ploughed into the digital transformation race.
“The issue is that the progress made doesn’t equate to the spend. The 1 trillion USD that traditional retail and commercial banks have invested globally over the past three years to transform their IT operations has not yet delivered the anticipated revenue growth and only half the global banks in Accenture’s 2019 report are making significant advancements in digital transformation.”
This is largely down to the fact it’s hard to see where the money gets wasted. An anonymous CFO of a global bank once told Oliver Wyman in a report, “I know 50% of my digital transformation spend is wasted — I just don’t know which 50%.” The report went on to state that very few banks had a clear plan for digital transformation and many were sceptical on the success it would bring.
Nucoro offers a variety of products which a business of any size can integrate with their existing infrastructure to improve their digital offerings and customer experiences.
The WealthTech company believes that banks will need to leverage technology to become leaner, more efficient and more integrated. The way to achieve this is through banking platforms, which enable them to do it quicker and cost effectively.
A digital investment platform will also enable the bank to conduct internal optimisation across a number of areas. These tools digitise and automate business processes, operations and workflows, helping to boost efficiency and lowers costs. Nucoro claims that when AI are used effectively, they can reduce workflows by 30% to 40%.
Furthermore, digital banking platforms also enable the integration of channels, linking them via a central hub to provide a consistent customer experience. Through this, customer data can be unified, extracted from various product and business unit silos and collated to offer a 360 degree view of a customer.
Nucoro added, “Another major advantage offered by digital banking platforms is cost reduction. When banks shift from owning and updating their own systems to using cloud-native SaaS, the cost structure changes from Capex to Opex. There are no large upfront investments on infrastructure, pricing is flexible, costs are more predictable through fixed subscription, and there is additionally no risk of technology becoming obsolete and having to be replaced.”
Finally, digital banking platforms can help get new products and services out quicker as they integrate with existing systems, rather than needing the whole thing to be changed and reworked.
To read the full blog click here.
This is the just latest in a number of blogs from Nucoro. The WealthTech recently explored how solving customers’ problems online can offer a more personalised experience with banking providers, which will help them attract and retain more customers.
Nucoro was named in this year’s WealthTech100, a list of the most innovative WealthTech companies wealth and asset management players need to know about in 2020.
Speaking to FinTech Global, Nucoro COO Nikolai Hack explained how there is little room in the market for standalone investment management services. The real digital investing opportunity is by empowering banks, insurance companies and other established players to provide these services themselves and leverage their existing client-base.
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