Will Outsourcers be Driving Growth in Finance in 2018?
Bhupender Singh, CEO of Intelenet Global Services, explores the developments in automation and other technologies for financial services. This year, the pressure is on for banks to keep up with the latest innovations in technology. The Second Payment Services Directive (PSD2), requires banks to have systems to share their customer data with competitors in place, […]
Bhupender Singh, CEO of Intelenet Global Services, explores the developments in automation and other technologies for financial services.
This year, the pressure is on for banks to keep up with the latest innovations in technology. The Second Payment Services Directive (PSD2), requires banks to have systems to share their customer data with competitors in place, and allow third party players to process payments. This comes as part of a wider Open Banking Initiative, to open up the financial services market to competition from innovative challengers and Fintech players.
The General Data Protection Regulation (GDPR) will also require huge technological preparedness as companies put in place new data management programmes to wipe customer data on request and detect data hacks within 72 hours.
So far this has proved difficult. Saturday 13th of January was the original deadline for UK banks to become compliant with PSD2. But five of the UK’s major banks do not have the correct technology in place to be ready in time, and have had to secure an extension from the Competition and Markets Authority (CMA).
And there is pressure coming from competitors, as well as regulators. New challenger banks and Fintechs have been growing in popularity and drawing away customers from traditional banks, service by service, through personalisation and agility.
PSD2 will only increase this challenge, allowing these challengers access to customer data, drawing tech giants such as Amazon and Facebook into play, and facilitating the aggregation of financial data on comparison sites. This will give customers a clear view of where they can get quicker service or make savings with other providers, so traditional banks will be looking to harness the latest technology to keep their services agile, user-friendly and inexpensive.
In response to this, many banks are investing in updating their processes to match the agility and tech capability of their challengers – but they are often hindered in doing this by clunky legacy systems, struggling to patch new technology onto existing infrastructure.
To solve this issue, financial providers are increasingly turning to the help of business process outsourcers. Shifting away from a cost-cutting mentality, BPOs are now driving innovation throughout the finance industry. In fact, the market for outsourcing in Banking and Financial Services is estimated to grow at a rate of 6.79 per cent annually until 2020, when it is forecast to be worth $4.9bn.
Outsourcers are leading the way by bringing innovation into banking processes to drive technology adoption. On a macro level, by migrating data to the cloud and using automation to create a connected financial data ecosystem, outsourcers can help generate a holistic overview of areas of performance. This makes data management simpler, so that GDPR compliance is easier. It also allows for more informed decision-making. Personnel can see the whole picture and draw further insight on decisions. This means that additional tools such as predictive analytics can drive businesses to focus on their growth and financial success.
As financial services providers face increasing competition from the agile service of challenger banks and Fintechs, the pressure is on to speed up and improve service. Automation allows traditional banks to compete on a granular level by improving the quality of each service. One example is the developments in mortgage approvals. Once requiring complicated systems of referral and human judgement, this administrative process can be thoroughly automated, linked up with the relevant data to radically reduce waiting time for the customer. With the help of an outsourcer, one leading UK bank was able to cut down approval times from 11 days to a matter of 48 hours.
New competitors have also been attracting traditional banks’ customers by offering an increasingly personalised service. But using outsourcers, banks can optimise the reach of their in-person service – an advantage against new, smaller challengers. Many are making use of voice-recognition software that recognises a specific customer, matching this to their personal data and, using AI programmes that make conclusions about the likely subject of their call, automatically forwards calls to the best place. This reduces the friction customers face when being passed manually between departments and points of contact.
As this reduces the need for a human operative to redirect calls, this instead enables staff to refocus their energies on more sophisticated customer service requests, managing relationships with consumers to promote business growth in an interpersonal way, to keep up with new competition.
Driven by outsourcers, automation tools are allowing finance teams to cut down the time taken to process complex transactions and administrative tasks. By streamlining front-end and back-end processes with these kinds of programmes, outsourcers are helping traditional banks and finance teams not only to save money, but to radically drive innovation, to compete for customers, comply with regulation, and offer an increasingly rapid and modern offering to their customers.