When banks turn to new technologies, there are undoubtedly always going to be growing pains. Despite this, the adoption of technology is a top priority for this group.
WealthTech firm Kidbrooke recently highlighted findings from a PwC study that identified six key challenges for banks when adopting technologies. What were they?
The first challenge centered around developing a customer-centric business model. On this matter, Kidbrooke suggested that a simple app with a balance sheet simulator and an economic scenario generator would be user-friendly for customers as well as being seamless for a bank to integrate it into its existing technology ecosystem.
This falls seamlessly in with the second challenge – optimising distribution – with Kidbrooke stating that the join-up of these two features allows banks to collect valuable customer data that can be used to develop new products.
On the topic of distribution, Kidbrooke said, “Acquiring new customers or retaining existing customers can be achieved with lifecycle marketing, by communicating to people according to where they are in the stage of their lives. Offering a simple tool to customers is one way to entice them to use a banking platform; the data collected can be analysed with predictive analytics to indicate what products might be appropriate for their risk and reward profiles.”
The company cited that in the PwC study, bank executives were concerned about the decline of people visiting branches as well as the substitution of online for physical interactions.
The third challenge needed to be dealt with by banks is to simplify their business and operating model. Kidbrooke suggested that this alongside obtaining an information advantage would be ‘on most COOs and CIOs strategic agenda’. The firm added, “Most banks are committed to adopting the cloud, with varying degrees of success. Cloud migration and digital transformation projects often get stalled due to complexity, cost and moving the goalposts.”
Kidbrooke then asked; how can bank executives who are committed to change actually gets things done? On this question, the business said that instead of managing a large-scale migration project, the better way to proceed may be to implement a safe, scalable plug-and-play addition of a cloud-native API.
Securing an information advantage is also key. In this area, Kidbrooke stresses using an API reduces time-to-market while introducing a comprehensive way of modelling different use cases for financial decision support.
As most successful business leaders know and understand, innovation is the fuel of any big company. Kidbrooke suggested that banks will have to move beyond the proof-of-concept stage to fully embrace data analytics and AI. It added, “The challenge is to combine building capabilities with buying them. Supporting innovation involves funding R&D in a bank and can involve partnerships with other companies. Investing in new technology that enables better customer interfaces and understanding of customer needs is important.”
The last challenge underlined by Kidbrooke is proactively managing risk, regulations and capital.
The firm remarked, “Selecting a trusted partner with a stateless operating system, in which all data is kept at the customer, is advisable. Being confident that a technology partner can pass muster with your Vendor Risk Management, Legal, Compliance and Audit teams will put their minds at ease during the procurement-to-contract process. “
Read the full post here.
