Singapore has awarded the country’s first set of digital bank licences. This is another milestone in the transformation of the banking, financial services, and insurance (BFSI) sector and a prominent indication that the industry’s future lies in digital.
While the shift to digital started years ago, COVID-19 dramatically accelerated the transition as financial institutions adapt to the closure of physical branches and the reduction of physical transactions in the contactless economy. 44% of the top 250 banks in the Asia Pacific are already shifting their focus to expediting their digital transformation.
Whether it is an upcoming digital bank, incumbent bank or other financial services provider, their future survival and success will lie in their digital capabilities and services. By focusing their digital transformation strategy on (1) customer experience, (2) collaboration and (3) network, cloud, and mobility transformation. BSFI organisations can build a strong foundation for innovation, new business models and additional revenue streams in the future.
Here are the key recommendations that CIOs and technology decision makers should consider when planning their long-term digital transformation strategy:
Customer experience – Differentiating your organisation with omni-channel digital experience
The emergence of new digital banks, together with the expansion of services among fintech and other service providers, has surged the competition in this sector. With the pandemic accelerating front-end digitisation, BFSI organisations are leveraging digital customer experiences as one of the visible and critical differentiators to distinguish themselves from the other players.
Customers today expect BFSI organisations to provide financial services with omni-channel experiences, supported by always-on customer service representatives. These platforms should also be augmented by intuitive self-serve support options, chatbots and other automation technologies to facilitate fast, seamless transactions, such as integrated payment and personalised on-boarding processes. Quick resolution of customer queries will be key to ensure the digital customer experience is not undermined. This is the fundamental level of customer experience that all BSFI organisations should strive to achieve.
We will also see an increased demand for ultra-rich media, such as having a video chat with a BFSI representative. Coupled with solutions such as speech recognition and AI-powered virtual assistants, financial institutions have the opportunity to turn every transaction into superior experiences.
Collaboration – Empowering employees to better serve customers
The year 2020 pushed BFSI organisations to dramatically transform their operations to adjust to remote working, and a significant portion of the workforce in most leading banks is expected to continue working remotely in the post-pandemic world. For instance, a top international bank recently announced its plans to provide hybrid work options to more than 90% of its employees. A leading local bank in Singapore is also looking to make flexible work arrangements a permanent initiative for its staff.
To aid this transition successfully and increase work efficiency, organisations will need to have a unified, collaborative platform to work seamlessly across functions and geographies. Furthermore, to enable their workforce to continue to deliver exceptional customer services and stay collaborative, they must provide the infrastructure to support remote access to enterprise applications.
However, accessing sensitive information over the public internet can introduce new dimensions of cyber risks. Organisations need to ensure their employees have secure and seamless remote access to applications and data through measures such as zero-trust connectivity, managed authentication, and privileged identity management.
BFSI organisations should also explore integrating customer relationship management (CRM) applications into the remote working platforms to give customer service agents insights and access to a customer’s data and history so they can assess creditworthiness, offer relevant products, and understand changing customer requirements, real-time. This will enable them to up-sell and cross-sell different products and services to meet customers’ needs.
Network, cloud, and mobility transformation – developing secure and agile architecture to support future innovation
Building omni-channel customer engagement platforms and integrating diverse collaboration tools can create complexity and put tremendous pressure on organisations to transform their network. To be truly digital-first, organisations need an agile, cloud-centric, software-defined network that is simple to manage, stable-by-design and can securely support the global and ubiquitous access and distribution of data.
With a cloud-optimised infrastructure, banks can create common, connected data sets and enable deeper, more sophisticated insights and analytics to derive personalised experience. It can also drive the closer integration of business units through greater data sharing and enhance collaboration through shared platforms. This will increase the speed of decisions and enable organisations to harness the power of data to solve customer problems or identify unmet needs.
Moreover, an agile network with modular plug and play architecture enables banks to respond faster to market shifts while building more resilient operations. It also provides BFSI organisations with the foundation to drive future innovation and create new customer experiences and business value through technologies such as the internet of things (IoT), augmented reality (AR) and virtual reality (VR).
To come out as a winner in the increasingly saturated BFSI space, organisations need to continue to transform their operating models and embrace digital as the core for their business. Their ability to deliver exceptional customer experience as well as innovate new forms of value and services through seamless collaboration over a secure and scalable network will not only enable organisations to differentiate themselves, but also embed themselves as an enabler of their customers’ digital transactions and activities in this burgeoning digital economy.