Big financial players can no longer bank on their name to keep their customers loyal
Banking, Financial Services and the Insurance sector (BFSI) have experienced tectonic shifts in the recent years, with phenomenal growth in digitization, fusion of technologies, convergence of industries, a proliferation of intertwined ecosystems, and the blurring of product constructs. In addition to these unpredictable disruptions, established financial institutions are also constantly under threat by nimble fintech firms. These players are taking the market by storm with their disruptive products, lower costs, and newer cloud-based technologies, which power their innovative products whilst allowing them to plug in newer features via their chosen cloud-based, API-enabled technology platform as per the changing needs of customers.
Customers are increasingly demanding and better self-aware. They are insistent on personalized, convenient, and flexible approaches to meet all their banking and financial needs. They want everything to be successfully executed quickly, and from the channel of their preferance, ie, mobile banking.
Emerging Winners with Tech
To survive and thrive in these rapidly changing market dynamics, banks need to invest further in their digitization strategies using technologies that are agile, flexible, scalable and upgradeable. As the BFSI sector is moving from the legacy core systems, strategic partnerships with plug-and-play financial features will enable existing financial establishments to phase legacy systems out for smarter cloud-based banking platforms. Collaborative interoperability capabilities and the increasing use of APIs are becoming the gold standard for banking. This will allow these institutions to generate the value that their customers so desire, thus driving an uptick in usage.
Adopting Digital Processes is Necessary to Future-Proof the BFSI Sector
Digital options are the future of banking operations and Digital Process Automation (DPA) allows financial organizations to integrate and adapt business processes in an existing system landscape. This not only enables them to adapt more quickly and flexibly to changing market requirements but also make evidence-based decisions and spotlight the needs of their customers. It combines real-time intelligence with design thinking methodologies, to streamline processes and create better experiences for the business and customers alike.
BFSI industries can utilize these automation technologies to streamline back-office processes and increase efficiency; improve customer service; free-up employees for higher-value projects; improve governance and fraud detection; interpret big data and augment human-like decision making capabilities.
As DPA strategies takes into account the broader spectrums of automation and not just the end-to-end automation of individual tasks, the BFSI sector can simplify and speed up transactions while mitigating clutter.
Accelerating Innovation with Low Code
Low-code development platforms are ideal for applications that need to be built from scratch and require customization. BFSI firms can essentially create customer-centric applications for customer onboarding, mortgage origination, loan origination and management, debit and credit cards, and campaign management. A low code environment bolsters rapid enhancements of features by simplifying the development process and help create flexible banking and insurance applications. Low-code platforms help enterprises maintain their applications at a lower cost while ensuring quality, and accelerated delivery of business applications.
This enables BFSI firms to provide their customers with better user experience as well as integration support for different digital assets including legacy systems and existing enterprise-wide platforms.
AI is Driving Digital Transformation in the BFSI Industry
Artificial Intelligence impacts the back-office, product delivery, customer engagement, marketing, and security. AI and analytics, coupled with their customers’ growing preference for digital banking offer an opportunity for banking technology leaders to deliver personalized experiences and services to customers at scale.
For financial institutions to provide empathetic experiences to its customers, they must translate customer insights into empathetic actions by consolidating data from varied sources onto a real-time, unified platform. Second is the marrying of contact centres with cutting edge digital capabilities such as machine learning, chat, artificial intelligence, etc. Then they must utilize technology such as text analytics and speech analytics, Natural Language Processing (NLP), and voice recognition to garner in-depth insights into a customer’s emotions, irrespective of the touchpoints.
By leveraging empathetic and explainable AI, financial organizations can gauge the emotional state of a customer, and suggest the best actions that can be adopted in real time.
Digital to the core
With data at the epicentre of digital transformations and disruptions across industries, BFSI firms have been at the forefront of digital adoption to enhance efficiency and drive performance. The rapid adoption of digital payments and the use of emerging modern technologies have majorly contributed to the growth of the banking and financial sector in India. With COVID-19 loosening its grip on the economy, customer expectations and needs are evolving at a blinding pace.
Implementing these winning technology strategies to modernize their core platforms will improve efficiency, delivery of service and ultimately, business profitability. With a keen focus on innovation at speed, cost-effectiveness and convenience, BFSI firms need to proactively expand their core capabilities to work smarter in a way that will better equip them for the needs of tomorrow.
(The author is Mr. Deepak Visweswaraiah, Vice President, Platform Engineering, and Site Managing Director, Pega India and the views expressed in this article are his own)
