Finance Monthly - September 2022

39 Finance Monthly. Bank i ng & F i nanc i a l Se r v i ce s How can banks focus on innovating and continuing to improve and develop the digital customer experience, while catering for all customers? There is no denying the dramatic shift in consumer behaviour to digital. This should be taken as an opportunity for banks to futureproof their services and improve the online customer experience. However, the extensive use of legacy technology within banks, means the speed at which these established institutions can bring new services to life is often too slow and outdated. This challenge is also complicated by a lack of industry standards, meaning that banks continue to be restrictedby having to choose partners based on their language and the way they’re able to transform the bank. To truly digitise banks, they need to overcome these obstacles surrounding interoperability with a coreless banking model. This approach to transformation empowers banks to select the software vendors needed to obtain the best-of-breed for each application area without worrying about interoperability and being constrained to those service providers that operate within their own technical language or messaging model. By translating each proprietary message into one standard message model, communication between different organisations is, therefore, significantly enhanced, ensuring that each solution can seamlessly connect and exchange data. Are there additional approaches that banks should be considering to further enhance the customer experience? In addition to taking a coreless approach to banking, banks must form an ecosystem alongside FinTechs, service providers, and aggregators. This will help banks when it comes to the speed they can introduce new products, which in turn will support the customer experience. An effective ecosystem strategy will make banks more relevant to their customers, creating an opportunity to drive better relationships and bigger wallet shares by providing the speed, scale and differentiated products that make the most of the opportunity presented by the significant shift to digital banking. If banks fail to take this approach, they will struggle to survive as consumers continue to demand new, digital services aligned to their needs. So, what can banks do to prepare for the future and make sure they are providing for all customers? While we anticipate that there will continue to be more high-street branch closures, the industry must continue to adapt based on the needs of every single customer. Failing to do so only means that customers will leave for a nimbler competitor who understands the customers both now and in the future. This may seem like a hard weight to bear for many across the sector. By taking a core banking approach to transformation, however, supported by an effective ecosystem – banks will benefit immensely. If banks continue to focus on the balance between maintaining previous methods of banking and the development of new and innovative services based on the needs of every customer, the future will be bright. “In addition to taking a coreless approach to banking, banks must form an ecosystem alongside FinTechs, service providers, and aggregators.”

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