Heading into 2017, banks are facing significant changes including increased regulations, the need to modernise their legacy systems and growing cyber threats. Digital is no longer ‘another channel’ – it’s essential to success and to secure the next generation of banking customers.
But while each bank has its own digital journey, executing at the right speed, with the right governance model and mind-set can be a fast track to success.
So what are the challenges that need to be addressed to achieve digital success?
Today software risk is one of the major sources of profit loss and security exposure for banks. Despite the new regulations, the legislators have failed to address technology risk and system-level risk is the most poorly understood at the software layer. Banks perhaps need to start collaborating more and educating the regulators on how to modernise the regulatory framework so that they can support a lot more of the digital interactions.
As banks continue to transform the software assets to meet market demand, they will introduce new risks into their organisation. Challenger banks and digital specialists with alternative banking products are entering the banking space. Banks with 100% of digital DNA such as Hello Bank! in France, Simple and Moven in the US, Holvi in Finland and Rocketbank in Russia have the advantage of offering a customer experience naturally according to the new digital model.
32 percent of bank revenues are at risk from new digital business models. To stay ahead of the game , banks need to reinvent the value proposition which also requires rethinking services and products, redesigning internal processes to improve efficiency while incorporating digital logic and integrating the different interaction channels are integrated entity. Besides, digitalisation also requires a change in the culture of the organisation and its employees, as well as creating new structures and sometimes even reinventing the business model.
The debate remains as to whether consumers will consider ‘being a bank’ necessary to trust a person’s transcations. eg. Does Amazon have a trusted enough brand to play the key banking role? The battle to gain brand positioning has intensified, as the creation of superbrands has become a core component in an organization’s digital strategy.
With client expectations high, banks’ CIOs face huge challenges to modernise and upgrade legacy systems. No matter what, operational and technology risks remain high priorities for banking executives. In addition, as more customers use their mobile phones and tablets to do their banking transactions, and omni-channel is growing significantly within the financial services, the mobile experience is becoming a key aspect of the digital strategy that banks must address, to ensure ultimate user experience.
Cloud readiness and Legacy Modernisation are key enablers in terms of meeting cost targets and facilitating improvements in user experience. We have created a Cloud Assessment using industry –proven metrics to ensure stability for key characteristics like structural robustness and efficiency, security, architectural compliance and transformational potential.
Visit Validata Group’s website to get solutions in banking right away.